The unit mix consists of 36 one-bedroom units and 92 two-bedroom units.
Have a clear vision. Know exactly what you want. Whether you want to invest in commercial or residential properties, you need to know exactly what you want. Where do you see yourself in 10, 20 or 30 years from now? How much money you want to be earning? What area do you want to work, live, and invest in? What type of property do you feel comfortable with? Make specific, detailed plans on how to achieve your objectives, and follow them. Don’t let the temptation of a property here and a deal there divert you from your objectives. Once you make your decision, stick with it. Get to know the area, and the type of property very well, become an expert in that type of properties and market. After you have experienced success in a niche, you have a team in place, and your business is well structured, you can think of diversification. But be flexible enough to adjust according to your circumstances. A well-conceived plan is like a road map.
Whether you want to flip for quick cash, or hold for cash flow and appreciation, you must be focused. The more focused you are, the less you get frustrated, and the quicker you will make your millions. If you need immediate cash, you want to flip. Also, you want to flip when you find a great opportunity in a questionable area, or when the price of properties are expected to drop in the not-so-distant future. Good properties, in good locations, are ones you want to hold, for their cash flow and appreciation. The ideal is to hold some and flip some.
Our rule of thumb: for every $1 you spend you should expect to increase the value of the property by at least $2-$3. If this is not realistic, then you could spend your money more wisely elsewhere. The most profitable fixer-uppers are in good locations, and need only cosmetic work such as paint, landscaping, new light fixtures, or new carpeting. Avoid properties that need major repairs like a new roof, removal of walls, foundation repairs, or structural work. Once you gain enough experience and are comfortable working with contractors, however, you can explore adding rooms, bathrooms, second stories, and other property features as appropriate.
Interest rates have increased much faster than any of us could have predicted. Several lenders are out of business or merge with each other, and they are tightening their credit. Today is lander market not borrower. We have to wait until early 2024 to see commercial properties in most markets improving in all four pillars of investing: Value, rent, occupancies and net operating income.
First, you must be prepared and professional. Have a structured presentation, and do not come off as desperate. Remember to focus on the property more than you focus on yourself. If you give them a presentation that shows you have done the research and understand every aspect of the deal, you will gain their trust and, in turn, their money. If they decide not to invest with you, remember that there are plenty of other willing resources. Stay confident and your positive attitude could help persuade the next investors. Most people will invest not just in the deal, the property location, purchase price or even the high returns; first and foremost, they will invest in YOU.
Hard money loans are loans made by private investors who do not look at your FICO score or credit. They are only looking into the equity in the property, and your ability to pay back the loan.
A trust deed creates a secured lien on real property, which provides collateral for lenders and trust deed holders. Many projects which do not qualify for traditional loans may still be profitable. A trust deed provides a means of getting loans from hard money lenders, instead of banks.
It is wise to diversify. Invest in varying property types, property locations, loan-to-value ratios, and maturity dates. This limits the impact on you if one borrower does not pay back in a timely manner.
The difference is the priority of the lien based on the date the Trust Deed is recorded. The earlier recording date would have priority. If the Borrower fails to pay the First, and you have the Second, you would be responsible to make the First Trust Deed payments. If you don’t, you run the risk of being foreclosed out, and losing your invested capital.
To find more, call DCG at 310.471.0650 or email us at karim@dynamicscapital.com.
DCG is a one-stop resource for investors who want to create long-term wealth as well as short-term cash flow by leveraging today’s real estate opportunities.
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Karim@dynamicscapital.com
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