Category Archives: Hard Money Loans

Why You Should Use a Realtor to Find Your Investment Real Estate

Category : Hard Money Loans , Home Loan , Real Estate Loans

Once you reach the point that you seriously want to start investing in real estate, it’s time for you start searching for the real estate investment that best fit your investment goals.
In this article, I want to discuss why it could benefit you to develop a working relationship with an investment Realtor to help locate investment property, the qualities you should look for, and how you can find that person.
Why Use a Professional?
Let’s start at the top. Why would you want to use a real estate professional when you can find your own rental properties?
Foremost, because the right Realtor can guide you from your initial goal setting phase through the selection, acquisition, and subsequent management of your investment. They can direct you into investments you may not have discovered on your own and then negotiate the purchase for you (generally more easily than when a buyer and seller meet face-to-face).  Moreover, they are equipped with the tools like real estate investment software and the expertise to help you crunch and interpret the numbers.

Who is a Right Realtor?
Most importantly, you are not looking for a licensed agent who sells houses for a living without ever having become active or knowledgeable about investment real estate. You do not want a house salesperson with no or minimal clue about rental property.
You want an agent who works full time in the business and not only understands and practices real estate investing, but also knows the market.
The Realtor you want understands investing and is familiar with such things as taxation, depreciation, financing and tax-deferred exchanges. You want a specialist who can create rental property cash flow, rates of return, and profitability analysis presentations and then help you to interpret that data against your investment goals. A real estate investment might be the largest sum of money you will ever spend, and you want a broker who not only cares how you spend your money but also handles it amply as if it was their own.
How to Find the Right Realtor
You can locate agents in your area qualified to work with investment property in any number of ways.
Contact the brokerages and ask if they have an investment specialist in their office with background education in real estate investing; contact the CCIM Institute; contact the MLS and see who regularly lists rental property, the local Board of Realtors, and maybe a local appraiser, property management firm, or perhaps a friend or colleague who has been investing. You should have little trouble building a short-list of potentially qualified candidates that specialize in commercial and investment real estate full-time that you can meet with and interview. How you make your selection afterward will probably boil down to chemistry; whom do you prefer to work with.
As an investor, especially if you are a first time investor, you will discover that having a good investment specialist on your side will truly benefit your investment goals and well worth your effort to locate one and utilize their services.
Here’s to your real estate investing success.

Success Secrets To Building Real Estate Wealth Fast

Category : Hard Money Loans , Real Estate Loans , Residential Loans

What do successful investors know that you don’t know about creating real estate wealth fast?

Do they know something about creating real estate wealth fast that you don’t? Are they smarter than you? Do they have contacts that you don’t? Do they have some kind of real estate wealth crystal ball?
The answer to all these questions is NO!
Look, I’ve spent years in real estate learning the system. I’ve read books, gone through expensive real estate training programs, attended seminar after seminar on how to build real estate wealth fast, and traveled around the country and even internationally.
Pretty much all of this was a huge waste of time and money.
I’d like to share with you tips based on my own personal, proven, hands-on experience from actually working, investing, and building wealth in the realestate market for almost 25 years.
First and foremost, if those guys (and gals) that you thought were smarter than you can do it, So Can You.
The nice thing is, you don’t need to waste your time and money – like I did – reading tons of books, going to real estate classes (more on that later), and pouring money into real estate wealth seminars taught by people who really have no clue about what they’re doing.
Just Do It
Just get out there and do it. Get your feet wet. Test the waters.
Stop thinking about it, stop making excuses, and Start Doing It.
You Do Not Need Big Bucks
Even in today’s market there are lenders willing to do deals.
One option is a hard-money loan where you can finance your property on a short-term basis. Hard money lenders typically lend around 50% to 60% of a property’s value and the interest rates can be in the double digits.
But remember, this is a short-term, fix and flip financing strategy.
After you close the deal on your property, you’re going to want to rehab it quickly, get it rented, and either hang onto the thing to build your real estate wealth using the on-going, long-term cash flow, or do a fix and flip and sell it to another investor, or maybe even do a lease-purchase to the tenant.
If you decide to hang onto the property you’ll need to make sure that you have financing in place to buy-out the hard money lender so that you’re not stuck with a high long term interest rate.
With this exit approach, make sure you’ve been pre-qualified and pre-approved for your take out financing before you commit to the property.
One of the keys with this approach is to have your exit strategy figured out before you actually own the property.
Believe me, you’ll sleep a lot easier at night knowing that you’ve got another take-out investor lined up when your rehab and leasing is done, or that you’ve got your refinancing already in place!
If your predetermined exit plan is to cash out when your work is done, consider using a tax deferred exchange, aka a 1031 exchange, to defer any potential property gains taxes and have your entire profits on your first deal available to invest in your next deal.
It may not be a bad idea to have your next deal already lined up.
It’s always a good idea to talk to your tax advisor about tax deferred exchanges. Again, do your homework first, and do this before you actually close on your first deal.
Know your exit strategy and always having a Plan B are critical steps to building your real estate wealth fast.
Do Not Overpay For Your Real Estate Investment
I know you’re thinking that this is common sense. And it is.
But you’d be surprised at how many real estate investors I’ve watched get caught up in the emotion of the wealth building real estate chase and end up paying more than they’d planned on, or underestimating the amount of rehab needed to get the thing rented fast.
There are three good sources to determine a property value:
Your own research
Appraiser
Real estate broker
In that order. Nothing beats your boots-on-the-ground research and your intuition.
It’s always good to gather information from all three sources, then use your best judgment as to what price is a good deal for the property.

How to Find Wholesale Real Estate Deals – Including Short Sales

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Category : Hard Money Loans , Real Estate Loans

Wholesaling Defined
Acquiring a contract
Selling or assigning the contract
The assignment
You have to have brains, guts, and willingness to succeed in any business in life. Especially real estate investing. Now over thinking, making decisions that don’t make sense, and willingness with no actions will sink you as fast as anything else. The biggest part of real estate investing is absolutely taking action. Just studying or looking at numbers will not ever get you money.
Action is required to become successful in real estate investing. Offers – hundreds of offers. Yes, the average deal makes a person ,000, but you have to make more than ,000 per year to become successful.
Success goals for most people starting out is defined as ,000 per month. That is an average deal every month. If you don’t have 100 leads coming through your lead systems every month, you will probably not make k a month.
Why?
Numbers. Its all about the numbers. These numbers are taken from long term averages. Sometimes it takes more leads and sometimes less leads to become successful. Check out our findings based upon hundreds of thousands of leads:
100 Leads = 10 Quality Leads with Potential = 5 Contracts = 1 or 2 closings
Again, these numbers are our success numbers over the past 6 years. Everyone is different. Over the long term, you will find numbers similar to these.
What does all this mean?
You need more leads. Plain and simple. More leads = greater chance for closings. You don’t get paid until there is a closing.
Now my first wholesale deal ever was from the 3rd lead I came across. The numbers were great. 40% of the After Repair Value ARV was the number on the contract. The seller was an appraiser that needed to move fast.
The next deal took over 200 leads. It all averages out over time.
If you do not have enough leads, you need to get more.
I have used pre-foreclosure leads for the past 6 years as my main source of investment leads. I only dealt with people that enough equity to deal with straight up. I hated trying to work with banks. Just 3 years ago, banks would rather take the house back and repair it then sell it for top dollar than complete a short sale. Appreciation was the banks friend.
With the real estate crash and the banks owning too many properties, short sale deals are much easier to negotiate today.
Short sale deals make pre-foreclosure leads even more valuable. Banks have too many properties on their books and they actually save money by cutting their losses before they take the property back in foreclosure.
Rather than look for property owners that have 60% of their equity available, I look for properties that fit my criteria that are on the pre-foreclosure list. The banks general y will not negotiate a short sale unless the property owner is a few months behind.
A few months behind is where the foreclosure process begins. Pre-foreclosures are the cutting edge.
Many people will reach out before they hit foreclosure to sell their house. They realize they will not be able to save their house. You have to wait often times until they are far enough behind for the banks to accept a short sale. DO NOT advise a seller to stop paying their mortgage payments. If the banks find you doing this, they have the right to come after you.
I simply tell the seller that I can not help them due to their equity position, and since they are only ____ days late I cant help them either. If they were 90 days late I could…
No matter how you approach letting the property owners on the pre-foreclosure list know that you are interested in buying houses for cash – simple letters, postcards, knocking on their doors, reverse phone look ups and phone calls – you need to approach them. When you find your own deals, you make a considerably larger profit than if you have to cut someone else in on every deal.

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.

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