real estate investing – Hard Money

September 13, 2012
Shawn Molem
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What Does It Take To Be A Professional Investor?

Tags : analysis learning estate investing estate investor hobby investor hobby investor professional hobby investors incredible terms investor professional investor professional investor professional investor real estate real estate investing real estate investor

Category : Hard Money Loans , Real Estate Loans

With current mortgage problems and the market on a constant roller coaster when is the right time to become a real estate investor? What is do successful investors know that the hobby investors fail to recognize? Who can we listen to get solid investing advice that will help me achieve my investing goals?

The first rule of thumb when it comes to becoming a professional real estate investor is buy low and sell high. Wow what a break through concept! Lets take a look at what the reality is. Right now as the real estate market is tanking, according to some people, the professional are starting to come in and buy everything up. What are the hobby investors doing? They are panicking and dumping their high priced investments that they bought right before the market tanked.

The professional investors are getting wholesale priced real estate at incredible terms. The hobby investors are giving away their properties at incredible terms, lease options, rent to own, no bank qualifying etc. This isn’t exclusive to real estate…the same thing happens with the stock market and the hobby investors always wonder why they are losing money. The hobby investor waits that the market is going up and looks like a safe risk before jumping in the game. The professional investor makes up the rules to the game and makes money on the follies of those that don’t understand what the rules are.

Buy low and sale high. Why is that concept so difficult to grasp?

To move from hobby investor to professional investor you first need to determine your own personal why. Why you are investing. Why you are willing to learn the game. Why are you willing to risk the little or lot that you have acquired over your life? Once you have determined your why then you need to solidify in your mind that you are going to do whatever it takes to reach your goals, but more importantly that you are going to do it right. Cutting corners is never a good idea especially when you don’t know where the corners are.

From there you need to assess what tools you already possess and what you need to learn and then be determined that you are going to get the investing education that you lack. You can do this in two ways. Trial and error or get some help. Trail and error is a very difficult road to take, trust me I know. It is only a mater of time before you will make a critical error that will end up costing you more than you want to pay. For some, trail and error has cost them everything (house, cars, family etc.).

For your sanity and your families well being work with a mentor or a coach. Start by looking in your local investment club for a mentor. Yes you will have to get off of the easy chair to become a professional investor. If you don’t have confidence in the mentors that may be available look for a real estate investment coach. Make sure that the coach that you get is working the program that they teach and is already successful. There are many programs out there and their focus may not be real estate investing so make sure that they are focused on real estate investing and that they will guarantee a return on investment.

The areas that are critical for a successful real estate investing career are first and foremost do your due diligence. Due diligence includes market analysis (learning what the market is doing, what areas are good for rentals, which are good for rehabs, etc.) and property analysis (learning to run the numbers on what the true costs are of buying a property and what the net will be at the end regardless if it is a rental or a rehab). Then you must understand negotiations (creating win/win agreements), creative financing (using other peoples money to make you money), contracts and offers, property management, and the tax benefits.

If there is one thing that I want you to take away from this article is to develop a team of professionals around you. That team will include real estate specific accountant and attorney. An experienced property manager, real estate agents/brokers and finance people (mortgage brokers, hard money lenders, etc.). Be the dumbest person on your team, meaning work with highly skilled and intelligent people that will increase your investing IQ. If you are the smartest person on your team then it is time that you change the team players because they won’t be able to help you.

If you are thinking to yourself right now that this sounds like too much work then do yourself a favor…stay away from real estate investing because you will lose money. Once you have master these areas then you will understand that professional investors can make money in any market. You will quickly move out of being a hobby investor into becoming a professional investor and allow yourself to reach your goals your reason why. That reason why is why you are doing this in the first place.

September 13, 2012
Shawn Molem
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Hard Money Lending Success – It’s All About Relationships

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.

September 12, 2012
Shawn Molem
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