Dallas-Fort Worth Real Estate Investor Club

Investment Lending 101 (Part 5: Test Time!)

  • 30 Nov 2016 6:01 PM
    Message # 4432966

    We’ve been busy in this series and there is still more to cover! Yikes!  Hopefully, you know more now than when you did.  Get Powerful.  Gain Knowledge.  Become a property tycoon!  You need to be smarter than the competition so you can get the next deal. Knowing the lending rules is part of your education to being a successful investor. 

    So I will leave you with a test.  Let’s test your knowledge and see how you do.

    Scenario #1.  You have 2 different homes that could be a deal but you can only do one:

    • Home #1 - Home needs no work.  Renter is already in it.  Purchase price is $100,000 and it’s listed below market value.  Market value is $105,000.
    • Home #2 -  Home that needs no work.  No Renter is in it.  Purchase price is $100,000 and that is at market value.  Owner is offering owner financing at 7.5% if you put 10% down.

    If you could only do one deal above which scenario above is better? Or should you pass on both?

    Scenario #2. 

    Home needs work.  Purchase price is $50,000.  Repair is $25,000.  After Repair Value is $100,000.  You have $15,000 cash available to you right now for this deal.

    Should you wholesale this deal?  Get hard money and then flip? Buy and hold? Pass on the deal entirely?

    And here’s the answer: there is no “right” answer to either of these Scenarios.  Each answer could be different based on each individual investor.  The right answer is based on your personal goals.  But those scenarios above are going to come up in front of you one day.  With an understanding of lending and the loans available to you hopefully you can make better decisions.  We aren’t here to make the decisions for you but we are here to help you make an informed and knowledgeable decision the next time a deal presents itself.

    Thanks for reading and if you have any questions feel free to post away.  Happy Hunting!

    Andrew Postell

    Gateway Mortgage

    817-873-0621

    Andrew.postell@gatewayloan.com


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