Real-Estate Finance By Bill Fairman

Certainty Safety

10 Year Treasury Yield 2-25-2019 2.67%

Wall Street

Real Estate

My Why

Finance Basics, Borrower Risk

Finance Basics,Collateral

Lowest Risk to Highest Owner- occupied single family Single purpose commercial or raw land

Rate and Terms SFR Non-Occupied up to 30yrs, 5% 25% down 5-10 homes financed SFR Non-Occupied up to 30yrs, 4.75% 20% down 4 homes financed SFR Non-Occupied up to 20yrs, 5.5% 30% down, legal entity SFR Owner-Occupied up to 30yrs, 4.54% as little as 5% down

Commercial Construction Loan Hard Money/Private Loan Home Equity Loan Non-Owner Owner-Occupied, FHA 403K Rehab Loan Commercial Construction Loan Hard Money/Private Loan Home Equity Loan

Hard Money/Private Lender Terms 2-5 Origination Points = 2-5% of the loan Amount Interest Only, With or Without Monthly Payments Lender Will Typically Hold The Rehab Funds 8.99%-12.99% Interest Or An Equity Stake 65-70% Of The After Repair Value

Fees vs Equity Split $24,985 285,000 -17,100 -1000 = 266,900 - 200,000 Total Finance Charges With 9 Months Of Payments $24,985 285,000 -17,100 -1000 = 266,900 - 200,000 66,900 = 33,450 Profit Split 200K Loan With 3.5 Points & 11.99% Rate Sales Price 285K 285K - 6% Realtor Fee - 1000 Closing Cost $8,465

Deal Structure Fix & Flip Rule of thumb on ARV 70% or below Stay as close to a metro as you can look for homes 35yrs old or newer If you’re new, find a mentor Do not try this remotely No resort areas

Deal Structure Buy & Hold Conventional Financing 9 properties at very low rate, $2,250 income Best for Acceleration of Assets Min $250 Cash Flow

Deal Structure Buy & Hold, Private Money Partner 20k gets the $850 for 10yrs = $102,000, after 10yrs signs interest over to partner 20k-8,200 a yr for 10 yrs = 41% return $80,000 Purchase, $850 cashflow 20k Partner looking for cashflow 60k Partner wants growth The 20/80 Split 60k partner, after 10 yrs receives a house worth $107,500 assuming 3% appréciation per year and the cashflow forever!

Deal Structure Buy & Owner Finance 5k down at 7.99%for 15yrs = $668.55 x 180 = $120,339 + 5k $5,022.60 per year = 10% return Home is worth 60-65K ARV, you sell for 75k with financing $45,000 Purchase need 10k in work, all in at 50k Going rent for the area is $750 per month

Getting Expenses Under Control Top Five Have a planed budget and start with you Be penny wise Highest and best use Look in the scratch and dent areas Look into VA’s, fiverr.com upwork.com

Diversify

Text Asheville 101 to 39492