Paul Higbie's Blog

Residential Rental Financing Available

Paul Higbie (Investment Capital Partners, LLC) — Tue, 06 Oct 2009 16:32:50 -0700

Hello Everyone,

After much searching and hearing a lot of, "no, not at this time", I have found a Kansas City lender that is lending acquisition, rehab and long-term hold money for residential rental property. They loan up to 75% of the after-repaired value and the rest I can tell you about if you call.

This is a great program but only for investors that will be holding these properties.

I look forward to talking with you soon.

Paul Higbie

913-636-7504

paul@icpkc.com

82 Duplex Units For Sale - Kansas City Area

Paul Higbie (Investment Capital Partners, LLC) — Wed, 21 May 2008 17:27:01 -0700

Seller has 82 duplexes, 41 buildings for sale, asking $130k per door. These are newer units, less than 5 years old, 1500 square feet, 3/2/2 with finished basements. Seller wants bulk sale and part of his note is assumable.

Please contact me if you are interested and qualified.

Paul.

913-636-7504

Growth versus Income

Paul Higbie (Investment Capital Partners, LLC) — Mon, 07 Apr 2008 08:06:57 -0700

If you are a real estate investor, or investing in anything, what is your reason for investing? Do you need current income or do you need growth? The answer will provide you with guidance in your investing and should produce dramatically improved results.

The best way to answer that question is to create an investment, or financial plan. If you need income today to help meet your monthly obligations then you need to acquire rentals that will produce a higher Net Operating Income (NOI) but may not appreciate much in value. On the other hand, if you are building wealth, perhaps focusing on retirement needs, you will be more interested in property and areas that hold their value and will appreciate in value. These are two very different approaches and most likely the same property will not meet both needs.

Creating a financial plan and doing the work to examine where you are, where you want to be and how best to get there will help you answer the question. Use the proper investment property to meet your financial goals and your goals will be achievable. If you have not done the analysis and asked yourself the questions, and then spent the time to answer the questions, it is like pushing rope. You can expend a lot of energy without having much in the way of results.

Do the analysis, create the plan, and then implement the plan. Achieving your goals is a beautiful thing.

When you need financing to help meet your real estate investment goals, contact me so I can be of assistance.

Paul. 913-636-7504

Hotel Project Seeking Equity Partner

Paul Higbie (Investment Capital Partners, LLC) — Fri, 07 Mar 2008 08:28:44 -0800

Good Morning!

I have a client that is seeking an equity partner to participate with them in the construction and ownership of an upscale, extended stay hotel in the midwest. They have already signed the franchise agreement with an internationally recognized brand, all entitlements are in place and they are just missing one ingredient, cash and an equity partner.

My client is an experienced general contractor building hotels throughout the midwest and this is one they are building and will own for their own account. This is a great opportunity to JV with a proven builder that will be doing this again and again.

If you are interested in this opportunity and can bring $3mm to the table, or provide an alternative structure to accomplish the same thing, I would like to talk with you.

Sincerely,

Paul Higbie

913-636-7504

Good News From Rate Changes

Paul Higbie (Investment Capital Partners, LLC) — Wed, 23 Jan 2008 15:20:02 -0800

Thank you Mr. Bernanke for the recent 75 basis point rate cut, but hold off on the 50 basis point cut slated for later this month. We may all benefit from the drop in rates but when they drop too quickly it can be a bad signal to the markets and the economy in general. The Fed must do a careful balancing act.

Many investors are approaching me about blanket loans and one of my lenders has responded, and responded in a big way. They are now offering blanket loans at a fixed rate for 5 years at LESS than 6% with a 20 year amortization. Blanket loans are a wonderful tool for investors that want to hold rental property, get it off of Fannie and Freddie loans so that they do not have the restrictions that limit them to holding 10 properties. Just like any tool, blanket loans have their time and place. Give me a call so we can discuss whether they are right for you at this time.

Blanket loans may also be used when purchasing and rehabbing property. While this is not as common as simply refinancing current holdings, it can be done. I am also asked about getting cash out when refinancing into a blanket and the answer is yes, possibly. Other factors come into play such as LTV, financial strength of the borrower and the amount of cash out desired.

Check us out at www.icpkc.com for your financing needs, both residential and commercial. We also have hard money investors that are looking for good opportunities. With the current turmoil in the markets more and more investors are turning to hard money as an excellent vehicle for financing their project.

Remember, it all starts with a plan.

Hard Money is Cheap!

Paul Higbie (Investment Capital Partners, LLC) — Thu, 17 Jan 2008 12:53:38 -0800

What did I say? I must be crazy to say that hard money is cheap. Most private money costs 5 points, or more up front, 15% interest during the life of the loan, and heaven help you if you miss one payment. How is that cheap?

Well, compare those costs on your next project to the cost of taking on a partner to buy that great investment property that just came on the market. You know, the one that needs only paint and carpet, can be purchased to produce a cap rate of 15% and is in an appreciating area, but your bank is requiring 20% cash into the deal. Oops, no cash, no bank loan, no great property. Wait, I will get a partner with the financial strength to make this deal work.

Ok, partner wants 70% of the deal, after all he is the one with the cash into the deal. Yeah, but I found it. True, that is why you are getting 30% of the deal. You want this building for a long-term hold but he wants to stabilize it, show good income and sell. Wait, but I found the deal. Yes, but who put the cash into the deal and who is taking the risk if it goes sideways? Oh yeah, the financially strong investor.

So, hard money at 5 points, 15% interest, and I control the deal? Sounds cheap to me.

Why Another Blog?

Paul Higbie (Investment Capital Partners, LLC) — Mon, 14 Jan 2008 09:00:34 -0800

Well, the answer to that is simple, I am a real estate professional that is interested in doing business with other real estate professionals! This blog will contain practical information about real estate investing, matching the right loan with the right situation (after all, I am a lender), avoiding some of the bumps and bruises that do seem inevitable and finally just some of my musings on the goings on of life and the pursuit of happiness.

I have developed a number of topics that I will share with you and I am always looking for your feedback so please post comments. I also like to share links and good quality resources when I find them so look here for referrals to good people, tools and resources.

Enough of my rambling, let's get started.

There are 3 phases to every real estate investment. The first phase is the purchase phase that includes developing a plan specific to this investment, marketing, due diligence, financing and finally the purchase. The middle phase is the holding and operation of the investment. Depending on your strategy this phase may be very short, if flipping the property via a simultaneous closing, or could stretch over a number of years if the property is a long term hold. The final phase is the exit phase when the property is sold or traded and the investor moves on to the next investment.

The most important of the 3 phases, and the most difficult to execute properly, is the final or exit phase. Everyone has heard that investors make their profit when they purchase the property. This is true, as long as the 2nd and 3rd phases are executed correctly and the investor follows their plan. For those that have not purchased their first piece of investment property, the first phase seems the most difficult. Finding the property, analyzing the numbers, doing due diligence on the property itself; all of these can seem overwhelming and surely must be the most difficult and most important. Yes, they are extremely important but the most important phase for making a profit as an investor is following your plan and executing your exit strategy, followed by the 2nd phase or holding phase of the investment.

Wait until you are in the exit phase of an investment and have not created enough reserves to hang on through the slow market and then let me know which phase is the toughest. Now it is not about projections and return ON investment, it is about reality and attempting to simply get a return OF the investment.

Do your homework, develop a plan, and have multiple exit strategies covering a multitude of scenarios. This is all about preparation, planning and execution of a sound strategy.