Raising private capital, also known as raising private money, is one of the most common ways of funding real estate deals. Those huge real estate investors who own $100M+ in real estate (probably) didn’t buy their portfolio in cash. Through partners, joint ventures, and syndications, you can grow your real estate portfolio to an impressive size, without using any of your own money.
But maybe you’re trying to get your first real estate deal, what do you do then? Start talking to your friends, family, coworkers, or anyone around you to let them know what you’re doing and that you’d be open to taking an investment. When good deals come along, it’s hard to not find interest from those who have money just sitting around, waiting for a great opportunity.
So get out there! Start networking at your local meetup or hop on the BiggerPockets forums and chat with local investors and landlords about your plans.
00:00 Fund Your Deals with Private Money 00:50 Keep it Simple (and Conversational) 02:22 Networking 02:43 Sterling's First Private Investor 04:19 Seller Financing & Partnering 06:57 Crowdfunding 07:26 Retirement Accounts 07:54 Syndications 08:30 Common Mistakes When Raising Capital 10:20 There's Always a Way!
Episode #176 - Nasar El Arabi (aka the Real Estate Doru) lost his job at age 26 during the great recession, but he used that as an opportunity to go full-time into real estate investing by wholesaling and flipping houses. Today he has a 7-figure real estate business and a portfolio of rental properties. In this interview, learn how he got started, what struggles he had along the way, and how he found his niche in Charlotte, NC.
TIMESTAMPS: 0:00 - Intro 4;18 - Current business & background 9:21 - How Nasar approached REI after going full-time 13:33 - Preparation and persistence 19:29 - Creative Real Estate 22:46 - Process of wholesaling 30:00 - Struggles of wholesaling 33:26 - Transition into flips & rentals 36:59 - Depreciating vs. appreciating assets 42:10 - Importance of buy & hold 44:18 - Why certain neighbors were disinvested 58:09 - Solutions to disinvested neighborhoods 01:03:45 - Advice for those reaching FI 01:06:03 - Closing thoughts
Caleb VanTimmeren and his business partner Kyle Aho are living the dream. They reached their goal of being full-time real estate investors and are now sharing their story with the world.
Bill Allen shares with us how he's been able to achieve so much so quickly. We dig into how action produces results where as overthinking jams us up and causes analysis paralysis. Find out how you can get free recordings of past Flip Hacking Live events as well!
The most common reason, cited by nearly half of those who provided reasons, is to understand what home buyers do and don’t like about the homes. Thirty-six percent of those respondents said they wanted to use the camera to gather information that could be useful during negotiations. Twenty-three percent of them wanted to see what their real estate agent was saying about the home.
They sky is not falling and the market isn’t turning or crashing.
Inventory numbers in ARMLS (Maricopa and part of Pinal County) are running about 7000 homes. That’s up over 100% from a few months ago but nowhere near “normal” of about 20,000. It would have to go up another 400% just to be “normal”.
Some of this is due to buyer fatigue (“I’m sick of this S#$@!) and some is from additional homes coming on the market as the moratorium for forbearance is starting to end for some homeowners.
If you have clients currently selling or thinking about selling a home, tell them to be patient and temper their expectations. Not every deal is going to be a blood bath with multiple offers on it. You have to have the right house in the right area at the right time.
The market may flatten or even pull back in some areas but there’s no crash coming. For those of you who remained awake during Econ class, you all know that prices don’t come down when demand outweighs supply.
Also, remember that market prices and interest rates ARE NOT connected. For example, if you have a .5% rise in rates, you would need about a 10% fall in prices, just to be even on a 300k deal. So if you know people waiting for “prices to come down”, they better also hope that rates don’t go up during the same time or they gained nothing on payments/debt service affordability.
2nd Homes and Investment Properties:
These still tend to be a little tenuous depending on your buyer’s profile.
The more down, higher fico and less risk (rate and term vs. cash out; 1 unit vs. 2-4; etc.) along with going on a shorter term (15 vs. 30) can give your buyers some advantages in pricing.
Over half of these types of files are being brokered out to nonQM lenders due to the price hits (LLPA’s) on the agency paper.
Brokered files will, typically, take longer to close so keep that in mind with your contract closing times.
Appraisals/Inspections:
We’re definitely seeing higher costs and longer turn times the further you get out of town.
These can be upwards of $1000 and take up to 30 days to complete, if you can even find an appraiser at all willing to take the order.
Remember that appraisers are 1099 contractors so they don’t really report to anyone.
Seller Concessions:
Seller concessions seem to be coming back if you know how to structure a deal right. Just closed one VA last month and one this week with $7000 in concessions each! Both of these we ADDED $7k to the asking price. This WAS NOT a seller reducing their proceeds. They netted exactly what they wanted to had we offered them full price with no concessions. Do your homework on closed comps, pending sales and current listings. If there’s room, take your shot at the title.
Guys, shoot for the stars in your offers. If it doesn’t appraise, the concessions are the first thing to go so you’re really not in any worse shape than when you started. And many of you are waiting the appraisal contingency anyway. All I know is that if you don’t ask for them you won’t get them!
Great job by Penn Washington (C-21) on getting our Veteran, who works for the State of AZ, into a home with a 56% DTI and $7000 in concessions in the hottest real estate market in 50 years! That’s being a great agent and an advocate for your client! (PS: That’s big time lending too. LOL).
Your Personal Loans:
With the refis going again, I’m getting more calls from you guys on how to structure your own deals. One quick strategy that you can all start with if you haven’t already.
All agency guidelines all for debts to be omitted from the borrower’s debt ratios if paid by a business if already expensed on the business return or Schedule C. For example, if you have a $500 car payment, to meet a 50% debt ratio on that we need $1000 in income. However, if your car payment is paid out of your business account, we can omit that from your debt ratios. That means you need to show $1000 LESS in income. What’s your job when filing taxes? Show the LEAST amount of taxable income!
Reimbursing yourself doesn’t count. Make sure you have a business account opened and pay everything out of there. That will give you the best chance at qualifying for a mortgage with the least amount of income shown.
If you have questions on what you’re seeing out there or want to run scenarios, reach out anytime. I am really good at giving you ideas and options to make things work that you might not have thought of before. That’s my job.
Have a great rest of the weekend and let’s make some money in the back half of 2021!!!
Michael Yamamoto Regional Manager NMLS# 199744
| M: 602.402.9999 | F: 800.630.1396 6909 W Ray Road, Bldg. C, Suite #115 | Chandler, AZ 85226
“Should I invest in real estate now or wait?” “Is now a good time to invest?” “What’s next for the housing market?” These are the questions Dave has been asked for months, and as the 2021 housing data has started to flow in, Dave has gotten a better picture of how exactly to answer these inquires.
While investing always carries some amount of risk, real estate investing may be one of the lowest-risk investments when done properly. Appreciation, cash flow, amortization, and tax benefits make this type of investing one of the most sought after in the United States, and the world.
But as the 2021 housing market continues to skyrocket up, are these benefits still tangible for regular investors?
00:00 Is Now the Time to Invest? 01:21 What Are Your Goals? 02:25 Real Estate in the Short-Term 05:50 Real Estate in the Long-Term 10:07 The BIGGEST Risk (That Isn't So Risky) 14:27 Focus on the Long Run
Investors purchased 67,943 homes totaling an estimated $49 billion during Q2. This marks a 15% rise from Q1 and a 107% increase from the same quarter in 2020 (note the market was stalled due to pandemic restrictions).
The National Apartment Association, a landlord lobbyist group, recently filed a lawsuit in the U.S. Court of Federal Claims, seeking to recover damages from what the organization alleges are “severe economic losses under the U.S. Centers for Disease Control and Prevention’s (CDC) overreaching federal eviction moratorium.”
A day before the federal eviction ban lapses, President Biden is using the levers he has through federal agencies to keep evictions on ice until September
A licensed real estate agent has the right to list a client’s property on the MLS (Multiple Listing Service). MLS is a real estate marketplace service in the US that facilitates all real estate sellers and buyers before the closing stage. If your real estate is registered officially in MLS, all realtors and buyers can
Not long ago, I met a guy from my church named Caleb VanTimmeren. We got connected because one of the pastors here knew that both he and I were active in the real estate space, and figured we should meet up and get acquainted.
I had lunch and with Caleb and he told me his story, and I was kind of blown away because he and his business partner Kyle Aho have been able to reach the dream that so many aspiring real estate investors are after, and they did it relatively quickly, all during a time when the competition has been very high and real estate prices have been insanely expensive.
Today we’re going to talk about how they both did this while working full-time jobs, how they found deals that could actually cash flow, how they found the money to make it all happen, and a lot more.
Federal Reserve Chairman Jerome Powell said the economy has made progress toward employment and price stability goals, but it won't be tapering asset purchases yet The Federal Reserve today said that while the economy has “made progress” toward employment and price stability goals, it will not yet change its stance toward asset purchases.
It’s a sad truth that people will spend more time trying to lower their cell phone bills than they will trying to lower their taxes. The subject comes up and brains get foggy. The lack of information and education on things such as cost segregation and tax credits is costing investors thousands each year. Yonah Weiss helps investors analyze and strategize to save hundreds of thousands in taxes every year. In some cases, he has helped his clients to pay no taxes whatsoever. Here’s (the perfectly legal) way he does it…
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The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac (the GSEs) are extending the moratorium on single-family real estate-owned (REO) evictions until Thursday, September 30, 2021. The REO eviction moratorium applies to properties that have been acquired by a GSE through foreclosure or deed-in-lieu of foreclosure transactions.
Greg McKeown saw first-hand how success can lead straight to professional and personal failure, during his career evaluating and coaching Silicon Valley executives. The heart of the problem, he says, is the insidious idea that we can do it all. As entrepreneurs and executives find success, they're often overwhelmed by expectations and options, and end up losing the single-minded focus that made them successful in the first place. Taking inspiration from legendary designer Dieter Ram's philosophy of "less but better", McKeown outlines an antidote in his book Essentialism: The Disciplined Pursuit of Less, which features practical tips on how to figure out what's most important, eliminate the trivial, and establish routines for effortless execution. McKeown earned his MBA from Stanford Graduate School of Business.
Real Estate Negotiating tip #2. Do you know what the number one question all real estate investors need to ask our sellers? Real estate wholesalers and bird dogs constantly bring us deals where they have all the information about beds, baths, repairs, and values but they often omit the biggest question we need to answer in order to construct a solid offer. Our offers must get the home owner where they want to go or the deal isn't going to work. Since 2004, most sellers we deal with are not interested in getting an all cash offer close in 10 days. It's up to us to become master negotiators and figure out what's best for our seller, not for us. Today we'll go over how to do that with the most important question you must ask during your negotiation...
00:00- Intro 0:56 - What is the number one question we ask sellers 3:50 - how to construct offers instead of offering the seller money 6:20 - What are some of the reasons people aren't thinking about money
Home prices rose 16.6% in the 12 months ending May 2021, according to data released Tuesday morning by the S&P CoreLogic Case-Shiller index of home prices. That’s the biggest annual increase since the report began collecting data more than 30 years ago.
The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, fell 1.9% to 112.8 in June. Year-over-year, signings also slipped 1.9%. An index of 100 is equal to the level of contract activity in 2001.
A day before the federal eviction ban lapses, President Biden is using the levers he has through federal agencies to keep evictions on ice until September
Some Highlights If you’re thinking of buying a home but wondering if waiting a few years will save you in the long run, think again. The longer the wait, the more you’ll pay, especially when mortgage rates and home prices rise. Even the slightest change in the mortgage rate can have a big impact on your buying power no matter your price point. Don’t assume waiting will save you money. Connect with your trusted real estate professional to set the ball into motion today while mortgage rates are hovering near historic lows.
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