Category Archives: Residential Loans

Home loan refinance FAQs

Category : Real Estate Loans , Residential Loans

What is refinancing?

Refinancing lets you change your home loan to suit your new circumstances. Mortgage Choice recommends an annual  Home Loan Health Check to assess whether the original home loan you chose is still the most suitable option.

How does refinancing work?

When you take out a new loan, you use some or all of the funds to pay out your existing loan. The new loan often comes from a different lender, but many people refinance with the lender they’ve been using for years. If you move to a new lender, that lender will take care of paying out your existing loan.

If you are unsure whether refinancing is right for your current situation, refer to our refinancing checklist. Check out our latest Refinance Home Loan Infographics too for more details.

What type of things do people refinance for?

Home loan refinancing may be used for different reasons including:

Renovating your home or other home improvements such as a pool.

Paying off your debts such as credit cards by rolling them into your home loan.

Obtaining a cheaper rate, even if it means giving up a few loan features.

To raise cash for a purchase such as a car

You are paying a high interest rate – for example, if you arranged a low-start, rising-rate loan from your home builder.

You want to switch from a variable rate to a fixed rate, perhaps because you can want to reduce the risk of higher repayments.

How will refinancing benefit me?

Refinancing can be a smart way to manage your money. Here are a few reasons why you may want to refinance:

To get a peace of mind with a fixed rate

To obtain a lower interest rate so as to reduce your monthly payments

To gain the flexibility to pay off your loan faster

To consolidate credit cards, personal loans or other debts to reduce your interest rate and monthly repayments

To unlock the equity in your current property to finance a renovation, purchase an investment property or free up some extra cash.

Why Choose Wholesale Real Estate Investment?

Category : Home Loan , Real Estate Loans , Residential Loans

The real estate business is no different with any other business when it comes to selling. Wholesale real estate investing is also one way of paving your way to future financial success and security. You purchase in bulk for a cheaper price and sell it in retail for a profit. There are many opportunities in wholesale real estate which other people are not aware of.
What is a wholesale real estate investor?
A wholesale real estate investor don’t need have a lot of cash on hand or even worry about credit. The strategy is to find a property and put it under contract, then transfer the contract to a retail buyer – assuming of course that there is already an available retail buyer. Home building is not necessary for the wholesaler since all he is doing is just to facilitate paperwork. He can have as many deals as he can, not considering how much money he starts out with.
Marking up your wholesale property
The only thing you do is to transfer property ownership. You do not need to rehabilitate the property – meaning, you are not going to acquire the property, fix the plumbing and wiring, paint the walls and plant the area. You do not have the same burden as that of the retail investor. The only investment you have is time – which could only be in a matter of days. This means you can sell the property on a lower margin, leaving some amount of profit for the rehabbing investor you’re going to sell to.
How do you close on a wholesale investment?
There are a number of choices on closing a wholesale real estate deal. Here are some of the options:
Option #1: Assignment. Assign the contract to your buyer and they close the deal. This is a viable alternative choice since you give up control, cash in money and let them do the work.
Option #2: Close on the contract. This requires your ability to close, meaning you invest some money – and later close with your potential buyer. But, if you don’t have available financial resources to close, maybe you will need “hard money”. Timing for a resale is also essential in this option.
Option #3: Double closing. This means you close the buying and close the sale at the same time. You close with the Seller and then with the Buyer, or you could reverse the process. Two closing statements and two deeds. The Seller deeds the property straight to the Buyer, thus you stay out completely on the chain of title. You can have both parties do this at the same time and place, so everybody knows how much money you’re making – or you could do this separately for both parties by time or place.
However you close in on the deal, it is important to leave a profitable margin for your retail buyer. This is a buy low – sell low market. Avoid getting greedy.
Knowledge, patience, good eye for potential properties and a good number of contacts are your key ingredients for wholesale real estate investing. Learning the trade and doing well in the trade of real estate investing takes a lot of years of getting used to, but once you have established your identity, wholesale investment is one of the greatest opportunities there is.

When Should You Sign A Contract for a Purchase or Sale?

Category : Home Loan , Real Estate Loans , Residential Loans , temp

If you are a seller, the usual inclination is to sign a contact as soon as possible with a buyer. This will lock in the sale of the property and get a deposit in your hands that may or may not be refundable depending on the terms of the contract.

However, what if your buyer wants an inspection period of 5 – 10 days and he also wants conventional financing instead of paying cash or using a hard money lender? The problem is that by signing a contract you have locked in a buyer who may or may not actually be a buyer.

The inspection report will likely come in with things that need to be fixed and the prospective buyer will try to renegotiate his offering price. This re-negotiation can be expected and you should do it yourself if you are an investor trying to get the best price possible. If the inspection is for 5 days, your property will essentially be off the market for this time and you may or may not have a deposit in the closing agent’s escrow account.

You can take back-up offers but investors are reluctant to make back-ups, especially when they find out another investor declined to take the property. Back-up contracts do work, but they are a distant second choice when selling a property.

At the end of the inspection period, the buyer decides not to purchase the property and gets his deposit back – if he made the deposit. Next you will be faced with the issue of cancelling the buyer’s contract. You still have a contract that you may believe to be invalid for various reasons, but you should get a cancellation of contract to keep the former buyer from coming back after you sign a second contract.

If you don’t think this can happen, you haven’t been in the business long enough. Usually, the cancellation is signed when the escrow money is returned to the buyer – again, if he put up the escrow. Some investors will stall putting up the escrow because they don’t have it and are trying to resell the property and use the end-buyer’s deposit to cover his deposit. This is standard operating procedure for most wholesalers so be prepared for it.

Because of this subversion, I have taken a different tact in getting a contract signed by a buyer. I ask the buyer to do his inspection first before I sign a contract and when he completes his inspection and re-negotiations, he signs a zero-day inspection contract. His escrow check must come with the signed contract or wired into the closing agent. The escrow is now non-refundable and you have a “reasonably” legitimate buyer.

The buyer may still not close but you will receive compensation for your work. The buyer may have resold the property to another investor who decided not to close. Your buyer will lose his deposit and so will the end-buyer. The end-buyer’s deposit is being held by the investor and should be twice what his deposit is so the investor will make money even if he doesn’t close.

These tactics are not unscrupulous, just good business practices among investors. If you are on the receiving end of not closing, you can get frustrated because you have carrying costs that go on and you have to start marketing your property all over again. My solution of not signing a contract until I am comfortable that the inspection period is “over” and I have money in the escrow account doesn’t insure the buyer will close but it goes a long way toward a solution.

The other potentially huge benefit is that a new buyer coming in with a stronger offer (higher price and bigger escrow) is common. In this situation you have the opportunity to re-negotiate with the original buyer or just take the stronger offer. The first buyer will complain that he had to pay for an inspection, but he would have had to anyway whether or not he accepted your contract.

Professional investors very seldom hire an inspector because they have the experience to do it themselves. If you get a higher offer and you aren’t under contract, don’t be intimidated that you shouldn’t sell it for more – this is a business and should be handled in a businesslike manner.

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.

Residential Hard Money Loans – 3 Crucial Fundamentals!

Category : Real Estate Loans , Residential Loans

I am 100% sure that you would not like to end up in a default situation.

But before I discuss all that stuff, I would like to ask some very important questions…

1. Are you aware about the factors that make residential hard money loans different from the others?

2. Are you aware of the basic difference between bogus and real residential hard money lenders?

I would really like you to stop here for a moment and think meticulously about these two questions. And if you are not able to answer them as “yes”, then you can’t get success as a real estate investor.

So without wasting further time, let me answer these questions because they are the first two crucial fundamentals, which you should know before getting a loan.

What is the basic difference between residential hard money loans and others?

Majority of people will start by asking the interest rate or payment terms and conditions while analyzing this question. But they aren’t the most important factor.

The most important factor here is the criteria, which a lender uses while funding a loan to you. If he is asking for a credit score before giving you a loan, this means that they are following the traditional lending rules and they will sell your paper to banks or Wall Street.

These loans do not have any sovereignty or flexibility, which is vital if you want to be successful as a real estate investor.

What is the basic difference between real and fake residential hard money lenders?

There are different aspects which need to be considered while answering this question. One of the aspect was hidden in my answer to the last question i.e. a fake hard money lender sells your paper and don’t fund you directly. This is really bad for you as a borrower. Let me tell you how…

If you are working in a fix and flip situation, there are many things which can go wrong, whether you have planned for them or not. In this situation, it is very important to work with a true lender whose success is attached to yours.

But if your loan has been sold off to Wall Street, you could do nothing in a problematic situation. You cannot ask for loan extension or anything else and there are chances that you will end up in a default.

There is another type, which is known as fee collectors. These are the people who call themselves a lender but they are not. They will just help you in submitting a loan application and pay fees. After that, you will have to submit your loan request to the real lender.

These fee collectors don’t care whether your loan application gets approved or not because they have collected their non refundable fees.

You must be wondering what the third crucial fundamental is.

If you really want to be successful as a real estate investor, you need to have a perfect plan to execute. You need to realize that real estate investment isn’t for faint-hearted. It is for those who have a lot of guts and courage. These are the people who can take quick action and can do things in a short span of time.

Another important aspect is that hard money loans are short term and if you are unable to pay it off in time, then you can get in a trouble situation.

So, these were the three crucial fundamentals, which you need to understand before applying for residential loans.

« Previous Page — Next Page »

Recent Posts

Recent Comments

    Archives

    Categories

    Meta

    Website Pages:
    Contact Details:

    Tel: (310) 734 4044
    Fax: (310) 734 4055
    Email: info@magnaloans.com

     

     

    Address:

    Magna Capital Group, Inc
    8730 Wilshire Blvd., Suite 410
    Beverly Hills, CA 90211

    Although Magna Enterprises, LLC and Magna Capital Group, Inc. are referred to throughout the text of this website as Magna Group of companies, they are not affiliates, parent or subsidiary companies as both companies are separate and distinct entities. Any questions or issues regarding this disclaimer should be addressed in writing c/o Shawn Molem.

    Magna Capital Group, Inc™ 2020| California DRE License # 01866646 | Nevada DRE License # RE.1450801 | NMLS ID # 342925