Question for Mr. Garcia - Posted by Ruth A.

Posted by Ruth A. on January 11, 2001 at 20:50:22:

Thank you so much Mr. Garcia for responding to my post with such good advice. Yes, I am a newbie and I’d really appreciate getting a second opinion from you on any deal that I am working on. Hopefully that will be soon.
Best regards!

Question for Mr. Garcia - Posted by Ruth A.

Posted by Ruth A. on January 10, 2001 at 20:18:57:

Dear Mr. Garcia,
I’m a newbie and am interested in doing some rehabs here in S. Fl. Unfortunately, I have a recent Ch.13 bankruptcy (past year). I have a good paying, steady job (I’m working on rebuilding my credit) but have only been able to locate one hard money lender that will not look at credit. He will only loan 50% arv and that has kept me from being able to take advantage of one deal already since the seller would not hold a second and I have no real cash of my own to work with right now. I have an aunt with good credit who would be willing to obtain the financing in her name and partner with me. Her income is not that high and she already owns a condo. Would this be a possibility? How would you suggest I structure such an arrangement? I would handle finding the properties, submiting offers, and working with the contractors.I’ve already incorporated with myself being the only officer.I would use her on a deal by deal as needed basis. I’m hopeful that once I can make some cash I’ll be able to obtain my own financing for future deals with enough down. Any advice would be greatly appreciated! Sorry for the long post.:slight_smile:


Re: Question for Mr. Garcia - Posted by Ed Garcia

Posted by Ed Garcia on January 10, 2001 at 21:26:21:


I’d be curious to see how you view a deal. Hard Money lenders usually go up to 65% APV. Ruth the idea of taking your aunt on as a partner is fine. There are loans available today that are stated income, NIQ, NIV, etc. so her income can be worked with.

Ruth, I want you to be careful not to hurt your aunt. I know that sometimes when we work a deal we think that we structured it so nothing can go wrong. Ruth, I won’t kid you, I know how to structure a deal that’s bullet proof, but most investors are blinded buy potential profit and get lackadaisical and greedy, and miss valuable safety checks when doing a deal.

Your aunt is giving you an opportunity to be a real-estate investor, she is trusting, that you know what you’re doing and counting on you make it all work Ruth, I can tell that you’re new, by the way you’ve asked the questions in this post. I want you to know that if you are uncertain of any of your deals, you can call me, and I will give you a second opinion. For now, your arrangement should be 50/50 split. She’s taking all of the risk, you’ve got nothing to lose.

Ed Garcia