Don Green's Posts - Real Estate Finance2024-03-29T08:54:02ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreenhttps://storage.ning.com/topology/rest/1.0/file/get/69880121?profile=RESIZE_48X48&width=48&height=48&crop=1%3A1https://realestatefinance.ning.com/profiles/blog/feed?user=11e44psnuj1li&xn_auth=noA nickel's worth of free advice for fix and flipperstag:realestatefinance.ning.com,2014-10-02:6517464:BlogPost:1999352014-10-02T15:24:15.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p><em>This is primarily addressed to the newbie. I welcome further input from other experienced professionals.</em></p>
<p>It can be a great way to turn a quick profit- you buy a house at below-market value, you put some work into bringing it up to market value, you sell it, you put cash in your pocket. Simple, right?</p>
<p>Yes. Deceptively so.</p>
<p>Rehabbing and flipping SFR's can be very profitable, indeed. It can also be fraught with danger. So, here's a nickel's worth of free advice…</p>
<p><em>This is primarily addressed to the newbie. I welcome further input from other experienced professionals.</em></p>
<p>It can be a great way to turn a quick profit- you buy a house at below-market value, you put some work into bringing it up to market value, you sell it, you put cash in your pocket. Simple, right?</p>
<p>Yes. Deceptively so.</p>
<p>Rehabbing and flipping SFR's can be very profitable, indeed. It can also be fraught with danger. So, here's a nickel's worth of free advice from a former Realtor, long-time contractor, experienced fix-and-flip guy and current loan broker working within that niche:</p>
<p><strong>1. Remember the 2nd oldest rule in real estate: You don't make money when you sell, you make money when you buy.</strong> So when analyzing whether a property is a good opportunity, start with the ARV and work backwards to arrive at the purchase price.</p>
<p>Let's take a rough thumbnail as an example:</p>
<p>You figure the selling range (and it's ALWAYS a range, folks. Always.) is 175,000 to 200,000. You want to minimize your holding costs, so you decide to price it at 180,000 knowing that it will ultimately sell for 175,000. (Note: common mistake is to market the property at the TOP of the range, which not only eats up your profits in holding costs, but serves only to help sell the similar house down that street that has an asking price of 189,900)</p>
<p>So, ARV is $175,000</p>
<p>Rehab cost is $15,000</p>
<p>You estimate closing and holding costs to be 20,000</p>
<p>This means your <em>break even point</em> is a purchase price of $140,000. Different people have a different threshold for what type of return they're willing to accept, but personally I wouldn't go much over $90,000.</p>
<p>I see people make three mistakes when they buy a property:</p>
<p>A) Lack of patience. Don't be so anxious to make a deal that you make a bad one. If you have to make 50 offers to get one that fits your strategy, fine. Decide what you must have as a net profit from a deal and discipline yourself to stick to it.</p>
<p>B) Intimidation by real estate agents and sellers. I don't care what they tell you. I don't care if the walls are insulated to R-100. I don't care that the garage has 3-phase power. I don't care if it's got granite counter-tops. And I REALLY don't care if they're offended by my low offer (you'll be surprised how often a flat rejection of your offer will result in a call 2 months down the road to ask if you're interested in re-making a similar offer!) Never trust the listing agent or seller's opinion of ARV. Don't ever, ever, ever, ever be bullied into a purchase price that doesn't suit your investment needs.</p>
<p>C) Over-estimating the ARV of the property. Buy low, sell high is a good philosophy in the stock market. For quick turnaround of SFR's though, the rule is buy low, sell low.</p>
<p><strong>2. Beware the high rehab budget.</strong></p>
<p>This is an extremely common mistake, and I see it all the time. If the ARV is 175,000 and you've figured a rehab budget of 65,000 something is wrong. Either,</p>
<p>A) You're trying to make the house into something YOU want to live in. You must be brutally honest in figuring how much return you get for each dollar spent on repairs and upgrades. You simply do not add $10,000 to the value by spending $10,000 on granite counter-tops and high-priced flooring. If the market demands, for the price range you're in, that the home have granite tops then by all means put them in. But you must understand that only brings the property to our <em>original</em> ARV range of 175-200,000. It does not ever raise the value to $210,000!</p>
<p>B) You're looking at a money-pit. Paint. Carpet. Light fixtures. Light carpentry. A new roof, perhaps. Minor plumbing repairs. Minor electrical repairs and upgrades. Patching walls. Getting rid of of pet odors (cat urine smells like money to a rehabber) That's it.</p>
<p>If you're looking at a property that needs to be rewired, re-plumbed, gutted down to the studs, or has foundation or framing issues... be very, very cautious. Get qualified contractors to inspect it. It's all too easy to dig into structural issues or major repairs and find that there were hidden problems. Cost overruns will eat you alive.</p>
<p>Remember: The rehab budget is directly proportional to your risk.</p>
<p>3. Begin looking for buyers immediately. This gets easier after you've done a few, but depending on the condition of the property, go ahead and show it to prospective buyers. Share with them your list of repairs. Let them pick their own color of paint and carpet (within reason) if they'll make an offer with good earnest money. I'd suggest figuring a real estate agent's commission into the deal from the beginning. You may not like it, but selling property is what they do. (Well, the good ones anyway.)</p>
<p>Remember:</p>
<p>You can't get paid til there's a closing.</p>
<p>There can't be a closing til there's an offer.</p>
<p>There can't be an offer til there's a qualified buyer.</p>
<p>There can't be a qualified buyer til there's been showings.</p>
<p>Be smart, disciplined, patient and humble enough to learn and you, too can reap tremendous profits from real estate.</p>
<p></p>
<p></p>Fix & Flip Financing 100% of purchase and 100% of rehab costtag:realestatefinance.ning.com,2014-09-23:6517464:BlogPost:1987852014-09-23T14:32:38.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p>Yes, finally!</p>
<p>We are now able to offer financing for 100% of the purchase price as well as 100% of the rehab costs for your fix and flip acquisitions up to 65%ARV!</p>
<p>6-month or 12-month terms.</p>
<p>(Currently available in New York, Pennsylvania, New Jersey, Connecticut, Delaware, Maryland, Virginia, North Carolina and South Carolina.)</p>
<p>Please contact me by phone or email for details.</p>
<p>801-608-9606</p>
<p>dgreener66@gmail.com</p>
<p>Yes, finally!</p>
<p>We are now able to offer financing for 100% of the purchase price as well as 100% of the rehab costs for your fix and flip acquisitions up to 65%ARV!</p>
<p>6-month or 12-month terms.</p>
<p>(Currently available in New York, Pennsylvania, New Jersey, Connecticut, Delaware, Maryland, Virginia, North Carolina and South Carolina.)</p>
<p>Please contact me by phone or email for details.</p>
<p>801-608-9606</p>
<p>dgreener66@gmail.com</p>Does your business need working capital FAST?tag:realestatefinance.ning.com,2014-09-16:6517464:BlogPost:1978472014-09-16T14:45:55.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p>Description: This is a term loan that works similar to a line of credit. Applying is easy and you'll be notified of how much you qualify for right away. After that, you can use as much of or as little of the amount you're qualified for as you like. The difference between what you are approved for and your loan balance is available to you any time you need it.<br></br><br></br>Loan Amount: Loan amounts go up to $100,000 and the funds are made available immediately.<br></br>Rates: The cost of the loan is…</p>
<p>Description: This is a term loan that works similar to a line of credit. Applying is easy and you'll be notified of how much you qualify for right away. After that, you can use as much of or as little of the amount you're qualified for as you like. The difference between what you are approved for and your loan balance is available to you any time you need it.<br/><br/>Loan Amount: Loan amounts go up to $100,000 and the funds are made available immediately.<br/>Rates: The cost of the loan is between 1% and 13.5% of the loan amount for the first 2 months and then 1% for each of the remaining 4 months. There are no early payment fees. There are no gimmicks, hidden fees or up-front costs!<br/><br/>How to Apply: Call or email me for a simple 1 page application. Once this application is received your loan request will be submitted to the lender for approval. The lender will send you an e-mail with directions on how to complete your application online which will only take about three minutes. After completing your application online, you will immediately be notified how much you qualify for and the funds will be made available the same day.<br/><br/>801-608-9606</p>
<p>dgreener66@gmail.com</p>Throw the perfect home-run pitchtag:realestatefinance.ning.com,2014-09-16:6517464:BlogPost:1977472014-09-16T00:08:17.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p>I’m an investor.</p>
<p> </p>
<p>I don’t invest money. I invest time, effort and the value of my connections to funding sources.</p>
<p> </p>
<p>During a slow week I will see a dozen or more business plans, executive summaries and funding requests. And just like contestants on a reality show, very few will make it to the next round. Only the best will be presented to a lender, investor, venture capitalist or potential JV partner. (For the sake of simplicity I will simply say “lender” or…</p>
<p>I’m an investor.</p>
<p> </p>
<p>I don’t invest money. I invest time, effort and the value of my connections to funding sources.</p>
<p> </p>
<p>During a slow week I will see a dozen or more business plans, executive summaries and funding requests. And just like contestants on a reality show, very few will make it to the next round. Only the best will be presented to a lender, investor, venture capitalist or potential JV partner. (For the sake of simplicity I will simply say “lender” or “investor” interchangeably from here on. No matter if it’s debt or equity you seek, success and failure hinge on similar elements.)</p>
<p> </p>
<p>Most of you will first present your idea in writing. First impressions are important and neatness absolutely counts. If you’re weak in that area, get some help.</p>
<p> </p>
<p>Creating a solid presentation for your company isn’t rocket science, but to be very blunt, most of you get it wrong. What follows are some simple <b>do’s</b> and <b>don’ts</b>.</p>
<p> </p>
<p><b>Do: Watch the television show Shark Tank</b> (#SharkTankWeek). You’ll gain some valuable insight into the thought process of those who hold the purse strings. You’ll also see much of the nonsense they must endure. Try to mentally detach yourself from your company and pretend that it’s YOUR hard-earned dollars that are being asked for.</p>
<p> </p>
<p>You’ll see good companies and ideas that don’t get funded. You’ll also see seemingly wacky ideas that meet with success. Those who don’t make a deal, fail for two reasons:</p>
<ol start="1">
<li>Good product, bad strategy.</li>
</ol>
<p>These entrepreneurs will invariably hear excellent advice on how to alter their approach. The voice of experience seems to fall on deaf ears and the principals walk away, apparently unaware of how close they were to success. Persistence is a virtue; stubbornness is not.</p>
<ol start="2">
<li>The entrepreneur overvalues his company.</li>
</ol>
<p>I frequently participate in conference calls with a seasoned lender/investor and my clients. One of his standard questions is, “What are you willing to give up?”</p>
<p> </p>
<p>I know from my dealings with this investor that he isn’t out to gouge or steal from anyone. But he doesn’t invest for philanthropic purposes either; he seeks a reasonable return which must be balanced against risk. An investor’s valuation of your product may be a painful reality check. I’m not advising you to sacrifice more than you need to or even to accept the first offer you get. I’m simply pointing out that a wise investor is typically more objective than you.</p>
<p> </p>
<p>We realize that you’ve poured blood, sweat and tears into your business, and your passion is important. But an investor must be, to a certain extent, <i>dis</i>passionate. The investor is going to pour in neither blood nor sweat and had better not pour in tears. What the investor pours in is cash. If you’re going to obtain cold hard cash, be prepared for cold hard reality.</p>
<p> </p>
<p> </p>
<p><b>Do: K.I.S.S.</b></p>
<p>“Keep it super simple” or “Keep it simple, stupid” may be the oldest axiom in business. It may also be the one most often ignored.</p>
<p> </p>
<p>I recently received a funding request for what should have been a straightforward commercial real estate deal and some working capital. Yet, the business plan and executive summary labored on for 17 pages! Since I knew the guy, I waded through it anyway and determined it might have legs. I emailed it to one of my primary sources and immediately got him on the phone because I knew what his initial reaction would be: exasperation. There was some meat on the bone, but there were just too many bones!</p>
<p> </p>
<p>Most lenders would open a document like that and either grumble or chuckle as they shuffled it to the bottom of the priority list.</p>
<p> </p>
<p>Make the key pieces of information easy to find and digest.</p>
<p> </p>
<p>Let me say this again: Make the key information easy to find and digest!</p>
<p> </p>
<p>(There is a “Don’t” here as well: Don’t believe the old saw that if you can’t dazzle them with brilliance, then baffle them with b.s. An investor’s stock-in-trade involves a finely tunes b.s. detector. Feel free to dazzle them with brilliance.)</p>
<p><b> </b></p>
<p><b>Do: Set your goals in concrete, and write your plans in sand.</b></p>
<p>The concept of “pivoting” has received a lot of attention lately and for good reason. Any young or start-up company needs to be agile, adaptive and responsive to feedback.</p>
<p> </p>
<p>Think of it in the terms of how you operate a car: Assume a straight road with a fixed point at the end. That’s your target. Point the car in that precise direction. Press on the accelerator. And then hold the steering wheel <i>perfectly still</i>. I dare you to try it. I’ll bet you can’t. Because to do so requires not only ignoring your self preservation instinct, but also ignoring the constant feedback you get from the steering wheel. You know as well as I do that if you don’t make constant adjustments with the wheel, you will crash.</p>
<p> </p>
<p>When someone sends me their business plan or executive summary, one of the first things I do is look for a date. I want to know how long they’ve been looking for funding.</p>
<p> </p>
<p>If you’ve taken your proposal to lender after investor with and gotten the same response, it’s time to stop lamenting and complaining about lenders. Rather, it’s time to change your approach. These changes could include refining your sales strategy or simply taking a smaller swing of the bat.</p>
<p> </p>
<p>If you’re consistently getting the same feedback, then listen and respond proactively. That will lead you to success.</p>
<p> </p>
<p>Don’t: Get off-topic.</p>
<p>Please don’t include in your executive summary things such as: your past business failures and that you were a victim. We feel for you. We love you and wish you all the best. Victim-mentality does not attract funding. Sorry. Don’t include in your executive summary or presentation long narratives about your wife dying of cancer (seen that more that once believe it or not). Again, we’re sorry you had to deal with that, in fact I can’t imagine your grief. But it does nothing to get you the capital you need to move forward.</p>
<p> </p>
<p>In fact, the phrase “move forward” is the key. It’s not ultimately up to me, lenders OR investors for you to move forward. It’s up to you. If there’s due diligence yet to perform, do it. If you need to increase sales on a shoestring budget before your company can truly claim its slice of the investment pie, then stuff envelopes and hit the streets! No one will lend or invest out of sympathy.</p>
<p> </p>
<p>When you’re truly ready – and I mean truly ready – to take your company to the next level, you will have investors competing to participate.</p>
<p> </p>
<p> <a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/85069323?profile=original"><img class="align-full" src="http://storage.ning.com/topology/rest/1.0/file/get/85069323?profile=original" width="750"/></a></p>The Boy Scouts had it right: BE PREPAREDtag:realestatefinance.ning.com,2014-09-04:6517464:BlogPost:1967082014-09-04T16:01:02.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p>I talk with fix & flip professionals, business owners and real estate investors every day. They all have goals that require funding of some sort. It is very infrequent for them to come to me with their ducks already in a row. That's fine; I can work with them to get them there, but I'm often surprised that <em>they're</em> surprised at what will be needed to fund their deal.</p>
<p>So, in the interest of a more educated and successful borrower, here's what's up:</p>
<p><strong>Understand…</strong></p>
<p>I talk with fix & flip professionals, business owners and real estate investors every day. They all have goals that require funding of some sort. It is very infrequent for them to come to me with their ducks already in a row. That's fine; I can work with them to get them there, but I'm often surprised that <em>they're</em> surprised at what will be needed to fund their deal.</p>
<p>So, in the interest of a more educated and successful borrower, here's what's up:</p>
<p><strong>Understand the difference between "guidelines" and "requirements".</strong></p>
<p>Guidelines vary. Requirements do not. Let me explain:</p>
<p>Guidelines include things such as LTV, interest rates, points, the type of collateral the lender will accept, the relative importance of your credit score, income, etc. SBA guidelines are very different than hard money guidelines.</p>
<p>Requirements are the various pieces of information that comprise a complete loan package. Some excellent information is available <a href="http://www.sba.gov/tools/sba-learning-center" target="_blank">here</a>, but what follows is a description of what you will need to provide ANY lender on ANY real estate transaction:</p>
<ol>
<li><strong>Executive Summary -</strong> This should include a brief description of what you're trying to accomplish (what will the funds be used for and how will that move your business forward). It should also include some information about your background and experience; this tells the lender that you are capable of using their money to make a profit.</li>
<li><strong>Personal Financial Statement -</strong> This is the item people struggle and hesitate with, but it has to be done. The lender will absolutely need to have a clear picture of your financial standing. Include a list of ALL assets such as life insurance, bank accounts, retirement plans and details about property you currently own, even if it's only your personal residence. Your net worth is a factor every time! (Remember, different <em>guidelines</em> will place different importance on that, but the lender must still know where you're at financially. It's a basic.)</li>
<li><strong>Credit- </strong> Go to creditera.com or creditchecktotal.com or whatever credit-reporting site you prefer. Find out. Get real. Whatever it is, it is. Once again, guidelines will vary greatly but every lender will expect to have that question answered. True, some loan programs will say "no credit check required". Those are few and typically expensive, but even those lenders will want to know what the score is - they're just not going to insist on verifying it. That last statement applies also to "stated-income" or "no income verification" products. Even in that case you have to state it, you see.</li>
<li><strong>Property -</strong> This one is the easiest for most of you, because it's what you're focused on. Know the current value, the after repair value (ARV) and have a detailed repair/rehab budget, if applicable. If it's a cash-flowing property, you'll need to provide details on the leases. Have a basic cash flow summary that shows gross scheduled rents (GSI), net operating income (NOI) and operating expenses. It's also a good idea to show a cap rate and the debt service coverage ratio (DSCR).</li>
<li><strong>Exit Strategy</strong> - Provide a brief explanation of how you will pay the loan back. Buy and flip? Buy and hold? Two or three sentences is usually enough and essentially summarizes why the lender should give you the money.</li>
</ol>
<p>Additional supporting documents such as tax returns or bank statements may be required (again, depending on guidelines). Ask your lender what will be required based on the program you're applying for and get to work on putting them together. This will save both time and frustration for you and the lender.</p>
<p>Be a good real estate scout. Be prepared. If you need help or advice on how to package something, just ask! Most good lenders welcome it - after all, it's in their best interest as well as yours!</p>
<p>As always, if you need funding - or just have questions, feel free to reach out to me.</p>
<p>Don Green</p>
<p>801-608-9606</p>
<p>dgreener66@gmail.com</p>On Sales, Service and Leadershiptag:realestatefinance.ning.com,2014-08-20:6517464:BlogPost:1943612014-08-20T19:36:22.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p style="margin-bottom: 0in;">One of my all-time favorite books is “The Greatest Salesman in the World” by Og Mandino. (If you haven’t read it, stop reading this post right now and run out and get a copy. Actually, buy every Og Mandino book you can get your hands on. No, I don’t get a cut!)</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">The book is particularly valuable, because it has little to do, really, with “Sales” as a profession. Rather, it’s a primer on how to…</p>
<p style="margin-bottom: 0in;">One of my all-time favorite books is “The Greatest Salesman in the World” by Og Mandino. (If you haven’t read it, stop reading this post right now and run out and get a copy. Actually, buy every Og Mandino book you can get your hands on. No, I don’t get a cut!)</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">The book is particularly valuable, because it has little to do, really, with “Sales” as a profession. Rather, it’s a primer on how to conduct oneself in both business and personal environments and centers on the concept of being first an agent of change within oneself. I read it when I was a budding salesperson in the late 1980’s (can it really have been that long?) and it has served as the starting point for a personal and professional philosophy that has been in development ever since.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">A portion of that philosophy is what I call “Be, Do, Have” – a way of thinking and acting that revolutionized my life and career. I believe that most of us get those three elements in the wrong order and we go with “Do, Have, Be.”</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">For example, someone will say to themselves, “If I DO such-and-such (overtime, sales volume, multiple jobs…), then I’ll HAVE (money, success, a boat…) and then I’ll BE successful/happy/at peace.”</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Do you know any unhappy people with boats? Me too.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Focusing first on the “be” portion means getting our internal priorities straight. It answers for us questions that deal with purpose and meaning. When we have purpose and meaning straight, the “do” portion is virtually automatic; we will fulfill that purpose as naturally as an apple tree bears fruit. Finally, when our actions are in concert with our purpose and meaning, the “have” part follows just as naturally. We’ll then have whatever it is that truly provides us with success, happiness, peace and abundance.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">The boat, you see, is merely a symbol, as are money, titles, possessions (including real estate!) and so on. Don’t misunderstand- I like money. I earn it. I use it. I also like boats and certainly intend to have one soon. But as Deepak Chopra has said, “Settling for symbols is like settling for the map instead of the territory.”</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">So what does that have to do with sales, service and leadership? I’m glad you asked!</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">I was brought on board with America’s Funding Partners largely on the strength of my “sales” ability, but I find that in reality I don’t do much “selling”. I do reach out to new contacts and look for opportunities to present my solutions with an eye toward closing business. I do market myself and my company. I do engage in conversations about why someone should do business with me/us. But as every professional lender/broker/investor/financier/business owner knows knows, selling is mostly about asking questions. If the responses you’re getting from prospects are flat-line, you simply haven’t asked enough of the right questions. We’ve all experience the salesman who never learned that “telling isn’t selling.” You can't shut them up. They know their product inside and out.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">And you don't buy. Because they don't care.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">I was blessed with parents who taught me to ask “Why?” a lot.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Selling isn’t telling?</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Why?</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Again, glad you asked. This is where service and leadership come in. These concepts are so central that someone much wiser than me coined the term “servant leadership.”</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">I spoke with a gentleman recently who has been operating a baby products business for a couple of years. He has significant opportunity to increase his sales but needs working capital to increase production in order to meet his growing demand. He’s a brilliant man with a great product that I predict will become a well-known brand in a very short time. He knows his product. He knows his audience. He knows how to bring it to market. He also knows that people don't buy his product, they buy what the product will do for his customers.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">What he doesn’t know is how to present all of this to a lender. He needs someone who will go to work for him (service) and someone who can also give him instructions regarding what to do next (leadership).</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">My definition of “leader” is quite simple: A leader is someone who has followers. I don’t care if you’re the CEO of a Fortune 500, if nobody’s following, you ain’t leading. Typically – at least in our society – people CHOOSE to follow and they make that choice based on whether the would-be leader will work towards SERVING their needs, goals or ambitions.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">I don’t care what your product is, leadership is your business and service is the vehicle that delivers it. Your client needs your leadership. They need for you to guide and instruct them. They frankly need you to tell them what to do. They need to know that what you’re telling them is, in fact, in their best interest.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">A local gentleman was recently acquitted of fraud charges. He had been accused of defrauding investors of millions of dollars. The justice system found that he hadn't done anything “criminal”. Nonetheless, his case revealed two simple truths:</p>
<ol>
<li><p style="margin-bottom: 0in;">He had certainly been a “leader” - people followed him and his advice.</p>
</li>
<li><p style="margin-bottom: 0in;">He certainly had NOT “served” anyone but himself.</p>
</li>
</ol>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">The net result for him? Scandal. Bankruptcy. Loss of trust. Limited future prospects.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Wouldn't it have been easier and ultimately more profitable for him to do good business? To develop a model that included servant leadership into his sales endeavors?</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">What are you focused on? Yourself? What you can get?</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Nonsense. I guess the thesis statement for this should have been, “You'll profit more by calculating what you can give than what you can get.”</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">It may seem a bit touchy-feely for some of you hardcore finance and investor types. If it does, read two Og Mandino books and call me in the morning.</p>A Unique Financing Option for Real Estate Investorstag:realestatefinance.ning.com,2014-08-13:6517464:BlogPost:1933022014-08-13T21:00:00.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<div><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">I'd like to announce an exciting new blanket loan product that allows investors who currently own a portfolio of rental properties to unlock their equity, get out from under hard money and ultimately expand their portfolio. This is a </span><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">cutting edge product that's generating a lot of excitement from real estate professionals. With…</span></div>
<div><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">I'd like to announce an exciting new blanket loan product that allows investors who currently own a portfolio of rental properties to unlock their equity, get out from under hard money and ultimately expand their portfolio. This is a </span><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">cutting edge product that's generating a lot of excitement from real estate professionals. With this product, borrower's can:</span></div>
<ul>
<li><div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Have one loan for all their properties at a low rate on a 30 year amortization.</span></div>
</li>
<li><div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Cash out at up to 75% LTV to renovate existing properties or use to expand their portfolios.</span></div>
</li>
</ul>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Basic Guidelines:</span></div>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 0px;"> </div>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Portfolio must comprise of 5 or more residential rental units at a time. These rental properties consist of single family homes, condos, townhouses, 2-4 unit multifamily, apartment buildings and mixed use with up to 40% commercial or any combination of the above. </span></div>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 0px;"> </div>
<ul style="list-style-type: disc; margin: 0px; padding: 0px;">
<li style="font-size: 11pt; font-family: Calibri,sans-serif; padding-left: 0.07in; margin: 0px 0px 0px 0.42in;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Loan sizes start at $500,000 and range up to $50 million.</span></li>
<li style="font-size: 11pt; font-family: Calibri,sans-serif; padding-left: 0.07in; margin: 0px 0px 0px 0.42in;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">5 and 10 year loan terms with 30 year amortization (preserving your cash flow).</span></li>
<li style="font-size: 11pt; font-family: Calibri,sans-serif; padding-left: 0.07in; margin: 0px 0px 0px 0.42in;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Interest rates in the 5-6% range. </span></li>
<li style="font-size: 11pt; font-family: Calibri,sans-serif; padding-left: 0.07in; margin: 0px 0px 0px 0.42in;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">LTV’s up to 75% as long as the loan size meets a minimum DSCR of 1.20x.</span></li>
<li style="font-size: 11pt; font-family: Calibri,sans-serif; padding-left: 0.07in; margin: 0px 0px 0px 0.42in;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">The typical turn time from a signed Term Sheet with expense deposit to closing is 45 days.</span></li>
<li style="font-size: 11pt; font-family: Calibri,sans-serif; padding-left: 0.07in; margin: 0px 0px 12px 0.42in;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Brokers can charge 1 point origination and earn 1 point in YSP (meaning that pricing is very, very competitive.)</span></li>
</ul>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 12px 0px 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">For more information feel free to reach out to me at the number below.</span></div>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 12px 0px 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">Don Green</span></div>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 12px 0px 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">801-566-0495</span></div>
<div style="font-size: 11pt; font-family: Calibri,sans-serif; margin: 12px 0px 0px;"><span style="font-size: 10pt; font-family: Verdana,sans-serif; color: black;">dgreener66@gmail.com</span></div>Hi, My Name is Don and I’m a Broker…tag:realestatefinance.ning.com,2014-08-13:6517464:BlogPost:1927252014-08-13T00:55:32.000ZDon Greenhttps://realestatefinance.ning.com/profile/DonGreen
<p style="margin-bottom: 0in;">I really appreciated Admin’s recent post about people pretending to be what they’re not. “If you’re a broker, say you’re a broker!” I believe he said. I agree, but at same time my thought was: “Um, I’m proud to call myself a broker,” and I’ll tell you why:</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;"><b>Direct vs Indirect (Broker)</b></p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Part of the confusion comes from…</p>
<p style="margin-bottom: 0in;">I really appreciated Admin’s recent post about people pretending to be what they’re not. “If you’re a broker, say you’re a broker!” I believe he said. I agree, but at same time my thought was: “Um, I’m proud to call myself a broker,” and I’ll tell you why:</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;"><b>Direct vs Indirect (Broker)</b></p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Part of the confusion comes from these two terms and what they mean. For some reason that has led to a belief that perhaps one is “better” than the other, when nothing could be further from the truth, they simply occupy different roles.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Reputable direct lenders do what they do very well. They have excellent financial products that help capitalize many good enterprises. Someone working at the “business-getting” level of a direct lender- i.e., the folks posting on this site- will, in their travels, encounter businesses they CAN’T fund, for whatever reason. A smart lender in this case, would of course have a resource to refer that client to- that’s basic networking. But for the direct lender, that’s pretty much the end of it, correct? (I’m going to gain the ire of many a direct lender- that’s ok, I realize I’m oversimplifying and I welcome a rebuttal by any good direct lender who wishes to take issue. It's ok, this town is big enough for the both of us.My point, ultimately is this:)</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">What does a broker do?</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Simple:</p>
<ol>
<li><p style="margin-bottom: 0in;">A good broker provides many legitimate resources for funding good projects and enterprises.</p>
</li>
<li><p style="margin-bottom: 0in;">A good broker works to increase your chances of successfully funding your project or enterprise.</p>
</li>
</ol>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">The second part is key. I'll explain:</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;"><b>What Every Lender/Investor Wished the Client Knew</b></p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">You’re competing for their money. Period.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">When you develop an idea and submit it to the funding arena, there are more deals than yours on their desk. This is as true for the direct lender as for anyone else. Many funding requests happen, many get turned down.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">So-</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">As a broker, I often find myself in the role of helping a client to understand what the missing pieces are in that case. Frequently I find that their business plan needs refinement to attract legitimate interest. Or perhaps their approach needs to be restructured so that their plan can be funded in stages. Sometimes a good broker will help the client prepare a strategy to increase his credit-worthiness and ability to acquire income-producing assets in the future.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">A good broker may wear many hats to help a business reach it’s goals.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">A good “Commercial Finance Consultant” - which I guess is my official title- will not only have resources for legitimate, competitively priced funding options, but will ALSO know how to roll up his sleeves and go to work.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">The <i>borrower</i> should understand that a good broker may put them to work as well. Which is also ok – it's YOUR business you want funded, right? Part of a small business owners responsibility is to do the work to put himself in a position to succeed.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">But at the same time, a good Commercial Finance Consultant (since I've rolled out the term) will help you with that.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">I'm working with a gentleman who is looking to fund what could be some profitable real estate deals. He has many of the pieces in place, but not all. I think he'll get there. But his executive summary is terrible! So, what do you do – because let's be very, very real here- the executive summary is analogous to a resume for a job. You're applying for the position of “Spender of Your Money, Mr. Lender.” It's a basic step. Presentation matters. Yes, neatness counts.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">So, I'll clean up his Executive Summary, he'll work on his part and we'll likely do business together.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">It's fun to do.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Lastly,</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;"><b>Watch out for “brokers” who:</b></p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">This is my advice:</p>
<ol>
<li><p style="margin-bottom: 0in;">Steer clear of ANYONE who asks upfront fees to process your funding request. While their may be some legitimate out-of-pocket costs for things like appraisals or credit reports, I’m not aware of a legitimate lender/investor who will ask for money in their pocket in order to go to work for you.</p>
</li>
</ol>
<p style="margin-left: 0.5in; margin-bottom: 0in;"></p>
<p style="margin-left: 0.5in; margin-bottom: 0in;">Ultimately, a “good broker” gets paid for one thing, and one thing only: Successfully funding deals.</p>
<p style="margin-left: 0.5in; margin-bottom: 0in;"></p>
<ol start="2">
<li><p style="margin-bottom: 0in;">Carefully assess the costs of any loan offer and don’t allow yourself to be pressured into signing something or agreeing to something that doesn’t make business sense. This is not to say that a relatively high-cost product isn’t appropriate- every case is different. I’m simply advising buyers to be wise and aware. If the capital and its cost will make you more money, then by all means, go forward. But if you get to the closing table and it’s not right? Walk away.</p>
</li>
</ol>
<p style="margin-left: 0.5in; margin-bottom: 0in;"></p>
<p style="margin-left: 0.5in; margin-bottom: 0in;">Our policy is: If it makes business sense to the client then we’d expect to move forward. And if it doesn’t, then why in the world would we ask them to?</p>
<p style="margin-left: 0.5in; margin-bottom: 0in;"></p>
<div style="margin-left: 4em"><ol start="3">
<li><p style="margin-bottom: 0in;">Avoid any “lender” who responds to your funding request like this:</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Example: Someone posts something like –</p>
<p style="margin-bottom: 0in;">“Need funding for X number of Y type of property/project/whatever...”</p>
</li>
</ol>
</div>
<p style="margin-bottom: 0in;">Then follow multiple comments that have no relation whatsoever to the funding request posted! If this site is to succeed, then the people who participate as funding sources – direct, broker or whatever – have a responsibility to do the work, indeed the due diligence, to do good business. If someone isn't willing to at LEAST do the research to review the request, assess if it might be a good fit, learn about the borrow, get a phone number... What effort will they likely put into your project? They make a blind response to a request they haven't read? Unhelpful responses don't do anybody any good. Please stop, those of you who are doing that. The SFR buyer doesn't really care about your fresh cut BG's. It's almost to the point of content spam with some.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">This site can and will be the standard for where good business people go to find good business funding. But it's going to depend, in large measure, on the quality of funding sources available from those of us on the finance side. Let's put an end to the debate. Let's all do what we all do best and refer the rest.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">Network. Serve the client. Do it.</p>
<p style="margin-bottom: 0in;"></p>
<p style="margin-bottom: 0in;">I’m Don Green, and I’m a “broker.”</p>