Private Money Loans for Properties With Out-Of-State Owners

Private Money Loans for Properties With Out-Of-State Owners

 If you really want to be successful as a real estate investor, the most important factor is finding good deals. If you can’t find a good deal, your chances of securing a private money loan is very less because this is extremely important in the eyes of real hard money lenders. If you want to find good deals, you should consider it as fishing. There are different ways of fishing. Either you can fish with one pole or you can fish by using a long line and a bunch of hooks.

The same goes for finding properties. There isn’t just one famous way of finding good properties. You should try a horde of different strategies. You will definitely need a wide range of hooks inside water at the same time. One of them will certainly hit at something useful. You shouldn’t use a single fishing pole but a long pole with several hooks. The ideas I’m going to discuss here will not guarantee you private money loans but they are good enough to get you financing from private money lenders.

Finding properties of out-of-state owners is one of the best ideas for making you successful as a real estate investor.

There are many people who have to move to a different city or country because of their careers or personal requirements. All these type of people have one thing in common. They are willing to sell their property as soon as possible, so they can move to their new house in a new place.

On the other hand, there are people who have bought a property as an investment. But later, they realized that it didn’t turn out to be as they’ve thought. Management of these kinds of properties from far is another problem

There is another type of out-of-state owner property that has been left by your parents or grandparents after their death. The kids or grandchildren who are living in other parts of the country would like to sell that property in a jiffy to distribute their shares

All these things makes a motivated seller who is willing to sell their properties as soon as possible. It is your job to find a motivated seller like this because this is one of the few places where you can make good profit margins. The lenders would also be able to see that and they’ll fund you private money loans easily.

Two things can help you here:

1. Finding a motivated seller

2. Finding properties that are in need of repairs.

You can also find a list of out-of-state owners online or at the county recorder office. You can purchase the list or you can look at the tax roll and check the mailing address of tax notice. If the mailing address is different from the address of the property, this means that the property belongs to out-of-state owner.

You should start a postcard or mail campaign to out-of-state owners, who have a property and who are living out of that particular state where the property is located. You should try to get in touch with them immediately, so they are not approached by any other buyer.

This could turn out to be fruitful for you because these motivated sellers are already waiting for different offers and these campaigns can help them in finding some really good deals.

All the out-of-state owner properties are considered to be good opportunities because they can be bought at fairly low prices as compared to the normal deals because the sellers want to unload them in a jiffy. These properties hold good opportunities for investors as well as private money lenders.


Hard Money Lenders – The Secret of Successful Funding!

Actually, only a small number of lenders truly understands the whole concept of fix and flip investing and these private hard money lenders are categorized into the following five basic types:

1. Residential lenders

2. Commercial lenders

3. Bridge lenders

4. High end lenders

5. Development lenders

Amongst these five different types of lenders, you need to find out which lender is going to be suitable for your real estate investment. Generally people start by investing into a single family home, that’s why they choose residential hard money lenders.

But the basic difference between the lenders depends upon the source of funds. That’s why; they can be easily categorized into bank lenders and private hard money lenders.

Bank Type Lenders – If you are working with a lender who is providing you funding with the help of some financial institutions, where they will sell or leverage your paper to the Wall Street in order to get you money. These types of lenders will be following some rules and regulations specified by the banks or Wall Street.

That’s why, in order to get the loan, you need to follow these rules and regulations, which isn’t suitable for a real estate investor interested in doing fix and flip investing.

Private hard money lenders – These are the lenders who work on private basis. They usually work in a group of private lenders, who likes to lend money regularly. Their best quality is that they do not sell their paper to any financial institution or bank. They have particular rules and regulations, which are made to help a real estate investor.

Private Lenders That Are into Fix and Flip – You can easily find residential hard money lenders, who are really into fix and flip loans. Most of the real estate investors find it quite difficult to get financing for buying a property, which they have taken under contract.

And when they finally a good property and contact a lender for funding, their loans can get rejected on the basis of some neighborhood problems. Then the investor look for another property but the lender couldn’t fund them because of market depreciation.

In this way, an investor is always looking for properties. But some lenders don’t have enough money to fund their deal, whereas others are continuously increasing their interest rates, which can’t be afforded. Apart from all these issues, you can find lenders who are willing to lend money on fix and flip properties.

These lenders also have certain rules and regulations like a typical bank or financial institution but they are designed to work in favor for the real estate investor.


What Does It Take To Be A Professional Investor?

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.

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