In this episode Holly talks with top 200 lender Ken Starks. Ken has been in the mortgage and real estate fields for over 14 years, he has been featured in USA Today and The Wall Street Journal, he is a flipper with an investor mindset with 80 flip properties under his belt.
Ken has joined House Flip Masters to share his money strategies as well as to help us make sense of the various terms used regarding the money needed for your next investment.
Starks is a lender who deals with many types of loan options and he describes to us what hard money is all about. Hard money is high level loan backed by the asset and current market value or purchase price, whichever is lower. Although the name suggests otherwise hard money is easy to get but it has to do with the asset value.
Someone who is a hard moneylender might nor care about your credit score or your debt to income ratio (DTI) but you can expect a high interest rate on this type of loan. Some hard moneylenders will be able to help you acquire properties or even help you renovate them depending on their skills and the relationship that you have with them.
Holly and Ken discuss points on a hard money loan; points per loan can vary by lender and if you get a line of credit but they average around 2 points per loan. Starks advises that a way to void points is to go with a loan that has a higher interest rate if that fits for your property.
There are many types of loans that Ken deals with but the most noted is the niche program he has created to help someone who has more than 10 properties to acquire unlimited loans. Conventional loans with Fanny Mae, Freddy Mack, or FHA have limitations on the amount of properties that can be financed per investor. Ken’s advice to investors is that the right loan and the right lender will depend on the circumstance and you want a lender who is going to strategize with you.
When talking about getting another loan when you need a co-buyer Holly and Ken both agree that you need to partner up with people who have good credit and want to be passive to help you have more purchase power. But they remind us that before you put your name on a loan and lend your credit you need to know who you are doing business with, knowing their ethics and knowing that you can trust them is vitally important. Open communication is even more important because if the buyer misses a mortgage payment you are also responsible for that money. A co-borrower’s credit is affected if any good or bad circumstances occur within the life of that loan. Stark advises more over less control because it is your destiny.
Ken is not your typical lender; he is able to find the best way to find money for your investment. When searching for a new lender you need to ask questions of the lender and of yourself; what kind of volume do they do, what loan programs do they specialize in, what is their experience with investors, and most importantly are they the right choice for you.
If you are looking to refinance a property for whatever reason these are the actions steps that Starks advises you to keep in mind: how long have you been in your loan and what are your goals? If you have a high interest rate (4%+) on a 30-year primary now might be the time to have a refinance conversation.
To get in touch with Ken
Deborah Razzo – 20 years entrepreneurship, made her way into real estate 6 years ago. Razzo started her venture into real estate due to a life-changing situation; she was in a car accident that forced her to change her focus. She educated herself on real estate, reading Robert Kiyosaki’s book Rich Dad, Poor Dad, before she took the leap.
Razzo’s core investment philosophy is to flip for capital and to reinvest that capital for long-term wealth; making a bunch of money on first flip started her addiction to house flipping.
Razzo does not flip multiple houses at the same time so that she can be more involved and focused on the house the is her current project and so that she may be more present with the team helping her to flip a home. Holly reminds us that team members always seem to preform better when they are given attention and are reminded that you are watching their progress; Razzo believes it is a tremendous gift to give people your presence and it is a key to her success.
Razzo’s greatest influence is Tony Robbins, he has taught her to live the life that she wants, real estate affords her freedom of her own time allowing her to spend time with her friends and family.
Razzo reminds us that real estate can cause Shiny Object Syndrome, where we want to get into each facet of the business but need to direct our focus so that we can create freedom and success in flipping.
Partnering with a successful flipper is a great opportunity for those that are new to house flipping; Razzo feels that joint ventures help everyone involved because it allows you to see the different flipping styles that different individuals use, it also opens up the door to several different connections and teams used in doing a flip.
Razzo’s biggest lesson learned in her real estate path was knowing when to bow out; do not let commitment keep you in a deal that is causing you to lose money, don’t fall in love with your babies and walk away from a deal that is causing you to lose money. Both Holly and Deborah remind us that it is okay to take a loss but be mindful of your choices and keep moving forward.
Deborah feels that the most rewarding aspect of her career is her freedom of time and the most frustrating part of being an investor is persistent, keeping the focus going on your goal because you can enter a deal that may never make escrow but you need to keep moving forward.
Razzo created Women’s Real Estate Network (WREN) to help surround herself with other women who are successful in real estate and to create a space for her and other women to network in a male dominated profession. You can check out this network at www.WRENinspire.com
In this episode of House Flip Masters Holly McKhann talks with Bryce Robertson and the lucrative business of mobile home park investments.
Bryce has been investing in real estate for many years, he is a Native Australian, he is an entrepreneur, and educator with more than 20 years experience in major construction, and real estate business.
Growing up in Australia and doing construction lead to Bryce traveling all over the world. On one traveling stint Bryce met his wife who has a background in mortgage and finance. The two decide to started down the basic path of fixing and flipping until they realized they were not passionate about this venture. Bryce’s wife moved over to doing luxury real estate in Newport Beach while he educated himself on mobile home park investing. Once Bryce found mobile home park investing he has not looked back to his old fix and flip ways.
Mobile Home Park investing appeals to price because he deals mostly with land and not with houses. Bryce supplies utilities and maintains the dirt.
Bryce describes to us the 2 types of tenants who occupy Mobile Home Park; those living there because of lifestyle choice and those that live their because of affordable housing. Those that fit into the lifestyle category is people who want to live there and they do so because of the amenities that the park offers. Those that are in the affordable housing category are there because they might have enough money to live elsewhere and they feel that this is the best, affordable choice for their budget.
Bryce deals with mobile home parks in the affordable housing space The affordable housing space has a lot of mismanagement and poorly managed parks and offers investors a lot of increase in profit to turn those things that are not working well around.
Bryce reminds us that cap rates are something that we need to keep in mind when thinking of investing in a mobile home park because they are typically higher than other comparable house rate classes.
Bryce’s company Property Workz LLC aims to own, operate, syndicate, and educate those that are involved in mobile home park investment. Bryce and his company own and take care of property management and improvements, they also provide a platform for investors to gain returns on their investments. They also provide an area for people who want to break into mobile home park investing to educate and help them with their first deal. Property Workz has something for everyone depending on his or her risk tolerance and time that they have in their schedule.
Bryce offers advise on how to find a park for your investment, he suggests visiting www.mobilehomeparksstore.com, the dominating site for sales on MHP. The best route that Bryce has taken is cold calling because it allows for a relationship to be built and those relationships can help to create a sale.
If you are looking to invest in a MHP Bryce advises that Southern California, Florida, and New York are not the best for a business model due to low cap rates and more people living the lifestyle choice. The Midwest and Southwest are the key places to make investments.
When buying a park Bryce’s checklist includes a park with 50 to 200 spaces nothing over that, city water, city sewer, no private utilities, and a low percentage of park owned homes would be an ideal park. He also suggests that occupancy needs to be at least 50% with 80% being a park that is stabilized.
When needing a loan for a MHP investment Bryce goes to specific brokers but says that larger banks are now dealing in this investment space because it is being seen as a solid investment but loans may only be available at specific branches.
Once you acquire a MHP what’s next? Bryce advises to look at the business side of things to lower expenses and increase revenue – fill lots, bring up occupancy, fix up esthetics, signage, landscaping, etc. Also keep in mind that when you have occupants and you intend to make changes that you need to keep them informed, send out notices to those that are living in the park.
Bryce likes investing in mobile home parks because of the fact that it is in the affordable housing space. It allows him to turn around a park that looks ugly and that is being mismanaged.
If you are interested in mobile home park investment you can contact Bryce, he is available to advise and educate those that are interested in investing. You should also look at numbers and properties on www.mobilehomeparksstore.com.
Bryce can be reached at:
Danny Johnson has been flipping homes for 13 years and is from San Antonio, Texas. He has 5 kids from ages 4 to 24. He started flipping to gain financial freedom as most investors do.
He helped his father who was a contractor when he was a teenager, and then majored in computer science in college. He worked as a software engineer while he flipped homes on the side, doing so for 3 years before he finally quit his day job.
You can read about Danny’s personal experiences in his Flipping Houses Exposed book which you can download at www.FlippingJunkie.com
He shared that typical numbers are 100 calls from sellers lead to 10 offers which lead to 1 deal. He says his conversion rate is about 14% due to his excellent marketing, pre qualifying, and closing skills.
He advises to ensure that your website includes testimonials to speak of your trustworthiness and performance.
His latest project is www.REIMobile.com which includes a follow up system for investors to track seller leads, which is so important since many deals are completed after months or even years after the initial contact.
Danny’s best advice for a new investor is to give your efforts and system time to work. Don’t quit. For a seasoned investor he recommends to grow your team. Know that other people can do things as well if not better than you, like buying houses from sellers.
You can see what your website looks like on various devices at www.mobiletest.me for free. Make sure your site’s mobile friendly, as Danny sees most of leads coming from mobile devices. Of course if you use his lead propeller site he takes care of that for you.