If you have been looking for a solid structure in Kansas City to convert to condos or other mixed used buildings, then consider an abandon school. The local paper - The Pitch, recently published a short article about the fact that in Kansas City Missouri, the school district has more square footage of abandon property (418,000 sq ft) than any other property owner, they have named the school district the biggest slum lord. They then published a sales pitch and photo for a bunch of abandon schools. There is some opportunity here for the right developer. And you could help the neighborhood out. Read the full article: http://www.pitch.com/2008-08-14/news/buy-this-school/ How important are your beliefs to what you will achieve with your life? Personally, I think they are a vital part of your foundation for making the decisions that will create the behavior you will act out. The challenge for many is what they call beliefs are actually only opinions.
Understanding the difference between "opinions" and "beliefs" is important. In my working with people I have found when most say this is what I believe, what they are really saying is this is my opinion. What they don't understand is an opinion lacks the foundation to stand on in times of internal turmoil or external challenge.
Challenge most people's opinions and they crumble from the lack of internal commitment. Opinions are information you have gathered, but not run through your internal processing. They are handed you, accepted and given back during conversation. If opinions are challenged, most won't fight for them.
They listen to what is being said and change their mind based on the new information they have gathered. Opinions are not about thinking through; they are simply about accepting what they are told. Because they are not locking into your belief system, they offer very little value to your personal growth journey. Opinions are just opinions.
Beliefs carry a different meaning to your life. Beliefs are information you have been given, processed through your internal processing center and added to your foundations of principles. It is within these foundation principles you build your life. It is the depth of your beliefs that holds your life together; it is the weakening of your beliefs that causes you to lose direction, question the purpose of your life and not be able to stand tall during the storms you will have to weather.
Beliefs can be challenged without the person caving. Each time a belief is challenged it allows you to reaffirm your commitment to life. Each time a belief is challenged it allows you to strengthen your presence by examining why this principle is foundational to your life. Each time a belief is challenged it allows you to rethink your understanding and rekindle your passion for improving your life through strengthening your foundation.
What happens when a life doesn't have a strong foundation of beliefs to stand on? In working with human behavior I have found these to be the most common results.
A life without a solid foundation of beliefs will Break down internally when challenged. I have watched so many lives come apart because their life was handed a curve they weren't prepared for. Because they had no foundation that said, "This is what I believe," they crumbled under the stress. A strong foundation of belief allows you to slow down and see the bigger picture about the situation you are facing.
A life without a solid foundation of beliefs will Excuse their behavior. How many times have you seen someone do something they knew was wrong and justify it with their reasons and excuses? Without a strong foundation of belief anything goes. It is so challenging to talk to this life. Principles take away the ability to justify anything you want to justify. This is one of the real cracks in our country's moral fiber. Because many of our founding father's principles on which our nation was founded have been weakened, we have become a nation where wrong can be justified and accepted as "just a part of life." That has made us a very self-destructive society.
A life without a solid foundation of beliefs will Lack the passion to move forward. Principles are driven by passion. The things you are passionate about you will fight for. When you lack that strong foundation of principle centered living, you will also lack passion. Without passion you will move in whatever direction the predominate wind is blowing at that moment. As much as you may think you are moving forward, that behavior is all about moving in destructive circles.
A life without a solid foundation of beliefs will Increase its negative moments. Negative only exists because people lack beliefs. When you are a life driven by beliefs that create principle centered living, negative cannot attack you. You can look the negative straight in the face and say, "this is what I believe." When you do this, the negative will fall under the strength of beliefs.
A life without a solid foundation of beliefs will Entertain lies as truth. Truth is the result of a strong foundation of personal beliefs. Truth is life centered; truth is beliefs that you hold firm in the midst of any storm. The strength of the storm doesn't matter; the fact is beliefs become your anchor during the winds of uncertainty. When you don't have that foundation of truth to stand on, you tell yourself whatever you need to hear to get you through that moment. That means it becomes okay to lie to yourself if it will get you through that situation. What many fail to realize is you have not gotten through; you have simply avoided and will have to face the situation again.
A life without a solid foundation of beliefs will Fear the unknown. The unknown becomes frightening when you don't have a solid foundation of personal beliefs to stand on. Fearing the unknown is all about not trusting yourself. Not trusting yourself is about not having a solid foundation of beliefs you can stand on when you are about to enter any aspect of life's uncertainty. Uncertainty provides your life with the test of personal confidence. Confidence demands beliefs that create mental and emotional anchors.
A life without a solid foundation of beliefs will Stare at life with questions you can't answer. So many times I have had people say to me, "I just don't know what to do." They have also told me, "I don't trust myself to make the right decision." They have said, "I don't know why I was given this to deal with."
Life is puzzles you are asked to put together each day. Your ability to see the pieces and find their correct place depends on your internal beliefs. Without a strong foundation of personal beliefs the pieces all look the same. Without a strong foundation of personal beliefs you will stare at the puzzle and be totally confused by what you are seeing. The stronger the confusion, the more challenging it becomes to see the puzzle coming together. The stronger the foundation of personal belief the easier it is to identify the points of confusion, move through them and put the puzzle together.
Do you see that beliefs are much more than thoughts? Beliefs are foundations you can build your life on. Beliefs are an important part of your growth process. The stronger your beliefs the easier it is for you to stand tall in the testing moments. Here is why I think Beliefs are essential to any life that wants to live with purpose, fulfillment and a sense of mission:
B Behavior comes from your beliefs.
The essence of all you are and all you will become is and will be formed by your foundation of personal beliefs.
Please visit Richard's web site to sign up for his monthly Mind Jogger Newsletter
"Missouri, with one foreclosure action in 747 households, was ranked 18th. Kansas was 37th, with one foreclosure in 1,784 households. Among metro areas, Kansas City was 85th, at one in 570 households." From article in the Kansas City Star Foreclosures in California, Las Vegas, and Florida are way up, in some cases more than 1 house in 100, but the Kansas City Market is fairly quite well. Houses are still selling, they may be quite slow, but they are selling. And we are not seeing quite so many foreclosures as the highly speculative areas. Here at our office we have been searching for loans. We have two lenders that offer the tradtional rehab loan with 5 - 7 points, higher interest rates, 6 months loans an 10% down. Most want 620 credit or better.
Another rehab lender you might get in touch with who has been around for years is Bernie Rickter who owns North Oak Investments. 816-436-4601, sorry Bernie does not use a comupter much, you have to call him. In talking with Sellen Ellen, she said he is looking for new borrowers, so give him a call and see what he can do. In talking with Jackie White at Accurate Title, Other Lenders that have closed rehab or investor loans recently include:
If you have owned it for at least 6 months and need to refi out, you might talk with John Rode at Advance Mortgage . And if you are looking for Blanket Loans and or refinancing out, Troy Myer Recommends Jackie Michel with JM Home Mortgage. If you call any of these people, please let them know that you received their info from Kim Tucker. If you offer a rehab loan, an investment property purchase, or a blanket loan for residential or you offer loans on apartments, please reply back here so we can find out what you do. If you have recently closed a loan with someone who did a good job, please tell me about them. For real estate investors across the country and in the Kansas City Metro in particular. Mid-America Association of Real Estate Investors is launching their new blog site: MAREI EXPO 2008. Find out all the details about our upcoming EXPO 2008 in October Review all 9 speakers Find out about our sponsors and becoming a sponsor Read How to Articles Listen To How To Tele-Seminars Updated weekly as more information and training becomes availab.e And register for the event NOW. MAREI TeleSeminar Series Presents-
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Tele-Seminar on July 22, 2008 at 7:30 Pm Eastern http://www.mareinet.com/clubportal/ClubStatic.cfm?clubID=755&pubmenuoptID=1622 How to Buy Land & Commercial Property without Any Kind of License, Credit, or a Dime of Your Own Money, Anywhere in the Nation and in Any Type of Market! 3 Great Reasons to Learn About Commercial Deals: 1. Commercial Buyers, Lenders & Sellers are Not Nearly as Affected by te Current Market Situation 2. There is FAR Less Competition 3. You Can Make Bigger Profits Doing Fewer Deals Plus . . . Terry's got a way where his team does all the "heavy lifting" but you still make a lion's -share of the profits!! If you want to learn how ANYONE can Do This Buisness, Join Tele-Seminar Host Norm Read and MAREI on Tuesday June 17th as he interviews Terry Hale. More info and register for call in numbers at: http://www.mareinet.com/clubportal/ClubStatic.cfm?clubID=755&pubmenuoptID=16226
With the recent state of mortgages across the United States, we have seen the almost complete end to:
And all in all, getting a loan for a poor credit home buyer or an investor with any credit from bad to over 800 scores is just getting harder and harder as the year goes by. Don here at our office has spent almost most of the week on the phone calling and talking to all different kinds of lenders, just to find a way to get you guys funded.
We figure that most of you are looking for several different types of loans
Then in the recent news that Fannie Mae and Freddie Mac are considering or have decided to limit the number of loans a person can have to 4, well that is further putting a cramp in your purchases and our sales (our purchases too!)
So while we can't do much about rules and regulations of the lenders other than search for that perfect loan from a bank lending their own money, that will be holding the loan and not selling it (an therefore not caring about Fannie or Freddie Rules), and that have the desire to work with the investor, well I can tell you all a little bit about alternative funding sources:
1. Private Lenders 2. Self Directed IRA's 3. Unsecured Lines of Credit 4. Partnering
Today I wanted to talk to you about Private Lenders. First let me say that you should do a little research into SEC Rules and Rules in Your State and run any forms or documents you may decide to use by an attorney in your state to make sure they comply with all the rules and regulations there.
So first of all you need to find someone who might want to be a private lender. Many people teach advertising in the newspaper something about earn a return on your investment with a loan secured by real estate. And that probably works great, but you may also start getting phone calls from the SEC guys and you don't want to go there. A couple of gurus out there advocate doing a direct mail to a purchased list of people that have purchased CDs at local banks in a certain price range. These are lists of people that you can purchase from list servers. Send out a mail piece inviting them to a lunch where you will explain the latest and greatest investment - YOU. But with all the bad press lately about the professional fund managers doing lunches and bilking the elderly into buying into annuities and other things that were not sound investments, well lunches should be on the out list as well.
So what can you do? Well the best thing I have found is to educate yourself on exactly what it is you do with real estate investing and how you make money and figure out how to explain that to other people. Then spend a little time learning exactly how a person can lend you money for a deal and act as a bank so that you could also explain that to other people.
Then your next step is to let everyone you know what it is that you do in investing, how you make money, and be sure to be able to substantiate that you make money. You might also let slip how successful this or that deal was and how much you might be paying to borrow money from a bank.
When people know what it is that you do, that you do it successfully, that you pay your bills, they will start to ask you questions. They want to learn more and you want to build up your expertise and build their trust. And then when they reach that perfect level of trust, many of the best private lenders will come to you.
Our first private lender was one of our vendors we worked with in our real estate business. And after he saw us successfully complete about 4 or 5 deals or so he came to us. His offer was that if we came across just one extra deal that needed financing and our normal way of financing was used up, could we partner with him. He would purchase the property up to a certain price on his line of credit, we would do the repairs out of our funds, we would sell the deal and make the profit and he wanted $5,000 of the profit. Not a bad deal to new investors like us.
Our next private lender also came to us. He had noted that we had bought and sold several homes, that we had both quit our jobs and were doing this full time, that we still paid our mortgage and had not been kicked out of our home and were driving nice cars. When ever we saw him he wanted to go see our latest junker house we had just bought and find out how much we had made on the last deal. Then one day the question was, "How much are you paying in interest and do you think I could fund a few deals for you?" And thus our 2nd private lender was found.
Then a year or so ago, I offered to teach a class to our local REIA club and explain how my private lending system works - just so other people who wanted to find private lenders could learn more. Out of that class, two people decided they wanted to be lenders to us. One actually became a lender and the other, well we have not been able to get a deal together with him yet.
From that class, the person who became a private lender, he has referred another lender to us and I have made another presentation to the entire REIA group and found yet another private investor.
So you can kind of see where they come from: people you already know who trust you and people you can inspire by giving them free information.
I am fairly confident that you know what it is that you do in real estate to explain to all of these people, so lets focus on how a private loan works.
First, find your private lender how ever you find them. I would suggest a face to face meeting or a teleconference with them to discuss how your system works, what it is that you do, the risks involved and what you do to minimize them, and ask them to commit on paper how much they would be willing to lend you to start with.
Then you will need to find a property that you can purchase with the funds from your lender. I usually wholesale so I am only borrowing funds for the purchase and not the rehab, but you could also borrow rehab funds as well.
Once you find the property, perform your due diligence to be sure that the property and the cost of any rehab will be under 70% of the After Repaired Value of the home. Be prepared to be conservative on that 70% rather than optimistic so you don't over tax your lender and so if something were to happen to screw up the deal, you have the remaining 30 % to save your butt so to speak.
You will go to closing just like with any other property financed by the bank and you will treat your private lender just like any other institutional lender:
This disclosure is very important. Your lender needs to understand that the market could change and what you planned to be a short term buy, and wholesale flip is just not selling and you are going to have to do a little fix up and sell as a lease to own over a 2 year period rather than a 3 to 6 month period. Have contingencies and the ability to extend the loan if you plans must change or have a back up lender that can come in and take the place of the first one.
How the transaction takes place is the lender will wire all funds in to your title company or escrow agents office. You will go in and sign all the above legal documents and the title company will pay off your seller. You should never touch the funds except for in the case of a few dollar overage in the loan amount over the amount you need to purchase. For example when my lender sends in funds from their IRA we need a number to ask for and sometimes we do not have an exact figure yet. So we estimate and round up to the nearest $500 and sometimes we get back a few $100 at closing. We use this to pay for insurance and mowing and other upkeep during the time we own it.
If you are borrowing funds for purchase and rehab, you would want to have a system set up to make sure that you only get funds as you need them for the rehab. Possibly have a time line set up for your rehab and when contractors would need paid and only request the funds to pay the contractors as needed. NEVER take the full rehab amount at closing because you may get over confident and spend the rehab money betting on the money coming in from another sale and you don't sell. Then you end up with all your rehab money spent an nothing to rehab the house with, it sets, you can't sell or rent, and your lender does not get their money.
So how should you pay your lender. There are several choices and they would depend on your investing strategy and your lenders wishes.
1) Interest Only due on sale. On our short term wholesales, we usually let the interest accumulate and pay it all at the sale of the property. 2) Interest only paid monthly, quarterly, or annually. This again would depend on how long you would hold the property and your other cash flow. If it is a long term loan and you are collecting rent monthly I would suggest to pay your interest monthly as well, just to make sure you lender gets paid. 3) Amortize and pay monthly The best way to pay on a long term hold would be to amortize it and pay a little principle and a little interest each month so your tenant's payments are paying down your loan. You don't want to be in a situation where your long term buyer pays you payments over 10 years and you decide to get better cash flow by paying interest only. Then when your buyer reaches the payoff part of their loan and you then have to come up with the full loan amount to pay off your lender, it would be much better to amortize and have your loan run out before or at least at the same time as your long term buyer. 4) Play with the numbers and figure out the best scenario for your situation and that will work for your lender.
How much should you pay your private lender? That will depend on a lot of factors. A lot of the gurus state that the going rate is 15% or so, but that is for a hard money, institutional lender and some of your private lenders might not like the 15 % so here are some ideas.
1) for the older guy that has all of his funds in bank certificates of deposit at 3 to 5 % you might offer 6% to 8% 2) for the person who is doing ok in the stock market a rate of 10% to 12 % might be more in line 3) for the savy investor lender, they may want to charge fancy things like points and interest like a rehab lender, they may not want to, they may go for a 2% interest and then a percent of the profit in the end.
So what you pay will all depend on what your lender wants and if you can't make those numbers work, don't borrow their money. They may come around to your way of thinking in the end.
Traditionally we like to work our interest rates in the following manner:
1) Short Term Flips - those houses we want to buy and sell in 6 months. We like to have a 1 year note at 8% to 10% depending on the loan amount and the risk of the deal. We could pay our lender off in 3 days and it has happened this way and other times it could take longer, we are just closing on one that took longer almost 9 months. 2) Longer Term Tenant Buyer Sales - these are houses we buy and sell rent to own to a buyer over a 5 to 10 year period. These are homes that we will need the loan in place for 5 to 10 years, we have a tenant buyer already in place to buy from us and has a lower risk. We typically pay between 6% to 8% on these again depending on the loan amount and the risk of the deal. 3) Full 30 year notes. These are houses that we could go to the bank and get a loan at 6% to 7% but because of the new rules of 4 loan rule may not be able to get a bank loan, or if we do we would need to package 4 loans up into a blanket loan that then becomes commercial and would be around 4% to 5%. On a full 30 year mortgage with a private lender, we would have to discuss rates, we have not done one of these yet.
I hope this long article - the computer says I am up to 5 pages - will help you in finding your funding through private lenders. Some other resources you may want to look at:
1. Information on our web site: http://3689.goinetusa.com/custom/index.cfm?id=148134 2. Get Alan Cowgill's FREE CD and register for his free downloads: http://3689.goinetusa.com/custom/index.cfm?id=142809 3. Prosper Lenders: http://www.prosperlenders.com/ 4. The Path to Private Lending: http://www.mareinet.com/clubportal/clubdocdisplay.cfm?clubID=755&docID=7838&priv=0 5. Finding Funding for Your Deals: http://www.mareinet.com/clubportal/clubdocdisplay.cfm?clubID=755&docID=7839&priv=0
Kim Tucker Tucker One Properties, Inc. 816-523-4400 |
Kim Tucker Kansas City, MO More about me… Tucker One Properties, Inc Office Phone: (816) 523-4400 Ext.: 0 Email Me ;) Links;) Tags (Tag Cloud);) Archives
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