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In the Streets with Andrea Warkentin Canadian Quick Turn - Raising private money fast

AndreaW

Inspired Forum Member
REIN Member
Joined
Aug 31, 2007
Messages
61
Well did I ever find myself in a pickle last week. The joint venture partner I had lined up for a bank owned foreclosure deal backed out on me and I had 2 weeks to close. I had a rent to own tenant buyer moving in the day after possession and had taken partial down payment from him already.



I lacked the funds for a down payment and wasn't sure if I would qualify for a mortgage and didn't really want to. The whole point of quick turn is to use other people's mortgages and not have to use your own money and credit. But sometimes these things happen, so I thought I would share with you all the lessons I have learned through this event.



First off, I had put in an offer on a property knowing that I did not have a joint venture partner waiting in the wings. Now for some of us reptile brains, its action first and deal with consequences afterwards. So in true reptile fashion I removed my financing conditions while looking for a joint venture partner that was not yet secured.



1st lesson learned: Have people waiting in the wings before you purchase a property and get a financial committment like a deposit held in your lawyer's trust account.



I then located a joint venture partner who had the money, the credit and the willingness to go ahead with the deal, that is until she spoke with her mortgage broker who flat out told her not to do it and refused to give her a mortgage. No real explanation from the mortgage broker who was giving out unsolicited financial advice, just a NO.



2nd lesson learned: Send potential joint venture partner to YOUR mortgage broker who understands JV deals.



I asked some of my quick turn friends who they used as private money lenders and proceeded to contact several and received info on fees and interest rates and terms. Luckily, I was able to quickly update my DCR spreadsheet and send out tax info to the mortgage company quickly. Always a good idea to have all your bank binder info in one place should you need it quickly. In less than 24 hrs, I had a committment from a private lender to fund almost 80% of loan to value with one week to close left.



3rd lesson learned: Its always a good idea to know who some private mortgage companies are, their terms, rates, and turn around time in case you ever need to use them.



Now I still need over $60,000 for cash to close. I called around a few friends and current JV partners to secure the remaining funds. Thankfully one of them was able to come to my rescue and had the money to my lawyer in a few hours.



4th lesson learned: Friend it is important to have such people in your life who trust you and will do business over the phone so quickly. Your JV relationships are important as well as your reputation. If you currently have JV partners be sure to be in good standing with them as well as any other money lenders you have. You never know when you may need their assistance.



So even though I nnow have cash to close the deal, my work is not yet completed. I still need to find a JV partner and / or qualify for a mortgage myself. All I have done is bought myself time at the cost of $$. So attention reptile brains!!! Heed my words!
 
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