Private money lender

Okay, yes you are absolutely correct on you need to get a deal done. So, start building your buyers list, get a house, and get that house flipped. Once you have accomplished one deal with your bro. in laws money and he makes money as well, he'll be more than happy (I'm pretty sure) to do it all over again. Have you thought about having him partner up with you? He could provide the financials, you provide all of the leg work, and split the profit 50/50.

Destrie

Sounds good to me.

Great Opportunity! Finding funding seems to be one of the biggest blocks to getting a deal done, and you already have that covered. As someone suggested, if you find a really good deal; he may be interested in future ventures. Go for it!!

if you don't take the 3%. You can't find anyone who will lend at that rate. I give my private lenders the maximum CA usuary law allows... 10%. You need to make sure that your numbers are good, so your brother will lend again. That means after purchasing the house, holding costs and repairs, you shouldn't be borrowing more than 70 to 75% of ARV. I would stay around the 70%. To figure out your holding cost multipy 5% by the ARV of the house. That should cover you. I would tell your brother that if he waits for payment until after you rehab and sell, then you will give him 4%. That means no payments for you until closing. You should be able to buy, rehab and sell within 90 to 120 days. Don't be greedy with your sale. Place it a little below the going rate and be willing to accept 90 to 95% of ARV to get a quick sale! Good luck...

KimmyJ
Press on...

Offer your brother more than what he is paying in interest on his mortgage. Then he might be willing to lend that money long-term for you. You can also use this as proof of funds and maybe to buy w/ cash and then refi several properties. Sign an agreement with him for at LEAST a percent higher than what he would be giving up. Then put it in an interest-bearing account in your name. Lock up great REO deals as cash-buys. Use the account to show POF. Buy or assign these, and you can even offer your brother-in-law points for each sale/transaction. You see how much the HMLS charge for points! (Did you look over Sam's flyer??)
You have so many opportunities with this! And, YES, get a move on and make those deals happen! This will give you that much more confidence in doing it.

Just my thoughts

Rina

Thank you all for the advice. Just to be clear, He is charging me 3%just to have it avail. to me whether I use it or not. Once I borrow it, I am paying 7 percent on the money for as long as I need. So basically I am paying for the opportunity to use his money.

Cathy

Hi Cathy!

I realize you've clarified and said that the 3% is only for the opportunity for the money...but I think this is a GREAT thing...

Maybe things to think about:
--How many deals requiring proof of funds (in the amounts you would need from him) are you offering on every month?
--If that amount is NOT high, do you want it to be higher? Could having to spend $125 a month keep you accountable to your goals in a sense? I mean, setting a goal to make a certain number of offers (which in turn makes your action item list larger), and therefore it would be worth every penny of $125 a month to "have access" to the money knowing with all the offers you are making, you WILL have one accepted where you will use the money fairly quickly....in terms of not paying the 3% for that long, and really paying the 7% for a project which is where you want to be.

As a newbie, I'm not aware of all the opportunities out there and I know you are looking for advice from the more experienced members out there

Because 7% IS SUCH AN AWESOME rate in terms of private money/short term money (not conventional loan obviously), I think Rina is RIGHT ON in terms of even raising it a percentage. The one thing I see as a "private money" deal is that 7% interest is an AWESOME rate!!! There are no "points" so you're not having to pay him on the back end of the deal out of your profits.

Most private money deals I hear about are giving people a 12% return on their money, so if he's doing it with 7%....yes, just get yourself even more motivated to make enough offers to use his "proof of funds" at 3% more often so you can GET TO USE the money at 7% and thank your lucky stars that it isn't 12%!

Hope my ramblings make some sense! And hope it works out for you!!
How awesome!
Cheers!
Louisa