Yes. 500 loans in 10 years so average 50 loans a year. That's substantial capital needed to fund 50 loans at large enough amounts in order to generate sufficient retirement income annually, and 12% interest certainly helps.
Retail Investors Badly Trailing the S&P 500
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Yes. 500 loans in 10 years so average 50 loans a year. That's substantial capital needed to fund 50 loans at large enough amounts in order to generate sufficient retirement income annually, and 12% interest certainly helps.
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Pretty much "set and forget" (oh, and rebalance occasionally.)
HaveEnough
Dryer sheet aficionado
Yes, I do hard money or private lending.
I do not use a platform for the deals. Most are private relationships developed over a few years by networking at local real estate investor meetings.
Sometimes I require an appraisal or inspection report, usually I inspect personally. My father was a commercial electrician, we rehabbed a couple of houses together so as the song goes .... "I know a little".
Some of the local competition, actually colleagues, raise money from others for their liquidity. They will give their investors 8-10% while keeping the points and a couple percent a month. They have advertising, assistants, offices, memberships to all kinds of associations to run their business. My lending is smaller, just me and almost no expenses. So, yes, it is capital intense with the number of loans I do. However, it depends on your needs and wants, $500K can generate $5000 - $6000 a month including points when keeping the funds fully working. Is that enough retirement income? (rhetorical) My portfolio is a little larger.
HaveEnough
I do not use a platform for the deals. Most are private relationships developed over a few years by networking at local real estate investor meetings.
Sometimes I require an appraisal or inspection report, usually I inspect personally. My father was a commercial electrician, we rehabbed a couple of houses together so as the song goes .... "I know a little".
Some of the local competition, actually colleagues, raise money from others for their liquidity. They will give their investors 8-10% while keeping the points and a couple percent a month. They have advertising, assistants, offices, memberships to all kinds of associations to run their business. My lending is smaller, just me and almost no expenses. So, yes, it is capital intense with the number of loans I do. However, it depends on your needs and wants, $500K can generate $5000 - $6000 a month including points when keeping the funds fully working. Is that enough retirement income? (rhetorical) My portfolio is a little larger.
HaveEnough
Markola
Thinks s/he gets paid by the post
It’s interesting that the fix and flip market is holding strong for you during a higher interest rate environment. I figured that was more of a low rates market phenomenon.
If you’re willing to share, how many deal opportunities come your way vs. how many do you accept? Or maybe you can just deal with people who know what they are doing at this point.
If you’re willing to share, how many deal opportunities come your way vs. how many do you accept? Or maybe you can just deal with people who know what they are doing at this point.
HaveEnough
Dryer sheet aficionado
That is counter intuitive, I know. The delta between my (high) rates and the bank has become smaller. With investor rental loans pushing 8%, 12% does not sound as bad for a higher risk fix and flip loan. What is changing for me is the cost of the properties going up, While I have the same amount deployed, it is fewer properties now and when the properties get expensive, the holding costs increase making it more difficult for the flipper to find deals needing larger margin.
I have a mix of old and new business. Most of the old business I can accept, they are seasoned and will find as much or more of the issues that I find. AND, more importantly, if there are unforeseen problems, it is part of the biz. The newbs are more risk, but I do take them as clients if they have a good deal, I walk them through the process, have lawyers, realtors, and other contacts I can recommend for them. I turn down probably 20%. People come in and out of the business, sometimes it is a couple years between deals.
Hope that helps
It's always fun and educational to learn about other people's successful investment strategy. Thanks for sharing!
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yeah, as long as I don't let the little green monster of envy slip into my thinking. Down, boy!
Markola
Thinks s/he gets paid by the post
+1. Thanks for the peak into your interesting business. Real estate books sometimes mention that there are investors who provide financing for deals but I’ve never encountered one before.
