Real Estate Mentorship | Boston AREIA

What is a Hard money loan?

April 25, 2014 by bostonareia Leave a Comment

Hard money loans are used daily to fund real estate projects and are typically focused on the value and after repaired value (ARV) of the property instead of focusing on the borrower’s ability to pay back the loan. It is a real estate backed loan. You would use hard money in instances where you can’t get traditional financing because your debt load is too high or the property won’t qualify because of the work that needs to be done to make it liveable. Hard money is typically short term, usually the estimated amount of time it’s going to take to complete and resell the project. Depending on the project and the lender you are working with, this may include the cost of the rehab. And, typically a hard money lender will want you to bring money to the table so that you have “skin in the game”.

Hard money loans got their name because they are typically higher risk and the payback percentage and points associated with the loan are higher than traditional loans. You maybe looking at 2-5 or more points depending on the deal and 12-15 percent. Now don’t freak out. It sounds like a lot, but, if it allows you to do a project where you can earn $30k or more after all fees and such are paid, in a short period of time, it’s worth it. Just, remember, the property is the collateral and just like a traditional lender can foreclose, so can your hard money lender. But, trust me, they don’t want to foreclose and they don’t really want the property, they want the money and interest to put into more deals so that their money is consistently cycling through deals and making more money. It is expensive though, so if you can find private money through family, friends and networking connections, go that route first.

Be sure to “dig your well” before you are thirsty. Let friends and family know what you are doing. Let them know that you are working with a team of experts (at Boston AREIA, of course) who guide you through deals. The folks that are interested in “getting in on that” will let you know. Just don’t be shy about what you are doing. And, when you hear success stories about someone flipping a property or flipping a wholesale contract, let them know. You can even invite them to come with you to Boston AREIA so they can meet seasoned investors and can become more comfortable. They can also meet folks like Kevin Collins of Advanta IRA who can explain how they can invest through their IRA.

There will be times that you will need hard money to get your deals done. That’s ok. Your goal is to develop long term relationships with a few lenders. The longer the relationship and the more deals you do, typically the less it will cost you to borrow the money for your deals over time. Hard money lenders appreciate those long term relationships that offer repeat business just as much as you appreciate knowing how you will get your deals funded. When looking for a lender, please contact me! I work with a few trusted sources in the Boston area that I’ve known for quite a few years. I can make a connection for you. Typically they appreciate it more if you are bringing a possible deal to the table, but, it’s not absolutely necessary. These folks can also be used as a fail safe if you will. For example, you’ve got the property under contract, with a few contingencies so that you can get out of the deal (that’s another topic) if need be. You aren’t sure that you ran your numbers right and you are nervous. That’s ok, these folks will analyze the deal and they will let you know if you are on track. If it’s a deal, they will lend. If it’s not a deal, they will let you know and won’t lend. I have one who has been known to restructure deals so they do make sense for both the borrower and his company.

As always, if you have questions, feel free to reach out to me! I’m here to help!

Yours in success!

Bernadette Trafton, Boston AREIA Chief Connector

Thur 4/17 was a ROCKIN' meeting about funding!

April 19, 2014 by bostonareia Leave a Comment

Thursday’s meeting was absolutely ROCKIN’! Standing Room Only!

These are just some of the comments we got:

Anya wrote, “A can-do approach to real estate investing!”

Ann wrote, “There was a lot of great information!”

Karen Lee wrote, “This was my first meeting with BostonAreia and it was full of invaluable info on raising capital. I initially went to get more info on the IRA funding for real estate but left with a bunch of new ideas. Many thanks to Bernadette for arranging this meet up. I’ll be back.”

Kathryn Acciari wrote, “Good morning Bernadette,It took me a few years, but I finally made it to a meeting and I am very happy to have done so. Last night was quite informative, and I am excited to be looking at next steps. What a friendly and professional group of people you have at BostonAREIA. I hope to be a regular attendee at the meetings and to also be able to provide folks with some connections and leads in Worcester County. There are deals out here. Thank you!”

First, I want to thank the members that took the time to walk up to me to thank me for such a great meeting and thank you to those who took the time to send a quick note! I love the members of Boston AREIA!!! Kathryn is absolutely right about what a friendly and professional group of people we have.

A quick recap…So, we started our 5pm coaching session which focused on building and developing your connections through networking. I hope that everyone got a lot out of it and if you are a member of Boston AREIA and you want a copy of the powerpoint, make sure that you contact me at dette101@gmail.com. Remember folks, it’s important to contact the people you met at the meeting no later than Tue and plan to get together for coffee.

We began the meeting and of course, everyone knows that ENERGY IS EVERYTHING! The energy you put into something is what you will get out of it. So, first 5 lucky investors had their business cards pulled out of the proverbial hat and were given the opportunity to stand up and promote themselves to the group. We followed this with forced networking…which gave folks the opportunity to exchange business cards fast and furious with rehabbers, wholesalers, investor savvy Realtors and more…I think that section is a favorite among our investors!

We followed the networking section with Dickens Pierre-Louis putting together a market update…we actually sped through this section because we had so much jam packed into the meeting…I will be posting this soon. Thank you soooo much Dickens! Our mentee, Mike Fitzpatrick got up and talked about how he and Jacqui are progressing and asked if folks could please vote on their logo – check out the blog post! Then, Peg Graveline and Lisa West of JEM Property Group and Dan McKenna of Mckenna Family Homes walked through the numbers of the Walpole deal! They made it real and dispelled some of those beliefs people get from the flipping houses shows on tv. After that, we introduced our phenomenal panel of funding experts. Peter McLoughlin talked about hard money, how it’s used, what a lender will expect from the borrower, one of the hottest topics based on questions asked by the group, was Investing through your IRA with Kevin Collins of Advanta IRA, then Ric Beaudoin of Sage Bank went over traditional lending, Kim Harrington covered how to develop your funding partners and Peg Graveline covered JVing with other investors to get your deals done. What a great night! I have to tell you, I had more people walk up to me at the end of the meeting to tell me how much they appreciated the programming and the speakers! Thank you so much to Peter, Kevin, Ric, Kim and Peg!

Next month, we are doing a special coaching session from 5pm – 5:30pm for members. Ric Beaudoin is going to come back and he’s going to go over becoming credit worthy for those with credit problems and maximizing your credit score with those who don’t have issues, but would love tips to get your score as high as possible. After that, it’s all about exit strategies….so, the contract is signed, NOW WHAT?

See you next month! And, remember, if you need something or if I can help with anything between meetings, feel free to reach out to me. Happy Investing!

Yours in success,

Bernadette Trafton, Boston AREIA Chief Connector

Boston AREIA Diary of a Newbie Real Estate Investor

March 31, 2014 by bostonareia 1 Comment

Diary of a Newbie Real Estate Investor

with Mike Fitzpatrick and Jacqui Pietrzak

Since our last post Jacqui and I have been working closely with Peg and Bernadette to put together a plan for accomplishing our $50k profit rehab goal. Our focus right now is finding a property to buy. Recently we have been spending our time driving for dollars and meeting with local realtors to explain our goals.

If you have never tried driving for dollars, I think it’s fair to say your first time is going to feel awkward. It is hard to look normal when you are circling a neighborhood, slowing traffic and wondering if you look like kidnappers. Essentially our plan was to pull up to a distressed looking property, run out with our “we want to buy your house” flyer, wedge it in the door, then run back to the car as quickly as possible and drive off avoiding any human contact.

Realizing it is less creepy if we actually get out and speak to people, our second attempt went much better. Now that the weather is getting nice, something we are more comfortable with is “running for dollars”. We take our dog with us on the run as this makes us feel more “normal” and offsets the fact that we have a pocket full of flyers and a notepad to write down addresses. People are willing to give you more information when you look like another neighbor walking around.

Time will tell if we end up with any leads, but it certainly was a good way to become more familiar with the neighborhoods in our area. Through some of these conversations we learned about other houses that were already being rehabbed. At first the thought of another rehabber in my target neighborhood was a bummer to us because we felt someone else beat us to the deal. But we are currently trying to get in touch with these other investors so we can learn from them and see if we could work together in the future.

We have also started setting up meetings with brokers in the metro-west area that are interested in working with us to find rehab and multi-family buy and hold deals. Anything within a 20-30 minute radius of Framingham is what we are looking at. If you are interested in working with us please drop us a message at mike@fitzproperty.com or jacqui@fitzproperty.com and we can set up some time to talk.

In the next couple weeks we are planning on launching our company website and first direct mail campaign. We are trying to narrow down our favorite logos for our company, stay tuned for a voting poll in our next blog post!

Mike & Jacqui

Benefits for Boston Flippers and more

March 28, 2014 by bostonareia Leave a Comment

Did you know as a member of Boston AREIA you have access to a number of discounts to help you as you flip properties in Boston! Oh…and remember, be sure to check out our How To’s Tips and Tricks for Real Estate Investing!

1. You have access to discounts on materials, tool rentals, appliances, tenant screening, insurance, signage, office supplies, car rental, airfare and much more. Check it out:

AAPL
ADP
Build-A-Sign
Community Investor
CheapOair
ClearNow
CreditSense
FedEx
Headsets.com
Hertz
Investor Protector Plan
Junk-King
Kwikset
Lowe’s ProServices
Mr. Landlord
National Vendor Management Services
NREIG
OdorXit
OfficeDepotMax
Performance Settlement
RentFax
Rent Fast
Rent Manager Software
Sears Commercial
Sherwin Williams
SimpliSafe
Sunbelt Rentals
Tattle Tale
Tenant Credit Checks
Titan Environmental
US Credit Repair Center
US Legal Forms
4Imprint

– See more at: http://www.communitybuyinggroup.com/suppliers.html#sthash.LdOociKW.dpuf

2. You will have access to our Community Investor magazine 3. You gain visibility for your business and find trusted industry related contractors in your community To see all of the information about this program, visit www.communitybuyinggroup.com If you are a member of Boston AREIA, you will have received a member packet with the group code. If you don’t have your packet any longer, please email me at dette101@gmail.com to request the code. If you are not a member, but, and want to take advantage of the member benefits, become a member today! Make sure that you stay tuned for our upcoming blog post Diary of a Newbie Real Estate Investor with our new mentee Mike Fitzpatrick! And, see you at our June 19th meeting focused on 1031 Exchanges and much more! As always, feel free to reach out in between meetings, we are here to help you get your deals done!

What to expect on March 20th at Boston AREIA

March 19, 2014 by bostonareia Leave a Comment

We are having a blast mentoring Mike Fitzpatrick. He’s working with his partner Jacqui Pietrzak, look for their next blog post. They’ve been driving for dollars, working on their website, putting together their first direct mail marketing campaign and presenting potential deals to Peg and I. Super proud of them! I’m watching a power couple develop! WOHOO!

It’s the LAST day to get eligible for this month’s workshop at 5pm. I will be downloading real estate leads from a few lead sources and giving them to the folks who come to the session. I need to know now who is coming at 5pm. If you don’t qualify by midnight tonight, you won’t be able to join us at 5pm before the monthly meeting! Find out if you are eligible!

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Most of you have said that you are interested in saving money on your electric bill and going green. Some of you have switched to Viridian, many of you have not. All of you raise your hand when I ask if you recycle, most of you agree if you had the ability to make 10 times the carbon impact without it costing you, you would. I know time gets away from you and you forget. I get it. We have invited Reps to help you with the 3 minute process it takes to make the switch on Thursday night – BRING YOUR N-Star or National Grid bills with you. It costs you nothing, takes 3 minutes, can save you money over time and you choose green. All who take action will get a special opportunity during our “forced networking” segment.

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Thursday, March 20, 2014 – Is fear of making an offer holding you back?

***Special opportuniy to for MEMBERS of Boston AREIA, we are shaking up our forced networking section…those who get there early will be rewarded!

Monthly Meeting – The question I get most from investors is, “Ok…so, I find a property…how do I make sure all the bases are covering when making an offer and putting together a P&S?” Well this meeting will dispel the fears that are holding you back from making offers! For all details visit – http://bostonareia.com/resources/upcoming-events/

Become a member today – http://bostonareia.com/about-us/membership-plans/

JEM Property hosts open house Sat, March 1st from 12-2 for Boston AREIA Members

February 24, 2014 by bostonareia Leave a Comment

JEM Property Group is hosting an open house at 16 Appletree, Walpole, MA for the members of Boston AREIA!

You got to see the property during the rehab process and now it’s time to see the finished product and ask questions about the rehab!

WHEN: Saturday, March 1, 2014 from 12pm – 2pm

RSVP: Please RSVP with Peg by Friday 2/28/2014: Peg@JEMPropertyGroup.com

Dreams of flipping houses for income?

February 11, 2014 by bostonareia Leave a Comment

Do you have dreams of flipping houses and riding off into the sunset with a bank full of cash? Many people have that same goal. Then they start doing the research on what to do and how to do it. They inundate themselves with education and read everything that everyone has ever written on the subject of flipping houses. A few, I mean maybe 5 percent actually take action on some of the things they learn. A few of them are successful, a few of them find themselves in a situation that leaves them over their head. The ones who don’t take action are paralyzed by the fear of doing something wrong and ending up like the ones that are in over their head. They’ve got families that are counting on them, they can’t get in over their head. And, there is so many methods and areas of real estate out there. What way do they turn? Who do they listen to? What is their best tool to get into the game?

Well….every guru out there will tell you to come to your local real estate investors association to network with people who are actually doing things, know the local laws and will be willing to partner with you on deals. A seasoned investor won’t partner with you on a deal if there is an opportunity to get in too far over their head. They don’t get emotional about properties. They don’t do deals just because. They run the numbers and if the numbers make sense, then they go for it. So, the gurus are right, groups like Boston AREIA are the best place for you to go to network and meet these investors, get the education and develop the relationships you need to be successful.

Boston AREIA is taking things a step further. We are running a mentorship contest. Unlike the gurus programs, there won’t be a charge for this mentorship. It’s all about on the job training and learning from local experts. READ ABOUT THE MENTORSHIP CONTEST HERE!

We also have local real estate expert Peg Graveline and her team at JEM Property Group coming in and doing a 20-30 minute talk on flipping and rehabbing every month. The team is also very open to partnering with newer investors to make sure they are successful in their endeavors. Make sure you get to the upcoming meeting on the 20th!

Yours in success!

Bernadette Trafton, Boston AREIA Chief Connector