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Home >> Stock Forums >> Private Mortgage Investing

Private Mortgage Investing

AJ290 said: "Hello, all. I'm new here and glad and I found this place. Hoping to share what I know and what I need to know. :) I'm looking to park some cash in an investment that is both safe and provides a healthy return, (aren't we all?). I know a real estate investor who is offering an 11% return if I fund his deals and act as the bank for him. He would bring me the deal and I say yay or nay. I'm protected by the equity in the deal, (at least 30% below appraisal). I've got the cash, and I'm not interested in earning 3% in a CD. What do you think? Thank you."

Aligator said: "[QUOTE=AJ290;66074]Hello, all. I'm new here and glad and I found this place. Hoping to share what I know and what I need to know. :) I'm looking to park some cash in an investment that is both safe and provides a healthy return, (aren't we all?). I know a real estate investor who is offering an 11% return if I fund his deals and act as the bank for him. He would bring me the deal and I say yay or nay. I'm protected by the equity in the deal, (at least 30% below appraisal). I've got the cash, and I'm not interested in earning 3% in a CD. What do you think? Thank you.[/QUOTE] Meh,....to me, it doesn't pass the smell test. 30% below appraisal? Why would a home sell for 30% below appraisal? I'm an investor, and if I knew of something selling at a 30% discount I'd bid it up, pay a 20% discount and re-sell it the next week. And the next time it sells, will it sell for 40% below appraisal? 11%? Who the hell has to pay 11% for a loan, and gets to buy a house at 30% below appraisal? Protected by the equity of the deal? Isn't that what Countrywide said?:) Bear Stearns?:)"

AJ290 said: "[QUOTE]30% below appraisal? Why would a home sell for 30% below appraisal?[/QUOTE]Are you kidding? Have you followed the real estate market recently? 30% below appraisal is the norm these days. Two weeks ago I purchased a property 43% below appraisal price. [QUOTE]11%? Who the hell has to pay 11% for a loan[/QUOTE]By purchasing for cash, that's how those 30% and 40% below value deals are found. Cash purchase, fast close, motivated seller. . .it equals great buying opportunities. There's an expression in real estate: It's not the cost of money that matters, but the availability. Once he is able to secure the deal for cash, a few months later, maybe a year, he refinances with traditional funding. He has his house at a great price. The investor receives his principal and all accrued interest at 11%."

Heather said: "It's your money to do with what you will. It seems you have your mind set on investing in real estate, so have at it. Private Mortgage companies go under every day, too. On a more personal note, I know a guy big into "real estate investing" - a flipper - and he hasn't "flipped" anything in years. In fact, he's barely able to make his interest payments. Three years ago he was telling tales of glory, now he's driving a 2 seater Kia. Good luck whatever you decide to do.."

Aligator said: "[QUOTE=AJ290;66096]Are you kidding? Have you followed the real estate market recently? 30% below appraisal is the norm these days. Two weeks ago I purchased a property 43% below appraisal price.[/QUOTE] There would be something wrong with the appraisal price, if that's the case. [QUOTE=AJ290;66096]By purchasing for cash, that's how those 30% and 40% below value deals are found. Cash purchase, fast close, motivated seller. . .it equals great buying opportunities. There's an expression in real estate: It's not the cost of money that matters, but the availability. Once he is able to secure the deal for cash, a few months later, maybe a year, he refinances with traditional funding. He has his house at a great price. The investor receives his principal and all accrued interest at 11%.[/QUOTE] Why would a seller care where the money comes from? He gets all his money at closing. Makes a big difference to the buyer, but not the seller."

AJ290 said: "[QUOTE]There would be something wrong with the appraisal price, if that's the case.[/QUOTE]And you know this how? [QUOTE]Why would a seller care where the money comes from?[/QUOTE]Because a cash buyer doesn't need to go through an underwriting process. A cash buyer can close in 7 days, not 45. Have you ever invested in real estate before? I suspect not."

Heather said: "Where is the land located at?"

sarailanit said: "Hi:laugh: Sorry!!:wave::wave:No idea:roll:"

Aligator said: "[QUOTE=AJ290;66219]........Have you ever invested in real estate before? I suspect not.[/QUOTE] Hopefully your intuition regarding real eastate will serve you better than your intuition regarding any investing I may have done.:laugh:"

pranith said: "I think real estate is an good investiment as of know. I think you are picking the right option in the right time and you are expecting good returns in this."

jolllyroger said: "I'm a real estate investor. I will be happy to show you higher returns than that in Real Estate investing. It is quite easy to turn 100 percent annualy. I prefer to split the net profits with my investors 50% / 50%. I wrote an article That is published nationwide read it to get an understanding. I think its attached to my signature. Aligator Homes sell below market value because of distressed conditions .....property run down.. ...owner lost job, pay cut, need to move for job ...etc Heather The guy you know only had one strategy for investing in real estate. I'm sure he over leveraged himself like many by refi all equity out of his properties to use for his flips. Most likely he was a rehaber with to many properties tied up in a time conuming process of repair. The time value of money dictates diversity in investments in flip's. I stay out of the rehab business due to (TVM) the time value of money. He couldn't liquidate his properties fast enough to cover the down turn. Aligator again Sellers do not wish to tie up their homes sale with people who may not qualify for mort, cash is king when buying anything. If I'm sitting across the table from you negotiating on your home in a slow selling market and you have a serious need to sell fast, (ie... facing foreclosure) I open a brief case with $100,000 and make you an offer, hmm, hat do you think will happen. as far as appraisal price. A home can sell for less than its fair market value ...already established that...Foreclosure sales are not allowed to be used by appraisers to determine a properties value. AJ290 A cash deal can close in as long as it takes to sign the paperwork. Title escrow and dispursement of funds can occur in 3 days. The above link shows how investing in real estate can give astronomical returns. You just need to do your due diligence and be sure to have plenty of exit strategies. I can sell a house in todays market in any town USA for 95 to 97 percent of full market value in 2 weeks or less. The strategy I use to sell a home so fast makes full use of TVM (time value of money) to increase the returns I get for my investors. I split my deals 50% / 50% because my investors brag to people about their returns and bring more investors, allowing me to control more properties. I would rather have half of a million than 89 percent of one hunderd thousand. If any one has further questions let me know."