Building Your Real Estate Investing Team

Building Your Real Estate Investing Team

Tags :

Category : Hard Money Loans , Real Estate Loans

To be successful as a real estate investor you will need a “team” of professionals that you can rely on. You do not need to build this team before you start investing. As you progress in your investing career you will meet many people in these fields that you will want to establish a working relationship with. Some team members will not work out and will have to be replaced. Don’t worry about this, as it is a normal part of the business. A great way to find your team members is through referral from other investors. Once you join a local real estate investors association you will meet active investors who will be able to guide you toward competent individuals in the business. One word of caution though – contractors have earned bad reputations. Therefore, most investors will not share their “best” contractor for fear that he will get to busy to do their work. Expect to have to sort through many contractors if you decide to do any rehab work. This team will be needed to successfully close your purchase and sale transactions. Not all members will be needed for every transaction but knowing they are in place will increase your confidence level.

Investor Associations

Most cities have a real estate investors association. You should visit the associations in your area and join one that you are comfortable with. Through these organizations you will find educational opportunities as well as networking opportunities. Attend as many of the educational programs as you can. This will help you to become more comfortable with each area of investing. The more areas you have knowledge in the better equipped you are to be able to meet the needs of sellers that contact you. Through networking at the association meetings you will be able to find many of your team members. You will also find other investors who will be interested in deals that you do not want. You can always pass these deals along for a bird dog fee or an assignment fee.

Wholesalers

You will find many wholesalers at association meetings. If you decide to rehab or rent property, a wholesaler will be a valuable source of property for you. They will spend the time and money to find the deal and negotiate with the seller. This allows you to spend your time managing your rehab or rental property. Make sure you verify their ARV (After Repair Value) on the property as well as their repair estimate. As long as the numbers work, you should not mind paying them their “wholesale fee”.

Real Estate Agents

Most real estate agents are not interested in working with investors. This is because they are trained to make “full price offers” on listed property. In every area there are a few agents that do work with investors. These are usually the most successful agents in the area. They understand that a good investor client means easy repeat business for them. You will find these agents by looking at who has the most listings in your target area as well as word of mouth at investor association meetings. These agents are very busy so it may be difficult to establish a relationship with them. However, it is well worth the effort in the long run. They are especially needed if you decide to be a wholesaler. They will have access to most of the bank owned properties.

Real Estate Lawyers

You will need a strong real estate attorney on your team as soon as possible. This person will handle closings for you as well as title searches. They can also give you legal advice as you run across unfamiliar situations (such as a seller in bankruptcy). You should make sure that your attorney specializes in real estate.

Lenders

There are three main type of lenders that you will be dealing with:

Hard Money Lenders – Based on ARV of property, your credit history and close quickly

Conventional Lenders – Based on your credit, current property value, slow closing

Private Money Lenders – Based on your relationship with the individual

You will find all three types at most association meetings. When you are beginning your investment career you will most likely be working with a hard money lender. They are called hard money lenders because they charge pretty hefty fees to make the loan. They will usually loan up to 70% of ARV for a period of 6-12 months. They typically charge 3-6 points up front to make the loan (each point is 1% of the loan amount), interest rates of 12-18% and will hold repair money in escrow to be paid out as repairs are completed. Although these fees sound expensive they really aren’t. It is much cheaper to borrow from a hard money lender than it is to take on a money partner and give up 50% of any profit made. See the following simple example for a comparison using a 6-month holding period, 3 points upfront and 12% interest and a final sales price of 5,000:

Loan From Hard Money Lender

Sale Amount 145,000

Loan Amount 100,000

Points to Lender 3,000

Payments to Lender 6,000

Partner Split 0

Net Profit 36,000

50% Money Partner

Sale Amount 145,000

 Loan Amount 100,000

Points to Lender 0

Payments to Lender 0

Partner Split 22,500

Net Profit 22,500

As you can see, hard money lenders are not as expensive as you thought!

You will probably only use a conventional lender when buying long term rental property. Conventional lenders will be necessary when you sell property to homebuyers. A good mortgage broker will be able to find financing for buyers with a variety of credit issues. An average broker will only be able to finance buyers with perfect credit. Make sure you look for brokers who can find financing for people with “A”, “B” and “C” credit. Once you have established a track record as a successful investor you will be able to attract private investors. These are people who have money that they will loan to you in order to get a better return than a bank or the stock market will give them. You can replace hard money lenders with private lenders and stop paying the upfront fees. You may also be able to negotiate a lower interest rate than the hard money lenders charge.

Insurance Agents

There will be two main types of property insurance that you will need. These are “Builders Risk” and “landlord” insurance. When you are dealing with a vacant house that is under repair you will need “Builders Risk” insurance. Builders risk insurance will cover the property and usually the materials being used during the rehab (in case of theft). It is more expensive than a landlord’s policy because of the increased risk. A landlord policy will cover the property only, not the contents. Your renter will need to have a renter’s policy to cover their belongings. Landlord policies usually will not cover vacant property or property under repair. Most agents do not sell both types of policies. Make sure to acquire the correct type of policy so that you are always covered.

Hard Money Lending Success – It’s All About Relationships

Tags :

Category : Hard Money Loans

For those who are new to real estate investing, it often seems as though there’s an “inner circle” of deal makers-the people who know where the deals are, how to get the money to buy them, and always get there first. It’s no accident that the same real estate investors work with the same hard money lenders and private lenders again and again. They’ve built a successful relationship based on helping each other to make money-and anyone can do this!
Seasoned pros who have built incredible wealth through investing in real estate know that their relationships with hard money lenders is key to finding the good deals before everyone else, and having a ready source of private money to borrow to purchase those properties.
Here’s how even the biggest novice at real estate investing can forge relationships that lead to more and more successful real estate transactions:
Have lunch with your hard money lender. Once you have found a good, seasoned hard money lender, invite him or her to lunch once every few weeks. And you can do this with a few lenders. Get to know them personally, as well as their restaurant preferences, and always pick up the tab. Over lunch, you can discuss what deals they’re working on, what you’re looking for-and you might even pick up a deal!
Of course, it might take several months of these lunches to produce any deals. But you’ll get to know more about their business (their lending criteria and what kind of deals they work on most often) and they’ll get to know your business structure too (for example, whether you invest as an entity or an individual, and whether you prefer to “flip” investment properties for a quick profit or “rehab” them before selling).
Share the wealth with your hard money lender. Once you know your hard money lender(s) well, you can refer real estate investment deals to them that fit their criteria. They’ll appreciate it, and most likely, they’ll remember that they “owe you one.”
Make the hard money lender’s job a little easier. You can do this by submitting a professional, organized loan package with compelling information about why the investment is a good idea and what your plans are-and why the lender should make a loan to you with confidence. Anticipate questions that the hard money lender or private lenders might ask, and answer them in the loan package.
Get to know the private lender too. Private lenders can be real estate professionals or savvy businesspeople, but very often, they are simply retirees with money to invest. They lend out their money and it comes back to them effortlessly in the form of mortgage payments-with much higher interest than a CD or money market account would pay.
But just because private lenders don’t have to be actively involved to collect their checks doesn’t mean that they aren’t curious about the deals they are funding. If you send your loan payments directly to the private lender, remember to always send them in early, enclose information on how the project is going (such as before and after photos), perhaps let them know how much profit you made, and thank the private lender for being a “partner” in your project’s success. That makes the deal more rewarding to them-and those private lenders will be more likely to help you with future real estate financing needs.
Work with the same real estate investing team of hard money lenders and private lenders for continued success. Once you have a successful investment deal or two under your belt, don’t forget who helped you get there! If it’s possible, work with the same hard money lenders and private lenders on other deals-doing so shows that you are a person of integrity and someone they can trust.
Real estate financing through hard money lending is not about your credit score, your income or even whether or not you’re gainfully employed. Hard money loans are based on asset value-the quick-sale price of the property you’re buying. And that means that anyone can be a successful real estate investor…as long as you have the right relationships.

Hard Money Lending Success – It’s All About Relationships

Tags :

Category : Hard Money Loans , Real Estate Loans

For those who are new to real estate investing, it often seems as though there’s an “inner circle” of deal makers-the people who know where the deals are, how to get the money to buy them, and always get there first. It’s no accident that the same real estate investors work with the same hard money lenders and private lenders again and again. They’ve built a successful relationship based on helping each other to make money-and anyone can do this!
Seasoned pros who have built incredible wealth through investing in real estate know that their relationships with hard money lenders is key to finding the good deals before everyone else, and having a ready source of private money to borrow to purchase those properties.
Here’s how even the biggest novice at real estate investing can forge relationships that lead to more and more successful real estate transactions:
Have lunch with your hard money lender. Once you have found a good, seasoned hard money lender, invite him or her to lunch once every few weeks. And you can do this with a few lenders. Get to know them personally, as well as their restaurant preferences, and always pick up the tab. Over lunch, you can discuss what deals they’re working on, what you’re looking for-and you might even pick up a deal!
Of course, it might take several months of these lunches to produce any deals. But you’ll get to know more about their business (their lending criteria and what kind of deals they work on most often) and they’ll get to know your business structure too (for example, whether you invest as an entity or an individual, and whether you prefer to “flip” investment properties for a quick profit or “rehab” them before selling).
Share the wealth with your hard money lender. Once you know your hard money lender(s) well, you can refer real estate investment deals to them that fit their criteria. They’ll appreciate it, and most likely, they’ll remember that they “owe you one.”
Make the hard money lender’s job a little easier. You can do this by submitting a professional, organized loan package with compelling information about why the investment is a good idea and what your plans are-and why the lender should make a loan to you with confidence. Anticipate questions that the hard money lender or private lenders might ask, and answer them in the loan package.
Get to know the private lender too. Private lenders can be real estate professionals or savvy businesspeople, but very often, they are simply retirees with money to invest. They lend out their money and it comes back to them effortlessly in the form of mortgage payments-with much higher interest than a CD or money market account would pay.
But just because private lenders don’t have to be actively involved to collect their checks doesn’t mean that they aren’t curious about the deals they are funding. If you send your loan payments directly to the private lender, remember to always send them in early, enclose information on how the project is going (such as before and after photos), perhaps let them know how much profit you made, and thank the private lender for being a “partner” in your project’s success. That makes the deal more rewarding to them-and those private lenders will be more likely to help you with future real estate financing needs.
Work with the same real estate investing team of hard money lenders and private lenders for continued success. Once you have a successful investment deal or two under your belt, don’t forget who helped you get there! If it’s possible, work with the same hard money lenders and private lenders on other deals-doing so shows that you are a person of integrity and someone they can trust.
Real estate financing through hard money lending is not about your credit score, your income or even whether or not you’re gainfully employed. Hard money loans are based on asset value-the quick-sale price of the property you’re buying. And that means that anyone can be a successful real estate investor…as long as you have the right relationships.

Real Estate Investment Financing

Tags :

Category : Hard Money Loans

So you’ve made the calls, you braved the elements and headed out to look at properties in search of the deal and now you’ve found it. The next step is to determine which method of real estate investment financing you will use.

It depends a few things like whether you want to hold onto the property or resell it quickly or how much cash you are putting into the deal and how much you are borrowing. It depends on what your credit looks like.
Will you want monthly interest payments or do would you prefer to pay on the back-end. Should you use your cash or someone else’s cash?
Much of this will depend on your strategy and personal resources.
Real estate investment financing can take many forms. I’ll break it down simply into three categories.
Bank Financing
If you have the credit and the necessary down payment, you can get a loan from a bank or mortgage broker. When going this route it is important to make sure you factor in monthly costs such as taxes and insurance and make sure your budget will cover the monthly note.
Six months of mortgages with no income can strip all your profit out and leave you working for nothing.
If you’re buying rehab-grade property the bank might get picky, since the property will be their collateral after all. They might not like the idea of financing a property that isn’t reasonably habitable.
Another thing to keep in mind with banks is that you will pay a higher interest rate on non-owner occupied loans
Cash
Cold, hard cash is King when buying properties below market value. The ability to act quickly and not wait for bank approvals is key to acquiring distressed property or other-wise untouchable property.
If you don’t have your own cash for the deal, you can use a hard money lender.
Hard money lenders will be local investors most likely but there are some mid-size companies in the hard money business. Most will charge close to double the interest rate a bank will, plus extra points for funding the deal.
Many hard money lenders are long-time real estate investors that have branched out and will understand the process better than most bankers. They will care less about your credit than they will if you have a good deal or not.
Hard money lenders will only do business with you if you’re buying the property at or below 65-70% of the After Repair Value.
Another route is to find your own private investors to put up the cash and split the profits on the back end. Give the investor a 1st position on the property as collateral.
In this way, both private investors and hard money lenders can potentially make more money if you default by foreclosing and completing the project themselves.
Creative Financing
Many real estate investors specialize in buying homes with little or no money down.
They achieve it through a variety of ways that fall under the umbrella of “Creative Deals”. They’re usually situations in which the owners are in distress due to foreclosure, bankruptcy, divorce, or any other situation that creates urgency to sell quickly.
Methods include the Lease-Option, in which you lease the property with the option to buy later. You can assume the existing mortgage. In some situations the owner of the property can simply quitclaim the deed to you in exchange for taking over payments.
With creative deals make sure you have a good real estate attorney on your side making sure your doing everything legally and that all parties are well informed of their rights.
Any of these methods can allow you to finance or gain control of the property so you can then apply your strategy for wealth, whether it be renting it out or reselling.

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

Tags :

Category : Hard Money Loans , Real Estate Loans

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.

« 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