Investors – I bet you already now that Las Vegas at one time had the highest amount of foreclosures on the market around 2010. With so much real estate inventory selling for pennies on the dollar it was easy to become a successful real estate investor. Buddies of mine were buying at really low prices, renovating and flipping for big profits.
Well not me! I started to pay attention to all of the investors whose real estate single family flips did not pan out quickly and they ended up becoming “Landlords” to pay the mortgage on the property. That scared me. I did not want to be at my kids soccer game and get a call that the toilet was broken. Because Landlording was not appealing to me I did not jump on the real estate investing bandwagon.
One night I went to the MGM grand and I was playing craps and rolled a 7 the hard way. I won $7,000 on the spot. After taxes and a few splurges on the wife and trips to the steak house & cigar bar – I had a solid $5,000 left that I just put in the bank.
So Peter, my neighbor who is a licensed contractor, told me about a vacant house in a well sought out neighborhood in Henderson that he was having trouble getting a loan to buy because of his bad credit and business debt.
After talking to him about his plans and what the property needed, I told him if he came up with the most of the money to purchase or finance the property – I will loan him the closing costs. We agreed that he will have to pay me back in 6 months with interest or I will put a lien on his business or the property which ever would guarantee me a earlier pay back. Like gentlemen – a hand shake sealed the dea.
Peter had found a hard money lender on REIClub.com to finance the property and he used my $5K to pay the points, fees, and closing costs.
After he repaired and flipped the property he sold it within 45 days using a real estate agent and made a $26,900 net profit. He paid me back $8500. I could not believe I gained a $3,000 profit on my original loan of $5,000! He said he threw in the extra $500 because I believed in him on his first solo deal. I so liked being a real estate “paper” or “money” investor. I made $3000 basically doing nothing at all.
I later reinvested the $8,500 into another deal with him and profited $5,000. So I will continue doing what I call private money lending flips. Thanks REIClub.com and Alan Cowgill for all of the free investing videos and articles on private lending investing.
Las Vegas Nevada