Monthly Archives: January 2013

Wholesalers Can Easily Become Short Sale Experts With Transaction Funding

Category : Hard Money Loans , Real Estate Loans , temp

Wholesalers are generally the on the front line when it comes to real estate investor leads. Wholesalers are usually advertising driven and as such motivated sellers often contact them first before contacting anyone else. With the prevailing Short Sale business out there it only makes sense for a wholesaler to expand there business into Wholesaling Short Sales.
As a wholesaler for the past 6+ years I always hated doing short sales. During the boom, banks just did not make it easy at all to complete a short sale. Today all that is different. The issue that arises is having money for back to back closings. Title companies do not want to have their business on the line anymore so you can make a quick $10,000+. That is where Transaction Funding comes in.
With the market drop that we have all experienced there are far fewer motivated sellers that have enough equity to qualify for straight up Wholesale deals.
The rise of the internet has put the information into more people’s hands creating more competition for wholesalers.
Short Sales are much easier to get bank approval on at this point. As a wholesaler you should monetize as many of your leads as possible. Short sales allows that to happen much easier now.
I passed on hundreds upon hundreds of leads over the years due to the fact that I didn’t want to deal with the banks. Today, with Transaction Funding, you are able to get beautiful properties at a huge discount with short sales.
The best way to make money on most properties is to assign the contract. With a short sale you have to close and then sell. Pretty much the same thing. The only difference is you have to actually have money to close the actual short sale.

How to Buy Real Estate With No Money Down – 5 Simple Strategies

Category : Hard Money Loans , Real Estate Loans

Have you ever found yourself presented with a great opportunity to buy a property, but lack the funding? If I only knew how to buy real estate with no money down, I could have made a great deal. Well it is possible to purchase property with no money down. Here are a few no money and no credit strategies to help you in acquiring some deals.
Double closing – This is where the investor will buy and sell a property at the same time. The title is normally held in escrow to allow the investor to use buyer’s money to pay seller.
Buying Subject To – Simply take over someone else’s existing financing, that is already in place. This is works well because there is no qualifying for the buyer, and the loan is not formally assumed. Buying a property subject to existing terms, can be a fast and easy way to pick up instant cash flow.
Borrow Hard Money – You can expect to pay a little more for the money, but the loan is based on the equity in the property, and not reliant upon your credit worthiness. Hard money can be great for flipping homes, but be sure to do your homework, both on the lender and the property you plan to purchase.
Assign a contract or Finders fees – This is where you sign a contract to purchase, and then sell the contract to an end buyer for a fee. This strategy works well because it takes very little money to perform. Building a buyers list first is the best way to work this strategy. As you learn this strategy, you will find that there are many great deals for sale, so if you are going to sell these contracts, you need to have plenty of buyers lined up to take them off your hands.
Seller Subordination – This is where hard money is borrowed in conjunction with a subordinate, seller held second loan in order to provide the seller with a lump sum of cash at closing. Basically you are borrowing a portion of the purchase price, and financing the remainder of purchase price with seller. This will leave you with to notes to pay. One to be paid to hard money lender, and one to be paid to the seller who is carrying the rest of balance on a separate note.
These are just a few strategies that can help you purchase real estate with no money down. When you are first getting started, cash and credit can be a problem, but it can easily be worked around implementing creative techniques such as the ones above.

How To Finance Real Estate Investing Deals

Category : Hard Money Loans , Real Estate Loans

In order to be successful in real estate investing, you must be able to finance your deals. When you know which financing options you have available, you are able to structure your deals accordingly.
This article explores the financing options you have in real estate investing.
1) Buying with little or no money
Whenever you can buy houses with little or no money, you can have potential to do unlimited number of deals.
An example of such deals is wholesale deals. This involves buying a house for a low price, then you turn around and wholesale it for a higher price. There are two ways you can do this.
Contract Assignment:
You put a house under contract at a low price. You get this contract to your title company or attorney to do title work. You then turn around and assign this contract to another real estate investor who closes the deal.
You walk home with an assignment fee when the deal closes. The terms of the contract assignment are clearly defined and state how much your assignment fee is.
Simultaneous closing:
You put a house under contract to buy, then locate another real estate investor to flip it to and you sign a contract with you as the seller.
You end up buying and selling the house at the same closing table. Your profit is the difference between your buying price and selling price, less any closing costs.
2) Hard money
These rehab loans have a short time frame, such as 6 to 12 months. They carry a high interest rate, and are based on equity on the property, not personal credit.
It can be available fast, sometimes with a few hours or days.
3) Creative financing
This includes techniques like lease options, owner financing, etc, that do not involve putting buying the property for cash. It might be necessary to put some money down, but finance part of the deal through creative financing.
This can be a big money maker and can allow you to do numerous deals without being limited by money.
This technique will not work when the property needs repairs, or when the owner wants all cash for their property.
4) Revolving credit
This can be a line of business credit, credit cards, etc. They require monthly payments which can get high, and the interest rates can also be high.
You can have limited amount of credit and the number of loans you can get.
5) Private lenders
Private lenders are individuals with cash they can invest. Their money is secured by real estate and are willing to invest it to get higher returns than they can get on bank investments like CDs.
Private money is the most preferred type of financing for real estate investing deals.
6) Mortgage loans
You can also finance real estate investing deals with traditional bank mortgage loans. These come with low interest rates with terms about 15 to 30 years.
However they can require that you put 10 to 20% down. They are based on your credit scores and you are limited to the amount and number of loans you can borrow.

Real Estate Funding – Hard Money

Category : Hard Money Loans , Real Estate Loans

Real estate funding using hard money can make all the difference when it comes to real estate investing.
This is how I fund 85% of my deals using hard money lenders.
What are hard money lenders you ask?
These types of lenders are private investors who lend you money based on the property itself. Unlike conventional lenders where they want to check your credit and verify your income, these lenders only care about the deal.
Here’s how it works. Most hard money lenders will lend up to 70% LTV. (loan to value)
Basically speaking these types of lenders will loan you money up to 70% of the fair market value.
Let me give you another example using round numbers. Lets say you found a distressed property that you know is worth $120k FMV or ARV (After Repair Value)
If you take $120,000 ARV and multiply it by.70 you come up with $84,000.
In order for the investor to fund your deal you must purchase the property for $84,000 or less.
Buying the property at 70% of the market value protects the lender, that way if the deal goes bad for you the lender can take back the property and still generate a massive profit.
Note: Once you’ve been able to establish a relationship with a lender, under no circumstance should you ever allow a deal to go bad. Treat these types of investors as if it were your own money you were investing. That’s why I always recommend you educate yourself first and then take action.
In today’s market you can find tons of real estate deals for even less than.70 cents on the dollar.
Expect to find deals between.30 and.65 cents on the dollar. They’re out there trust me, you just have to know where and how to find these deals.
What can you expect to pay a hard money lender for your real estate funding?
Every lender works in different ways and it can also vary from state to state, but generally you can expect to pay anywhere from 3 to 9 points, interest of 10% to 15%, and your repair costs.
A point equals to 1% of your loan amount.
Generally hard money loans are due payable in 6 month or less. That’s why it’s important you learn how to manage your flips correctly.
Also depending on how great of a relationship you’ve been able to establish with your lender and depending on how great of a deal you’ve been able to put together you can generally role your payments and rehab cost into the loan.
Basically speaking you might only need to come in with the closing cost up front and points.
Remember, find the deal first, then work out the numbers with your hard money lender.
Where to find real estate funding with hard money lender?
Hard money lenders are everywhere, but the easiest way to find them is to do a search on the internet.
Go to your favorite search engine, type in the name of your city along with hard money lenders. Normally a list will pop up in the S.E.R.P.S.
Go down the list from top to bottom and give them a call.
Don’t bother wasting their time if you don’t have a property. Like I said before their mainly interested in speaking with you, if you have a property already under contract.
Real estate funding using hard money lenders can put you a step ahead of the competition.

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