I’m  not surprised but I will admit that things went better than I had expected!

Because one of the deals involved flipping it became very obvious that wholesaling was the most
challengeing of all because it involved getting the end buyer’s approval.

The Great Investor Equalizer

Fortuantly, our end buyer was local and a very experienced investor. This helped but
most investors simply don’t have a high level of financing sophication so there’s always
the teaching and training to give them the confort they need.

Remember, investors are basically GREEDY by nature and will try all sort of things to get your price down.
However, when you tie the financing into the deal, the game changes.
We were able to get  the FULL appraised price for all our properties because
we had the financing that most investors can’t get .  And we know it!

Having the financing in place has proven to be the great equalizer.
“Pay my price or get your own financing” is the phase that pays.

We were able to get all the deals placed to a tune of $600K .
In my opinion, the program is best used for purchasing for your own portfolios.
My first contact with the Bank was on May 7, 2010. 

In less the 20 Days we were able to get both offers approved and to get the financing in place for
both Deals. Again, the flip adds an additional level of complexity to the deal dynamics.

Follow my deals and the videos at:!
www.commercialfinancingacademy.com

After talking with him for 20 minutes, I discovered the following:

1. This investor had placed $10,000 dollar down on this property and was agreed to  an additional $20,000 down in 14 days.
2. The property was priced at an 11% Cap Rate
3. The property was 90% occupied

This looked like a very simple deal right?  Yes and no!
Here’s what happened:

I did a three way call and was able to get a verbal quote from a national lender
at 102% LTC. Loan To Cost. This tool about 5 minutes to do.

The investor would need to put 1% down and he would be able to get 1.5% back at the closing 100%  “tax free”.
This investor needed to put$50,ooo in this deal and he would get $75,000.00 back at closing plus all impounds and the property.

The Problem And The Pattern

The investor had no clue as to how to rise $50k even thouugh he would be getting back $75k tax free and the property.

This is the pattern I see so often.

No Money And No Knowledge = No Results!

Has this happened to you ?

Unfortunately, this investor will lose his $10,000 because of his lack of money and knowledge.
Typically, you can over financial short comings with knowledge. But when there is neither knowledge or
money available.. There really isn’t much you can do.

How do you overcome these problems?

I always begin with the property. If the property can bring 102% financing to the table, I’m sure
I can squeeze an additional 1% from the property also.

Option 1: I would begin by backing the LTC down from 102% to 100% and have the additional  1 % rolled into the loan.
Option 2: I would run an amortization schedule on the property and offer a percentage of the write off  without any cash flow
to a national mutual .
Option 3: I would conside putting together a syndication.
Option 4: I would consider wholesaling the property to a REIT.

This is one of the numerous problems that we provide solutions for at our live workshops.
Visit www.commercialfinancingworkshops.com for our next event.

Tell me what do you think. How would you solve this problem?
If I gave you a 102% LTC Plus lender could you raise the $50K?

I’m listening

Durante