What do you think of this strategy? - Posted by Albert - GA

Posted by Glen B on February 21, 2000 at 07:50:56:

What is the best source of hard money lenders in the upstate NY area (Kingston, Albany)? Primarily rehab and flip deals.

Thanks, Glen

What do you think of this strategy? - Posted by Albert - GA

Posted by Albert - GA on February 20, 2000 at 18:27:54:

I am ready to get started seriously in real estate. We have our home and a rental. My plan is to mortgage out as much as possible and offer cash deals on fixer-uppers and motivated sellers. Then I would make any repairs and sell them or mortage out and have them as rentals. Any comments? Good plan?

Here’s one for ya… - Posted by Ken

Posted by Ken on February 22, 2000 at 20:14:32:

Capital Structuring:
Depending on where you live, your house is appreciating anywhere from 5% to 10% annually. Not quite the same pace that the S&P 500 is moving. What would you think of tapping that equity and putting it in a mutual fund. The equity in your home is working twice as hard for you. Then, find private funding (which is everywhere) and use the revenue generated by the mutual fund to pay the the loan. If everything goes south, since you actually still have the money, just liquidate the fund and pay down the mortgage with the proceeds.
Do the math and see what you think is best.
(P.S. Don’t buy into a risky fund for this purpose thinking you’re going to be the next Bill Gates, look for something with consistent strong performance and ask your CPA for tax advice on how best to set up the accounts.)

Re: What do you think of this strategy? - Posted by Rick W.

Posted by Rick W. on February 21, 2000 at 06:04:00:


Be careful, be VERY CAREFUL about using the equity in your personal residence to invest in RE, (or anything else for that matter). In the event your investment portfolio goes down the toilet, or if the economy follows that same route, you may not be able to keep up with the increased payments on your home. Ask me how I know this??? Battle scars up and down my back!

I agree with Michael about private lenders. They’re the best source of capital on flippers, and your credit isn’t usually an issue. If the deals are financially sound, (which they should be or you shouldn’t do them), finding a private lender to fund the purchase shouldn’t be a problem.

Try This… - Posted by Mike

Posted by Mike on February 20, 2000 at 21:50:23:

Instead of cashing out the equity of your home, try using that equity as a down payment, note, etc. but have a “substitution of Collaterall” clause in there so you can swap it out with a future properties equity, and free up your personal home.

Increased Debt - The two edge sword… - Posted by Michael Morrongiello

Posted by Michael Morrongiello on February 20, 2000 at 20:14:45:

Tapping into ones equity in their properties is one way to raise cash however you are going further into debt.
If you use the funds wisely (which is what it sounds like you will do) and avoid “toys” and strictly use these funds for investment purposes then that is a game plan to consider providing you feel you can comfortably handle the increased debt service.

Taking on Debt can be a double edge sword it can provide you the working capital you might need, but I have seen many individuals fall prey to their plan of repaying this new debt.

Another alternative you might consider rather than tapping into your existing properties is to simply borrow the funds as needed from HARD MONEY type lenders. Lenders that will lend on the “as is” as well as the potential “fixed up” value for the properties you want to acquire. In this way you keep your existing properties in a safe harbor.

Michael Morrongiello

Re: How do you locate these private lenders? - Posted by JeneanNC

Posted by JeneanNC on February 21, 2000 at 14:42:55:

How can I find these private lenders?