Here’s a link to the article: http://www.biggerpockets.com/forums/12/topics/73368-looking-at-dom-when-considering-a-potential-deal

In Houston, we have HAR.com which provides a very useful list called the 50 Most Viewed Subdivisions. It’s a safe guess to say that the subdivisions mentioned on that list have some of the lowest days on the market in the Houston area. For single-family investors, focusing on a list like that can prove very profitable.

The 50 Most Viewed Subdivisions list is here.

It’s just important to remember to ask for the days on the market figures whenever you get comparable sales data for a particular neighborhood or subdivision. Your broker should be able to provide that for you.

Q: But what about the fees?
A: We don’t charge any fees.
Q: What do you mean you don’t charge any fees?
A: We mean there’s nothing extra to pay other than what you paid upfront in points.
Q: But what about the extra fees upfront to fund the loan?
A: There are no extra fees.
Q: What about inspection fees?
A: Nope
Q: What about prepayment fees?
A: Nope
Q: Well, where are the fees?
A: There are no fees.
Q: What about the property appraisal fee upfront?
A: We pay for that. You don’t pay for that.
Q: But where are the fees? Hard money lenders are supposed to charge fees!
A: Really? Well, we must be doing something wrong.
Q: Okay, you guys are nuts. You can’t do it that way.
A: I guess we’re nuts.

Now with all of that said, we occasionally get some unusual responses when we tell people who call us for the first time that our rate is 12%. … What? 12%?! I’m not going to pay 12%! I can get 5% from my bank! … Really? Is that true? Your bank will lend on a non-conforming, vacant, non-homesteaded, single family home that needs repair before someone can live in it? Really? My goodness. Take that loan! Then the next question we’d ask is: How long is your bank going to take to underwrite the loan? About 4 weeks? If we approve the property, we can underwrite it and fund it in 48 hours.

http://www.forbes.com/sites/rajeevpeshawaria/2012/02/21/confessions-of-a-successful-entrepreneur/

In a nutshell, Rajeev’s message is:

• Be open to people.
• Help people even if it seems there’s nothing in it for you.
• Ask people about themselves.
• Look for ways to say yes.

Since there’s no additional communication, we think, okay, they don’t want to do that deal. But then out of the blue, ten days later, we get a phone call asking us to fund the deal the next day! ..Wait! You disappeared. When we sent the quick structure, we did so assuming you’d open up the information exchange if you wanted to proceed. But when the line went dead, there was no exchange. And so from our perspective the deal went cold.

If you want to proceed on a deal after you get the quick answer from us on a loan structure, it’s important to start feeding us info about your deal. Maybe you sent us the purchase price, but no rehab estimate. Or maybe you sent us the basic info but no photos of the property.

If you want to proceed on a deal, please start feeding us information. We’re not there with you seeing the things you’re seeing and obviously we can’t download information via ESP. We need you to actually send us the information. – Imagine that :)

The real reason this is so important is that we’re a bit like air traffic controllers here. With 50 loans outstanding at a time and each loan paying off roughly 5 months after origination, you can imagine what it’s like around here. We have planes landing all the time. And we have to get planes back in the air. We don’t let planes sit around on the ground very long.

If you go silent on your end, the plane that represents your capital is probably going to takeoff. And then by the time you call us, we probably have an inbound plane pre-routed to head somewhere else.

So if you want to do that deal you called us about, let us know. Feed us information about your deal. Do it early. Then we can pick one of those planes out of the pattern and have it ready for you when it’s time to fund your deal.

We are a hard money loan originator. That means: We make hard money loans.

Whatever you think hard money loans are, we’d like to stop for a minute and see if we can change your perspective. Here are three key insights about this business:

1.    We’re not actually lending
2.    In reality, we’re in the “finding motivated people” business
3.    We’re a cheap date

What are we saying? … Let’s start with #2 first.

- We’re in the “finding motivated people” business

On certain days, one of us will sit in the office and answer phone calls from people looking for funding. While answering these calls, we hear all kinds of propositions

• “I can get this one property for $150,000. I want to put $200,000 into it and rent it out.”
• “I’ve never done multifamily before, but I want to close on this 120 unit apartment complex I found that’s a steal.”
• “I live in Florida and I want to do deals there in Texas and manage them from here.”

Well, none of those ideas sound too great to us. But underneath these propositions, what we’re really looking for is “Okay, how motivated are you?” – Do you have the organizational skills to manage a small project? ..Yes? Okay, great. Do you have the skills to manage a small but intense project? Are you organized enough to manage a series of tasks over a 60 day period? We’re not asking if you can do the actual rehab yourself, but can you manage the contractors and manage the process?

If the answer is yes, then all you need to do is find a deal. Not a deal like the ones mentioned above, but a good, simple, straightforward deal. It’s pretty basic. In a nutshell it’s buying cheap, fixing on a budget, and then cashing out through selling or refinancing.

If you find a good, simple deal, you are going to make money. The reason you’re going to make money is because you have the organizational skills combined with a good level of motivation. It’s not just buying cheap, it’s do you have the motivation to follow through?

And the key really is the motivation to follow through.

If things don’t go exactly to plan, are you going to get frustrated and throw up your hands?

If you get stuck in a specific part of the rehab plan and can’t figure it out, are you motivated enough to find someone who knows what to do and ask them for help? Or will you throw up your hands, head home for the couch, turn on the TV, and deal with it later?

As it turns out, motivated people solve problems. Motivated people take action. Motivated people get it done. And motivated people win.

We like partnering with motivated people. And if you are motivated enough to follow through, you too will win.

- We’re not actually lending

Sometimes when people call us, the first question they’ll ask is, “What are your rates?” We’ll give them an answer, but since they’ve asked the wrong question, we might as well say “Oranges!” because they’re in the wrong world.

We’re not a bank. That’s right. We’re really not a bank. If you need a bank, then for heaven’s sakes please do call a bank.

What we are, in fact, is a source of quick funds who can invest in you and your deal on short notice. You don’t have to explain much to us. We can figure your deal out quickly enough and give you an answer almost right away as to whether we can fund it.

Okay, how much do we charge to fund your deal?

- We’re a cheap date

If you called up any normal real estate investor anywhere in the world and told them you found a great deal, but didn’t have the money for it, and would they put up the funds to do the deal, nearly 100% of the time there would be a significant due diligence period that if passed would be followed by a deal term where they’d put in most of the money while asking you to have some skin in the game, you’d do the work, and then you’d both split the profit at the end. That’s right split the profit. 50-50.

Go out and try this tomorrow. Look for an investor to fund the equity in your deal. At a minimum the answer 99% of the time will be the 50-50 split scenario above.

And so how does your return look that way? Let’s say it costs $1 million to buy and fix your property. And then say you sold it for $1.3 million net of all costs four months later. The investor would take $150,000, and you would get $150,000. Okay, great.

Now let’s say you called us instead. Again, it takes $1 million to buy and fix the property, and you then sell it for $1.3 million four months later. In this case, though, you send $60,000 to us and keep $240,000.

What?

Yes, you get 60% more money in this deal.

We charged about 7% total.

Like we said, we’re a cheap date.

Right now we’re just calling it the Deal Sources page
(until we can think of a better name for it!)

ps. The Deal Sources page is getting huge!

Caroline Lending is a lender specializing exclusively in commercial loan programs for the acquisition and rehabilitation of distressed residential and commercial properties.

We provide acquisition and rehab financing for:

• Single family
• Multifamily
• Commercial

Here is a full list of states we lend in from our Houston office.

Our main office is located inside the headquarters at Boxer Property on N. Post Oak Rd here in Houston. Our back office operations are in downtown Houston at 712 Main Street.

And for a full description of our underwriting process, please see our Underwriting page.

Also, please see our Deal Sources page.