estate – Hard Money | Contact MCG, Inc.

January 18, 2013
Shawn Molem
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How to Find Wholesale Real Estate Deals – Including Short Sales

Tags : banks deal estate foreclosure make sale short

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.

November 8, 2012
Shawn Molem
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Private Money Lending – A Secret Strategy

Tags : arv estate gap hard hard money lending investors lending money need private private money lending real

Category : Hard Money Loans , Real Estate Loans

This is the second installment of the series, where I would be answering some frequently asked questions related to investing in real estate.

We got an awesome response to our last post about hard loans and we thought of doing this as long as people find it useful enough…

Today, I am going to discuss another important question, which is the reason behind most of the problems for those who are willing to get into the real estate investing game.

The question is: how to find money to do fix and flips?

Every month, we usually get around 250-300 loan applications. Most of them have never got their loans closed because the borrower wasn’t well informed about the procedure of hard money lending.

That’s why; I want to discuss this in detail to give you a better understanding. ARV or after repair value is the basic factor on which hard money lenders fund money and they won’t lend you more than 70% of the ARV.

That is the total amount they will lend for both purchase price and rehab costs. Then on top of this, you need to have money to pay the points and fees on the loan at closing.

If you want to get 100% financing with purchase price and repair cost, you need to buy a property on lower than the estimated ARV.

If you are buying an awesome deal as well, then also the points and fees during closing should be 00 at minimum. Most of the new real estate investors don’t understand that they have to put some money out of their pockets initially and they won’t get the cash instantly.

Another situation is that where investors aren’t purchasing the property at lower ARV, which could help them in getting 100% financing and there is a gap between the loans they get and the price they have to pay for purchasing and rehabbing the house.

Investors need to understand one thing clearly that yes, there is 100% financing available for them but that doesn’t mean that they don’t have to put any money down.

There are investors who could say that they are broke and they can’t take any money out of their pockets.

There’s one solution for them and only few experienced investors know about it and that is the combination of hard money lending with private money lending.

This gap which needs to be filled by the investors isn’t too big and for that you can take the help of anyone from your social circle. They can help you in this investment and you can give them a percentage of the profits in return.

If you’ll do it properly, then you can do your fix and flip successfully and you’ll make enough profits to move towards your next real estate investment deal. At that time, you won’t need any private money lending because you’ll have enough money from your previous investment.

If you are unable to find private money lending within your friends circle, then you can look for these resources over the internet. You can find private investors via different websites or forums or social media portals.

You need to find someone who could fill that gap for you. But please make sure that you understand their terms and conditions, otherwise there are many who would try to trap you.

September 19, 2012
Shawn Molem
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Private Hard Money Lenders – Choose the One, Which Suits You Best!

I want to talk about the core difference between private and institutional lenders. An institution is basically a bank or a credit union, which provides funding for different stuff.

On the other hand, private is more about a bunch of people, who works under a private organization, which works towards helping people buying and selling good deals by providing financing. They are not held by government or any other regional organization but they work by themselves and use their own money.

Now, we come down to two basic types of lenders in the world of real estate:

1. Institutional lenders

These are the hard money lenders, who are a part of a bank or any other federal organization and they work with them. Although, it is quite difficult to get a loan from them because they look at lots of things including the borrower’s credit history, job, bank statements etc.

These are only stuffs that institutional hard money lenders are concerned about. They don’t have a real estate background, that’s why; they don’t care much about the worth of a property. Even, if you have a good deal, they won’t lend you unless your credit or job history is satisfactory.

There’s a huge gap between institutional lenders and real estate investors, which isn’t easy to fill.

2. Private hard money lenders

Private money lenders are usually real estate investors and therefore, they understand the needs and demands of a borrower. They aren’t regulated by any federal body and that’s why, they have their own lending criteria, which are based upon their own real estate understandings.

Their main concern is property and not the borrower’s credit history or bank statement. The motto of private hard money lenders is simple: If you have a good deal in hand, they will fund you, no matter what. But if you take a crap deal to them, then they won’t fund you, even if you have excellent credit history because they believe that if you’ll make money, then only they would be able to make profit.

If you have found a hard money lender but he or she hasn’t got any experience in real estate investment, then they won’t be able to understand your deal. They will always think like a banker.

A true private money lender is one, who can help you in evaluating the deal and giving you a proper direction and funding if you find a good deal. But if the deal is bad, they will tell you straight away. Before rehabbing a property, they know what would be its resale value, due to their extensive experience.

The basic difference between institutional hard money lenders and private hard money lenders is that the institutional lenders try to have everything in place and perfect order. They want to have all the figures and the amount of profit they would be making. They completely ignore the main asset, i.e. the property.

Whereas, private money lenders use their own fund and experience to realize what’s store for them. They don’t try to sell the paper or recapitalize. They just look at the property and see if it is worthy enough to rehab or not.

In the end, they just want to make good profits along with the borrower. If anyone goes to them with a good deal, they will fund them. Some of them only fund for the property, whereas, others gives funding for the repairs too as long as they can see a good ROI.

September 18, 2012
Shawn Molem
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Getting Comfortable with Hard Money Investing

Tags : estate hard money hard money loan hard money loans home owner loan loans loans typically long provide market value money loan money loans property provide real estate

Category : Hard Money Loans , Real Estate Loans

Many real estate investors overlook hard money loans as a strategy for acquiring property. That’s because these loans are typically used by desperate property owners looking for a way out of the real estate market, rather than into it. But hard money can work for anyone, and it can be particularly useful if you’re a new investor looking to build your portfolio quickly.

Hard money loans can generally be described as high interest loans available to borrowers with any credit rating, as long as they can can provide solid collateral – usually equity in real estate, such as a home. These loans are almost never issued by banks or deposit institutions, but rather by private lenders who specialize in short term lending at high interest.
Normally a home owner in need of a big loan would apply for a second mortgage, using real estate equity as collateral, but bad credit can make things difficult here. If a home owner has missed a few mortgage payments, the banks may refuse to provide more financing – hard money might be the only option in this case.
The limit for hard money loans typically hover at about 60 to 70 per cent of a property’s quick sale value, defined as the price a lender could reasonably expect to realize if the borrower defaulted on the loan, and the property was liquidated fast. The interest rate for a hard money loan is usually in the 15 to 25 per cent range.
Investors can take out hard money loans to buy a property, as long as they provide acceptable collateral – in this case it could even be the property they’re buying. The strategy here is to find a pre-foreclosure property, or any real estate with an owner prepared to sell below below market value as long as the sale is fast. If the investor can re-sell the property at full market value, before too much interest is paid on the hard money loan, he or she can make a significant profit. Hard money loans have helped many successful investors get started in real estate.

September 5, 2012
Shawn Molem
0

California Hard Money Lender – The Ideal Solution and Great Source of Fund for your Real Estate Success

Are you into real estate investing but just having the problem maintaining your funds for its success? Are you having the difficulty in getting the loans that you need just when you’re in time of distress? What will you do if you are unsuccessful in getting funds through a conventional source for your real estate investment? An ideal solution is hard money loan.

Hard money loan is a short-term loan that you can use during situations such as acquisitions, turnarounds, foreclosures, and bankruptcies. Hard money loan is an asset-based loan for a short period. It is a very easy loan to obtain as you don’t need to qualify for the loan; it’s your asset that has to qualify. There are several hard money lenders in California who can help you out.

Today, hard money lenders have emerged as a quick access to the money required from private investors. Hard money lender firms provide funding solutions for homeowners, entrepreneurs, and real estate investors. The best thing about these firms is that they provide customized solutions as per your needs and circumstances and that too in a very fast and effective manner. Thus, these firms help you do away with the strict corporate banking policies, which very often lead to missed opportunities. In addition, since it is a private loan, the terms and agreements can be easily negotiated.

People having a bad credit history, no credit, unverifiable income, and those who have faced home foreclosure can seek the help from California hard money lenders. Although they charge a higher rate of interest than traditional mortgage home lenders, they are very prompt and efficient in providing loans in a very hassle-free way.

If you are planning your business in real estate investment in California and you are tired of hearing NO from banks, then don’t waste any more of your time. Go to a California hard money lender but make sure that you have a good plan for paying back the funds. California hard money lenders will give your business a competitive edge by providing quick funding options and hard money very quickly.

As there are several California hard money lenders, it is not very difficult to seek them out. You can look for them in directories. However, you must be careful in choosing the right California hard money lender to ensure your success. Some lenders may charge very high rate of interest and may not be willing to negotiate the terms and agreements. Remember that all hard money lenders are concerned about getting their loan paid back. So, the feasibility of the deal really matters to them. Hard money lenders take risk only because they expect good return.

How to Find Wholesale Real Estate Deals – Including Short Sales

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How to Find Wholesale Real Estate Deals – Including Short Sales

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Private Money Lending – A Secret Strategy

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Private Hard Money Lenders – Choose the One, Which Suits You Best!

-

Getting Comfortable with Hard Money Investing

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California Hard Money Lender – The Ideal Solution and Great Source of Fund for your Real Estate Success

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