In my recent post What is Hard Money,  I promised to post a list of Hard money lenders.  So here it is.  Much of this list comes from an e-mail by Baltimore real estate investor John Parker; thanks John.

Local Baltimore Hard Money Lenders

Cavalier Realty Company, Inc.

Hard Money Bankers
Jeffrey Shiller from Hard Money Bankers is a practicing real estate attorney. He is active in several of the local investing clubs.

HML Capital Group
Beth Marsie-Hazen helps run the Mariea investing club. You can find her and her partner Michael Gabriel at their meeting regularly.

Neil Roseman, Imagine capital
Neil is a lead inspector as well as a hard money lender.  I have never used him for hard money but I have used him as a lead inspector.  I wouldn’t hesitate to use Neil if I was looking for a loan.  The best way to reach  him is by cell phone  410-591-4597

Rex Frost, Blue Island Inc.
Dr. Frost can be reached from 9am -12:00 noon at 410-592-2967

Hard Money Lenders From Around the Country

Brookview Financial
Equity Development Corp.
Hard Money Funding Network
Cohen Financial group
Blue Water Funding
Private Financial Club
Fusion Cash and Capital
HML Funding LLC
Synergy Equity Management
Dial Financial
Kennedy Funding

Other Funding Sources

The following are not true hard  money lenders but they may help with your quest to find investing money.

Go Big Network
Prosper
Lender Lab

If you are new to real estate investing you may have heard the term “Hard Money”.  Just what exactly is hard money?  It is a short term loan with high interest designed for investors who renovate properties. These loans do not come from banks or traditional lenders. They are offered by private lenders in the business of making loans to real estate investors.

You can remember the term by thinking it’s hard to pay back because of the high interest.  However I was at a foreclosure auction of a well know Baltimore hard money lender and he said it’s call hard money because  “It is hard to collect.”

What Are the Terms for Hard Money Loans

While traditional financing is made primarily based on credit scores and the borrowers ability to pay, hard money is usually based on the value of the property.  Hard money lenders will loan for both acquisition and repairs up to approximately 60- 65% of the after repair value of the property.  A typical hard money loan would pay for the property at closing and pay for the repairs on a draw schedule.  In other words repair money would be reimbursed as the repairs are completed.

Hard money lenders typically charge 12-15% interest and 3 to 5 points.  A point is  1% of the loan.  So for example if you were borrowing $100,000 and were charged 3 points,  you would have to pay $3,000 up front.

Why Should I pay Loan Shark Rates?

You might ask “Why would I pay that much in interest when rates are so low now?”

1. Loans are hard to get now.  You may not even be able to get a loan from traditional lenders like banks.
2. Even in a strong lending market it is harder to find construction loans.  Most mortgage lenders only want to lend on livable properties in good condition.  We usually need loans on properties needing work as well as the money to fund the renovations.
3. Traditional lenders take a long time to approve loans and can be unpredictable.  Hard money loans are often approved in a few days.  Sometimes the ability to act fast will get you better deals.
4. If you have poor credit, that may not be as important to a hard money lender.  It will kill you in the eyes of a traditional lender.
5. It is often cheaper than a “partner”.  A common scenario is to find a money partner and split 50/50. You are giving away 50% of  your profits!  A  hard money loan would cost you a lot less.

New investors often think hard money is too expensive.  It is not the cost of the money that matters, it is how much money it will make you that counts.

New  Rules for Hard Money

The tightening of credit markets has affected hard money loans too. Today a hard money lender is likely to look at your credit. They may also  expect you to have some experience in renovating properties, and have some “skin in the game.”  In other words they won’t fund the entire deal.  You will have to come to the closing table with some money to put down.

In the next couple of days I will post a list of hard money lenders.  So check back soon.

Happy investing,

Ned

Join me and my friends from REACH to play the Cashflow game at Bare Bones Grill and Brewery in Ellicott City, MD April 8, 2010.  It is a great opportunity to network with like minded individuals who are interested in Real Estate and building their net worth.  RSVP for the CashFlow Game here.

The Cash Flow game is a blast and you will feel like a tycoon as you build your financial portfolio. It is designed by Robert Kiyosaki author of Rich Dad, Poor Dad,  as a financial teaching tool.  It will help you learn to evaluate and maximize your investments.  The game will also guide you as to what is important and what will trip you up on your path to wealth.  The goal of the game is about getting out of the “rat race” and building enough wealth to live off your investments.

Remember to bring business cards.  The cost is free but the restaurant will expect us to consume food and drink for providing the space.

RSVP for CashFlow here

I hope you can join us.

Ned

PS:  Don’t forget to RSVP.  Last time we had to notify people of an address change!

Baltimore is a city of neighborhoods. Many of these neighborhoods have colorful names that hint at the history of the neighborhood, Greektown,  Butchers Hill, Brewers Hill etc.

But do you really know the true borders of those neighborhoods?  There are official names for every part of the city.  Often investors say a property is in a particular neighborhood that it doesn’t really belong to.  A common example would be properties that often advertised as being in Belair Edison when they are really part of Four by Four.  Four by Four is close but with distinctly lower property values.

Full Color Baltimore Neighborhood Map

The city produces some wonderful maps that are helpful to Baltimore real estate investors.  The city map office is at 417 E Fayette St. (The same building where construction permits are issued.)  They offer many different maps  and I have three posted in my office. The one pictured above with the city neighborhoods is available in black and white or full color.   As I recall the color version $54 several years ago.  The black and white versions was substantially less.

Baltimore Zip Code Map and Color Street map

I have the zip code map right behind my desk.  When a deal comes through and I want a quick check where it is located,  I just turn around and check the zip code.  The other map in the corner is a color street map which at the time was only $5.  A serious investor should have these maps but if you are new  you can go to Baltimore City’s Neighborhood page.

Happy investing,

Ned

Take Massive action

Something my friend Pete Gardini often says is to take massive action. You are not going to be successful by sitting around doing nothing.  Goals are great, thinking and planing are important, research is necessary, and going to seminars and reading real estate books ( and my blog ) are all valuable.  However real success is about taking action.  At some point you have to get out there and do something.

Inspecting 70 properties

As a tax lien investor, this is a busy time for me getting ready for the Baltimore City tax sale. It is important, especially in Baltimore, to check out the properties before you bid on them. There are lots of decrepit buildings and vacant lots in the city. You need to know what you are bidding on. (see this post about a bidder who paid big $ for an empty lot. )

Today I inspected 70 properties. I had stopped at 67 and counted them up and figured that was enough for the day.  I was beat. But I couldn’t resist checking a few more as I drove out of town and wound up with 70 total.  That is my idea of massive action.  What is yours?

What is your massive action?

A lot of readers come here to learn about tax lien investing. But that may not be the right strategy for you. Figure the right strategy for you and then take massive action. No you don’t have to inspect 70 properties in a day to be successful in real estate, but you do need to take action consistently.

You need to be marketing, talking to buyers and sellers.  You need to be inspecting properties, and making offers. This business doesn’t just happen – you make it happen.  If you make the effort you will be rewarded.  If you keep doing what successful people do long enough and consistently enough, you too will be successful.

My friend Steph’s idea of action

Steph is a regular on several online forums. I met her in person for the first time at a Steve Cook Seminar.  Steph is one determined lady. If you want to see what it means to take action and what real persistence means I recommend you check out her blog Flip this Wholesaler.  Read her blog and you’ll get a great idea about what I mean by taking action. Sometimes she wears her heart on her sleeve and you will see all the ups and downs of being an investor. But most importantly you will see what it takes to be successful.

Happy reading

Ned

Do you have a mastermind group?

I am fortunate to be a member of a high level mastermind group. I am continually impressed with the ideas, knowledge, and success level  the members of my mastermind group generate.  Two members of my group are putting on an exciting event later this month, The Exponential Wealth Conference. The conference will be Two days Friday April 24,  &  Sunday  26, 2009 with multiple  speakers,  and jam packed with info. Click here to see the complete schedule

The man who negotiated with Warren Buffett

I am not just telling you about this because it is put on by my friends but also because I know this will be a great event. I know my friend Pete Gauthier is both an excellent negotiator and great teacher of negotiating because I have heard him speak first hand.  Pete Gauthier sat across from Warren Buffett at the negotiating table  during his stint as as a lead negotiator for the Pilots Union.

All the other speakers; Dan Sprietzer – Business coach extraordinaire, Edwin Kelly – Investing in real estate with your IRA, Tom Zeeb – Automating your business are top notch. I have never heard the featured speaker Richard Flint, but my friend Dan assures me I will be impressed.

Business Foundations, Where Every GREAT Business Starts

I am a big fan of education. There is no better place to invest your money than in yourself. When Dan told me about this event I really wasn’t excited about spending another $2-3,000 for a multi-day event. I love these things and they have really helped me succeed to a high level but hey right now it’s just not in the budget. Then he tells me “It’s only $199.00!” Whoa, Big Change, it’s now only $49 ! ! !

Sign up here

Some of the Topics Covered Will be

• Setting up systems
• Business automation
• Internet marketing
• Negotiating
• Tax free investing
• Much Much More

Sign up here

The Exponential Wealth Conference: How to Make it, How to Grow it, How to Keep it!

Did you see what I said above. It’s now only $49.00!

Do you have an Apple iPod? How do you use it? I try to take a walk every day. It is modest exercise and it relaxes me. I also get some of my best ideas while walking. To help generate those ideas I listen to my iPod.  I listen to motivation, sales, real estate and marketing recordings.

Many of us have a shelf full of programs from all kinds of real estate Gurus. Why not load them onto your iPod and actually listen instead of leaving them on your shelf.  I have also recorded my goals so that I can listen to them daily. You can take this a step further and record a list of your strengths and successes. Motivational speakers regularly talk of our “Self Talk” and how it can help or hinder us depending on whether it is positive or negative. Record a positive self talk tape  and listen daily. This guarantees you a daily dose of positive messages.

What is Nike +

I Use a Nike+ for my iPod.  This is a really cool tool.  It has a little transmitter that goes in your shoe and it sends a signal to a receiver attached to your iPod.  It keeps track of how far and how fast you run.  When you sync your iPod it uploads your info to a Nike website which tracks your mileage.  You can set goals and track by day, week, or month.

While I am out walking, the Nike+ is keeping track of how far, while the iPod give me something positive and motivating  to listen to.

Kudos to Nike for Good Service

Well I had to replace my sensor as the battery had run out. I hooked it all up and it wouldn’t sync properly with the website. I checked the online FAQ – useless.  So I sent a message to customer service.  Most big companies like Nike have bad customer service. They want to rely on their horrible online instructions and FAQs.  Much to my surprise I quickly I got a reply back with an answer that actually worked.  It was a personalized message from someone who actually understood the question! I was very impressed and I think Nike deserves Kudos for providing such good service.

Try it Yourself

If you want to get an iPod or the Nike plus I’ve made it easy for you. Just click the links below. The Nike+ does not work with all iPods. So if you already have an iPod make sure you have the right one before you spend the money for the Nike+ kit. You need to get a Nano (1G, 2G, 3G or 4G) or an iPod Touch 1 G or 2G. To make it easy for you these links will send you to the right page.

Apple iPod nano 8 GB (4th Generation)
Apple iPod touch 8 GB (2nd Generation)
Apple Nike + iPod Sport Kit for iPod

This book by Dave Lindahl is about repositioning Apartment buildings. This is truly one of the better books on real estate investing that I have read. While its primary focus in multi-family buildings, it has tremendous value for single family home investors also. Dave Lindahl got his start renovating single family properties and doing small 3 unit multi-family properties.

What is Repositioning

For those unfamiliar with the commercial property business a repositioning would be the equivalent of rehabbing a single family home. Rehabbing a single family home is usually done on a vacant property.  When the property is complete it is sold to a homeowner or landlord. Repositioning is generally a more complex process. It can often be done with tenants in place. Usually some renovation is required but it is more than just renovation It is often also about upgrading the tenants, management and the Position of the property in the marketplace. (By the way one of the best books on Marketing is called Positioning: The Battle for Your Mind Repositioning apartment buildings is in part applying it’s concepts)

Multi-Family Millions is Full of Tips

This book is full of tips. My copy is full of yellow highlighted pages. Many of these tips apply to rental properties of any size. One example would be his suggestion to offer tenants to paint an accent wall for an extra $20 a month. Or how about this tip

Replace faucets. Do not be cheap here! Inexpensive faucets are a maintenance headache, and end up costing you more overall. Get ones that are distinctive and elegant. Here’s my rule: If the tenant has to touch it regularly, make it special.

The book has advice on finding deals, working with contractors, smart renovation tips, financing your deals, negotiating and much more.

Who is Dave Lindahl

Dave invests in apartment buildings around the country. He started small. His first rental was a  3 unit building in a depressed  area. He now has over 5,000 units, so he know what he is talking about.

Who Should Buy this Book

Anyone who wants to invest in apartment buildings would find this to be a wonderful book. Yet there is value to single family home landlords, and rehabbers. As I said above this is one of the better books I have read on real estate investing. In addition to really solid information it is well written, easy to read and easy to understand. Just as importantly it is not full of irrelevant fluff like so many investing books. I recommend this book highly. You can buy it from Amazon at a great price here. Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits

Happy reading,

Ned

Do you want to learn how to invest in tax sales?  Do you want to learn the best neighborhoods to invest in Baltimore City? Which neighborhoods are the good the bad and the ugly? Do you want personal mentoring and all you investing questions answered?   If so contact us.

Crab Properties, LLC is looking for  interns to help with the 2009 Baltimore City Tax Sale.  If you would like to learn about the tax sale business from an experienced investor go to the Contact Us link above.

Candidates must have transportation and will be expected to travel to Baltimore to inspect properties for the upcoming tax sale. This often works best in pairs so don’t be shy about applying with a friend.

The Real Deal Investment club will be meeting this Tuesday March 17

Date
Tuesday March 17
(Held every third Tuesday of the month)

Time
6:00 – 9:00 PM

Location
The Meeting House
5885 Robert Oliver Place
Columbia, MD 21045

Click here for Directions an Map

This is a new club I mentioned in this recent post about two new investment clubs. Tammy Phelps the organiser tells me she has a great speaker lined up. I really enjoyed their first meeting. It was a smaller more intimate club without all the rah rah sales pitches you often get at investment clubs. I hope to see you there.