I have watched this a few times and I took away how the private money lender enable you to have none of your money in the deal. Thank you for clear visuals. Got it!
The creative financing videos always show me that we do not have money problems, instead we have idea ‘challenges’. Finding a deals are all over the place.
Instead of a private lender, consider offering the property to a lease-option tenant/buyer or wrap-around owner-occupant price $156000 with $26000 consideration at commencement. Monthly lease-option payment of $1200 to $1250, or wrap PITI of $950 to $1000 (owner pays everything else). Monthly positive cash flow is about $150 or more, and all repairs and headaches are responsibility of the resident. Less than 30% of lease-option residents will exercise the option, and the wrap-around can be cancelled for deed-in-lieu if unable to refinance or resell.
Wow...i had to re-wind and watched multiple times to fully digest the info but so many great nuggets. Even before adding on 2nd lien HML, the FCF 276/mo. is throwing off ~ 20% CoC, which is impressive in today's market. What's the plan for paying off the Balloon at end of yr 5? Refi using conventional or maybe selling/1031? Could you please share about how best to handle/mitigate risk w/r/t Balloon payment? What type of properties is most suited to this strategy (i.e. newer built as opposed to oldies)?
Matt, lots of gurus are unique with their style of teaching and education. And it’s not whether one is better than the other, but what gravitates the inspiring wanna be investor (uh that would be me heh heh heh) to pursue. There are those who are creative and visual but suck totally with just words, terms (me again) and an instructor who is monotone and boRRRRing. Delighted to know you’re one of those instructors who make your videos not only inspiring but fun to watch and easy to learn with colorful illustrations. I’m all for illustration and it’s why I got my degree. Well so much that did for me but that’s another story. Keep showing numbers for it is visually appealing. Especially to me. Not all gurus will do this and I’ve seen other that do but it’s sloppy and messy and defeats the purpose though the education was on point. When it comes to your portfolio (Not the Real Estate type), it must look clean, sharp, crisp and damn near flawless because this is the artist’s skill. You don’t want your to talent to be recognize as the artist who has smudgy and dirty work even though the image may still look so bad A$$! I’ll be looking a this one over again.
recasting the loan at year 3 and adjusting for any principal payments......Can you make another video on how this interest rate adjustment after the first term ends works? Also why did you ask the lender for more than you needed instead of cash flowing more long term? Is it because of how good cash is to have right now? That is a risky position for a lender to have a 2nd that makes it above 90% of ARV and at only 6%. How long can you really do interest only on the PML?? Won't you eventually have to pay it in full or only when you sell it? The principal won't ever change on that, correct? Can you also make a video on how to get the PMLs to lend on something in 2nd position with such a high LTV?
The obstacle I have is structuring a deal like the one that got accepted😞 I'm thinking of sending a seller a letter of intent but I only know 2 option 1st obviously the all cash offer then & the 2nd seller carry monthly payments with a terms and by the 3rd I don't know any other. Wish I had someone like Matt to go to that would give me more confidence
@@EpicRealEstate let me visit to shadow you😓 or you can help me come up with a 3rd option to send a letter of intent to a seller. I want to become a pro on structuring terms
Might seem like little cash flow, but it cost me nothing to get it. Further, to generate that type of monthly cash flow inside the highest interest-paying money market account available right now, it equates to a balance of $166,909. Only have to 5 more of those to equal a bank balance of $1,000,000. All a matter of perspective. Thanks for watching and sharing your thoughts :-)
Epic Real Estate Investing Thanks Matt! I’m looking for a good private money source for instances such as this. The few I looked into wanted higher rates; Any ideas?
I subtract 40% for taxes, insurance, maintenance, vacancy and property management. After it's under contract, I confirm the 40% is accurate and make adjustments if necessary.
Not sure what you mean for the third time, but with the six-month moratorium on payments, the ROI increases quickly... and it was a best-case scenario if I found a tenant right away. I have found one, but will miss the first payment, but I've got 5 payments coming to me with no debt payments due.
Sorry but folks will never be able to find a vendor who will wait 100 months for the rest of the money. Why would he? If he is selling at almost 10% below market value, he'll get a buyer pretty soon.
@@topcomment3816 Why would the vendor not just rent it out rather than wait EIGHT years for his money? Part of the rental income can be used to take out a short term loan.
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Matt that was great sure like to see another one.send me the site email comcate thanks
@@brendataylor6465 Thanks, glad you enjoyed it. I will be doing these more, seems to be a hit!
What did you want me to send you?
I have watched this a few times and I took away how the private money lender enable you to have none of your money in the deal. Thank you for clear visuals. Got it!
The creative financing videos always show me that we do not have money problems, instead we have idea ‘challenges’. Finding a deals are all over the place.
couple smart tips. delay first payment. call seller to offer to buyout early.
Instead of a private lender, consider offering the property to a lease-option tenant/buyer or wrap-around owner-occupant price $156000 with $26000 consideration at commencement.
Monthly lease-option payment of $1200 to $1250, or wrap PITI of $950 to $1000 (owner pays everything else).
Monthly positive cash flow is about $150 or more, and all repairs and headaches are responsibility of the resident.
Less than 30% of lease-option residents will exercise the option, and the wrap-around can be cancelled for deed-in-lieu if unable to refinance or resell.
That breakdown was freaking amazing bro 💥💥💥💥💥💥💥
Thank you :-)
wow this was great Matt. very creative for an infinite rate of return!
Can you go over your CROI calculations? Why do you multiply the $1200 by 60%?
My guy! Thank you so much! Appreciate the shout out.
You bet. Thanks for the idea. It seems to be a big hit :-)
Wow...i had to re-wind and watched multiple times to fully digest the info but so many great nuggets. Even before adding on 2nd lien HML, the FCF 276/mo. is throwing off ~ 20% CoC, which is impressive in today's market. What's the plan for paying off the Balloon at end of yr 5? Refi using conventional or maybe selling/1031? Could you please share about how best to handle/mitigate risk w/r/t Balloon payment? What type of properties is most suited to this strategy (i.e. newer built as opposed to oldies)?
Matt, lots of gurus are unique with their style of teaching and education. And it’s not whether one is better than the other, but what gravitates the inspiring wanna be investor (uh that would be me heh heh heh) to pursue. There are those who are creative and visual but suck totally with just words, terms (me again) and an instructor who is monotone and boRRRRing. Delighted to know you’re one of those instructors who make your videos not only inspiring but fun to watch and easy to learn with colorful illustrations. I’m all for illustration and it’s why I got my degree. Well so much that did for me but that’s another story. Keep showing numbers for it is visually appealing. Especially to me. Not all gurus will do this and I’ve seen other that do but it’s sloppy and messy and defeats the purpose though the education was on point. When it comes to your portfolio (Not the Real Estate type), it must look clean, sharp, crisp and damn near flawless because this is the artist’s skill. You don’t want your to talent to be recognize as the artist who has smudgy and dirty work even though the image may still look so bad
A$$! I’ll be looking a this one over again.
Love the way you set up this deal. I would have never thought to do it that way. Thanks for the information!
Of course :-)
Nice need I training on terms.
recasting the loan at year 3 and adjusting for any principal payments......Can you make another video on how this interest rate adjustment after the first term ends works? Also why did you ask the lender for more than you needed instead of cash flowing more long term? Is it because of how good cash is to have right now? That is a risky position for a lender to have a 2nd that makes it above 90% of ARV and at only 6%. How long can you really do interest only on the PML?? Won't you eventually have to pay it in full or only when you sell it? The principal won't ever change on that, correct? Can you also make a video on how to get the PMLs to lend on something in 2nd position with such a high LTV?
So interesting, thank you!
Well-explained steps on a property options deal. Love the way you got to an infinite ROI using OPM - Other Peoples' Money. Great video.
Thanks for watching and sharing your thoughts :-)
@@EpicRealEstate, you're welcome.
The obstacle I have is structuring a deal like the one that got accepted😞 I'm thinking of sending a seller a letter of intent but I only know 2 option 1st obviously the all cash offer then & the 2nd seller carry monthly payments with a terms and by the 3rd I don't know any other. Wish I had someone like Matt to go to that would give me more confidence
How can I help?
@@EpicRealEstate let me visit to shadow you😓 or you can help me come up with a 3rd option to send a letter of intent to a seller. I want to become a pro on structuring terms
Great video with many details.
Thanks :-)
Brilliant!! 💪🏽
Thanks!
Do a formula for Illinois? The property taxes here are insane. $200,000 house averages $5-8k.
How would you structure?
I like this video example.
When I get another property in Illinois, I'll lay it out.
Property taxes in Illinois do require more aggressive price or terms, you're right.
@@EpicRealEstate Thanks my friend.
Seems like a lot of work for that cash flow. But awesome video! Gets my mind working. May I ask where you live? Do you live in the Birmingham area?
Might seem like little cash flow, but it cost me nothing to get it. Further, to generate that type of monthly cash flow inside the highest interest-paying money market account available right now, it equates to a balance of $166,909. Only have to 5 more of those to equal a bank balance of $1,000,000.
All a matter of perspective.
Thanks for watching and sharing your thoughts :-)
Matt, how & when is the principle part of the $26k private money interest only loan repaid?
J J It’s a balloon payment that coincided with the seller’s loan. I’ll flip a couple properties and pay it off early.
Epic Real Estate Investing Thanks Matt! I’m looking for a good private money source for instances such as this. The few I looked into wanted higher rates; Any ideas?
@@JHBH70 BUY A GOOD COURSE ON HOW TO RAISE PRIVATE MONEY
SO did the private lender receive a Mortgage?
Yes, she's in second position.
@@EpicRealEstate Thanks Matt Great Video By the way. Some good reminders.
i may have missed it but you said it's a down payment of 19K but then you say no money in the deal. Who is paying the down payment?
What kinds of deals are good deals?
Plz let me know
Deals that make you the money you want to make for the amount of work you want to do.
Instead of renting, why not sell to an end buyer on a wrap?
Because I don’t want to sell it :-)
Why was the 1200 multiplied by 60% in your dirty math?
I subtract 40% for taxes, insurance, maintenance, vacancy and property management. After it's under contract, I confirm the 40% is accurate and make adjustments if necessary.
For the third time how you increase the ROI to 29% the Math its Not working here.
Not sure what you mean for the third time, but with the six-month moratorium on payments, the ROI increases quickly... and it was a best-case scenario if I found a tenant right away. I have found one, but will miss the first payment, but I've got 5 payments coming to me with no debt payments due.
Sorry but folks will never be able to find a vendor who will wait 100 months for the rest of the money. Why would he? If he is selling at almost 10% below market value, he'll get a buyer pretty soon.
Bless your heart.
Epic Real Estate Investing
Lol. Perfect response. These deals are easy to find.
@@topcomment3816 Why would the vendor not just rent it out rather than wait EIGHT years for his money? Part of the rental income can be used to take out a short term loan.
Dipak Rajgor
Because with owner financing you get a check every month with no repairs, turnover, vacancy or headaches.