While most media outlets proclaim that house prices just keep on rising and will this year, many real estate investors, sellers, and agents are finding the market much more challenging in reality.

Of course, all real estate is local. Ongoing population shifts and new secondary rounds of migration between states and cities may certainly be pushing up prices in some areas, while others struggle.

Still, there is no denying that there are mountains of distress in the shadows. With as much a $1T in real estate loans set to default according to at least one economist.

Of course, doing nothing is only going to hasten your demise. You can’t stop doing deals, or let your money sit idle. So, aside from changing the geographies of where you are flipping houses, what else can investors do to keep doing business and make money, without taking on too much risk?

Of course, nothing is without risk. Not even keeping money in the bank or under your mattress. Yet, there are certainly ways to squash risk to the absolute minimum.

Wholesaling Real Estate

Wholesaling is a far lower risk real estate strategy than fixing and flipping houses, buy and hold, or new construction. It’s all about buying low, and selling low, which is what the current market is all about.

Find The End Buyer First

Make sure you have an exit before you get in. This is how you actually invest with confidence versus just gambling on what could happen. If you have an end buyer, especially one under contract, and with money on the line, you know you are already going to exit and get paid before you make an acquisition.

100% Funding

One of the best ways to minimize risk in real estate investing is to use financial leverage. This allows you to share risk with others.

Best Transaction Funding till offers 100% financing, including closing costs. That means you really have no skin in the game to lose should things really go off the rails.

Summary

This year is likely to bring a very interesting economy and real estate market. There are lots of opportunities. It is all about finding the right structure, strategy, and model to lower risk, and increase profit margins, so you can get busy making profits, with confidence.

Whether it is keeping up with living expenses, building a retirement fund, or creating your legacy, financial needs seem to be scaling fast.

The great news is that for those wholesaling and flipping houses, deals are also growing, with more motivated sellers, and record high prices.

Growing Financial Needs

Real inflation is now like a runaway train hurtling at full speed, with no sign of slowing down. People won’t stop spending, causing prices of groceries and other daily and monthly expenses to continually escalate and spiral up. $10 for a carton of eggs, or your car insurance going up 30% with no warning is just the tip of the iceberg.

At the same time Fidelity has warned retirement savings balances dropped by around 25% last year. Morgan Stanley predicts the S&P 500 could come down by another 25% plus in the next few months. Factoring in real inflation, those with IRAs or 401ks invested in stocks could see the real value of their retirement savings down almost 80% by the end of this year.

Meanwhile a new poll shows that most believe they need at least $3M to $5M to retire. While Vanguard reports the median retirement account balance they manage is less than $28,000.

That’s a big gap, and it’s growing.

There’s no question that real estate, and especially quick flips or wholesale deals can be exactly what is needed to supersize income, and regain, and grow your nest egg quickly.

Home Sales Are Down, But Records Are Being Set

Bloomberg reports that existing home sales have now fallen for 12 months in a row. Yet, some markets are still seeing organic appreciation of 30% plus year over year.

Luxury Palm Beach homes have recently been flipped for 86% returns, totalling tens of millions of dollars. A trailer in the Hamptons recently sold for almost $4M.

There are huge profits to be found, if you get out there and do the deals.

Making It Work

It’s true that giant financial institutions, banks, and corporations are struggling. They are slashing workers and closing offices. Even Walmart, which should be a top performer in this phase of the market is reporting it is down for the second year in a row, and is cutting its financial outlook.

Of course, many of these companies, including Upwork and Walmart are those that have been self-sabotaging by burning their best and most loyal customers, and stripping away customer service over the past year.

If you give bad deals, and treat people poorly, they are going to shop somewhere else.

So, as the number of motivated sellers increase, and there are great opportunities for fast flips, stand out with great, human service, and price your deals competitively, and you should have no problem exceeding your financial goals this year.

 

NFTs appear to be the latest fad in investing. So, how do they stack against real estate for investors?

If you’ve heard your kids chatting about NFTs, but haven’t explored them yourself yet, it stands for Non-Fungible Token. These are forms of digital art that people can buy and invest in.

Almost anything can be a NFT today. From digital movie tickets, to collectible pictures, to in game purchases.

Some of these have sold for tens and even hundreds of thousands of dollars. Like the cryptocurrencies which are often used to buy them, they may go up and down in value. But, how do they stack up against proven investments like real estate?

Buyer Pool

One of the strengths of real estate is that there is a huge resale market for it. At the right price point the potential resale market for a wholesale property, house flip or rental apartment may be tens of millions or even of a billion customers. That creates liquidity and value.

Not many people are in NFTs yet. Meaning that there aren’t many people to sell your virtual Logan Paul playing card, virtual home in a game, or old movie tickets to.

Need

Real estate is a need. A forever need. People will always need shelter. It is even more urgent than food and water. This will never change. Even in a recession people need shelter.

When things get tight, there may be little need or desire for digital art.

Hard Assets

Even physical artworks used to be valuable because they were rare and tangible. Going digital changes these dynamics.

The problem with public stocks, crypto and other virtual assets is that they can go to zero and leave you with nothing.

Even in the worst case scenario in real estate. You still have the hard asset. You can still get cash flow from it. It’s value will eventually exceed its previous high.

Cash Flow

It may be possible to get cash flow from NFTs. Perhaps there is someone willing to pay to rent your virtual playground online, or to pay for a viewing of your favorite athlete's photo.

However, we do know that people will for sure pay for rent on real homes and other property. Being able to generate that consistent cash flow is a critical financial difference.

Leverage

You may be able to borrow against your bitcoin or use a credit card to leverage your NFT purchases. Though, the market for financial leverage in real estate is clearly far larger, more liquid, and can provide even the average new investor access to millions of dollars in financial leverage to scale quickly.

Summary

NFTs may be fun and interesting. They may even be a gateway for getting your kids interested in investing and to teach them some valuable financial lessons.

They may not be the safest or most profitable investments by any means, but if you are tempted, then it doesn’t hurt to throw $10 or $100 of play money at them that you make from investing in real real estate.

 

With much of the world facing being locked down and quarantined, what are the top tools for investors to use to keep flipping houses and bringing in an income?

Whether it is the 2020 COVID-19 lockdown, the next one after that, or simply moving to a more efficient and profitable business model, here are some of the top tools to be using now.

Mailchimp

Email is still one of the top ways to communicate. Especially in real estate. If you slacked on building your list before or just haven’t worked it well, this is a great time to start. Mailchimp is one of the fastest email services to set up. It is one of the easiest to use. It is free for most small users. You can even use it to create popups, forms and landing pages.

Close.io

Close.io is a simple to use cloud based CRM. It is also packed with awesome features, such as one click calls, the ability to text message leads and record calls. Use it to manage and nurture your leads and your team as you work remotely.

Whatsapp

Video calls are becoming more important. Especially for those who really hadn’t grasped the ability to work virtually before. You can use it for file sharing, team meetings, working with buyers and sellers, as a live chat tool, and for video tours, showings and inspections.

There is a lot of buzz about Zoom right now. Of course Zoom is also now one of the most targeted apps by hackers looking to take advantage of the chaos.

FaceTime and Google Hangouts are options for simple chats and video calls. Whatsapp stands out with a large user base around the world, easy use on both Apple and Android devices, as well as a desktop version, and being able to use it over WiFi in case of phone service issues.

Google Drive

There are lots of project management and collaboration tools out there. Be wary of getting lost in exploring them, learning them and getting your team to adopt them, as well as adding extra overhead. Most people already use Google tools. Drive is free. It’s easy to use for collaborating on documents in real time, storing files, and much more.

Best Transaction Funding

We could once again see many lenders and banks failing, as well as small private lenders pulling back. You’ve got to have leverage. Access to more leverage will help you move fast and lower risk, while doing more deals. Best Transaction Funding is still financing deals, with up to 100% LTV loans. Use it.

 

 

These companies could have the power to change the real estate industry.

For better or worse, these companies could be shaking things up in the real estate market. Know who they are, how they can help, and the risks they can bring.

1. Zillow

Zillow is a big beast. They’ve been one of the most controversial companies and websites in the real estate market since they launched their horrible flawed Zestimates. Now they’ve bought a mortgage lender, are trying to take over renting and property management, and are now trying their own hand at flipping houses with Zillow Offers. They say they plan to buy 5,000 houses a month. Or at least use this as a powerful lead generation tool to feed leads to their agents.

Aside from manipulating values, the biggest risk Zillow represents is if it fails. They already report they are losing over $45M every three months on Zillow Offers.

2. Opendoor

Opendoor is one of those new giant iBuyers or online wholesalers. They are armed with hundreds of millions of dollars in venture capital and have forged a partnership with real estate brokerage Redfin. Just like OfferPad has done with Keller Williams. They aren’t buying everywhere, or every type of property. It’s a great example of what you can do as an individual wholesaler when you have unlimited funds to buy and flip fast. You can do that using Best Transaction Funding to finance your deals. Again, the real risk here isn’t the competition, it is if they aren’t buying at the right numbers and fail and turn off Wall Street and the big funds behind them.

3. WeWork

WeWork is a great example of what’s possible in terms of going big, and also how to fail hard by overstretching and having an unsustainable business model. Worth close to $50B a few weeks ago, the office giant’s valuation has just been revised down by about 75%, to less than the $12B they’ve borrowed.

4. Zurixx

You may not have heard of them, but Zurixx is behind the education programs recently promoted by HGTV star Tarek El Moussa. They just got hit with an FTC investigation and order to stop due to being misleading, and charging high fees for training that may not produce the promised results. That could end up shaking up the real estate guru space. More notable personalities in this side of the industry are going to have to find new ways to market if they are going to stay in business.

5. Google

For real estate investors who are relying on PPC ads and SEO, Google has all the power to shut the flow of business off overnight or hike the costs of lead generation. The same goes for Facebook. Be very careful about betting everything on third party platforms.

6. Amazon

Amazon has been looking for its angle to take over the real estate market for a long time. It may have already found that in selling homes online.

7. Haus.me

Haus has created a whole new generation of houses. They can withstand earthquakes and hurricanes, and are reportedly even zombie proof. They produce zero carbon emissions, can run completely off the grid, and you can take them with you when you want to move. They are also highly autonomous and packed with new smart home tech. It could completely change what we expect from housing.

 

Wholesaling just seems to be getting hotter and hotter. There are a lot of educators promoting virtual wholesaling, and droves of new investors seem to be taking to it. Some are making $100k a month. Others are still spinning their wheels and trying to make those first dollars.

No matter what scale you are operating at, here are some of the most frequent mistakes wholesalers are making now, and how to beat them to really get deals done, put more dollars in the bank and keep things flowing smoothly.

Taking the Long Route

There are so many marketing funnel and channel ideas for trying to get leads, find sellers and push out to buyers and raise money today. Some are great. Most are just really long detours and excuses not to just pick up your phone and do some prospecting and make some offers. Make money, then you can get fancy.

Follow Up Fails

The number one plague on the real estate industry today is lack of follow up. Realtors and wholesalers are getting plenty of inbound leads, even without a big investment or beautiful materials. They waste the majority of these by not following up. Sellers and buyers and lenders shouldn’t have to follow up with you. If you want the money, deals and sale, you’ve got to follow up relentlessly and fast. If you can’t respond to leads in the first all important 5 minutes, then you need to hire some kind of help.

Not Considering Other Exit Options

Finding cash buyers is great. There may still be many out there. Best Transaction Funding would love to fund your back to back closings on these deals. Though if you are getting a lot of other types of offers, don’t just waste the opportunities. Every lead should be treated like gold. Respond well. If they aren’t a fit for this deal, put them in your database for upcoming deals. If you are getting a lot of buyers wanting seller financing, maybe it’s worth taking some of those. Don’t get stuck in your model. Be flexible.

Not Analyzing Pricing Well

Whether it is greed or being out of touch, many resellers just seem to be asking for a lot today. They aren’t doing the math as a wholesaler, and what it will take for an other investor to acquire, renovate and exit that deal. Some ‘wholesale’ deals are being priced like new construction. Think about it. If someone can build a brand new place on a similar lot for what you are asking for a beat up rehab project, why would they? Especially if you are demanding all cash?

Not Knowing What You Are Selling

It is completely possible to flip houses sight unseen. Yet, if you don’t know the condition or what’s on title, you can’t price it right or pass that info on to your end buyer to make a good decision or offer. The more you can get a handle on repairs and the equity, the better you can present to your buyers, de-risk it for them and streamline  the resale transaction. All with far less likelihood of the deal blowing up.

Getting Cut Out of Deals

Unfortunately, there are a lot of greedy people out there. Both Realtors and investors keep finding buyers and sellers try to cut them out. Wholesalers are especially vulnerable when trying to do assignments or simultaneously closing using the buyer’s funds. Instead, do two transactions using transactional funding, so you become the owner and are the only path for them to get the house.

Not Empowering Your Team

If you are hiring people, and then micromanaging and spending more time managing than it took to do the job in the first place, just do it yourself. Save the time and money. Of course, it is far smarter to hire help and then get out of their way so they can do what they are the experts at.

Steve Jobs said. “It doesn't make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”

 

Is real estate investing a race of speed, or is it more like an endurance race or decathlon?

You can approach real estate investing any way you like. Some may be inclined to rush and be highly motivated to go all in at full speed. Others take a very slow and long approach. Which works best? What are the pros and cons of these mindsets? What’s it really like?

The Sprint

Taking big and swift action is required if you want big and quick results. If you are throwing yourself all in to wholesaling houses or fixing and flipping and need it to put money back in your pocket by the end of the month, you had better hustle. You can do it, but you’ll have to go flat out, make decisions quickly and make no excuses.

Just 30 days could change your life. Yet, there are potential pitfalls and downsides of only being a sprinter.

It can make it tempting to take shortcuts and make unsustainable moves. Just like those marathon cheaters taking an uber to the finish line or Lance Armstrong in cycling. This is even true for those in buy and hold real estate and multifamily. These are the people trying to sprint, when they are really in a marathon.

You may burnout by going too fast. Or you might wake up and find you’ve smashed your 5 year goals in just 2 years, but didn’t make a plan for how to maintain it after that.

The Marathon

Others see real estate as a marathon. A really, really long race. One which requires a lot of stamina and endurance, patience and a lot of repetitive tasks.

If you end up living more than 5 years, then real estate really is a marathon. Quick results are great and possible, but once you are in the lead, you need to stay there. You don’t want to burn out after the first mile and throw in the towel. Yet, if you get too comfortable in the lead, there are plenty of people behind you looking to pass you.

There are some ways that real estate investing is not like a marathon at all. It’s not just one smooth track. Opportunities are always changing with the market and economy and other trends. There may be times to sprint, slowdown and pace yourself and to pause or leap.

The Decathlon of Real Estate

In reality real estate investing is probably much more like a decathlon or Spartan race. Days of both sprinting and long distance, as well as specialized skills in jumping, throwing and pole vaulting.

It requires many different skills. You’ve got to find the deals, fund the deals, flip the deals, and train in between.

To master it for quick progress and staying a champ for the long term, you’ve got to know when to do what, and where to focus. It’s smart to choose what to excel in, and it takes wisdom to know when to sprint or pace yourself.

If you live in a very seasonal real estate market this should be pretty obvious. Though in addition to larger real estate cycles, every year can bring its time to sprint, and cool down.

One of those coming up is back to school season when families are hyper motivated to sell and buy and move before the new school year starts. Ready, set, go...

 

What are the advantages and disadvantages of wholesaling houses in smaller cities versus larger cities?

Larger cities can definitely offer more action, prestige, and options. Financing is typically easier as lenders prefer markets they know. Yet, more and more real estate experts are heralding the benefits of investing in the suburbs and small towns. So, how do they really stack up?

The Pros of Wholesaling in Smaller Cities

1. Less Competition

Fewer investors operate in smaller locations, meaning there may be less price pressure and may be more value for wholesalers and house flippers. You can potentially also do more deals with fewer conversations thanks to not being out bid all the time.

2. Lower Prices

The suburbs and small towns typically come with much cheaper property prices. That can be attractive for new investors trying to get in, as well as when buyers and renters are fleeing unaffordable cities and downtowns.

3. Easy to Dominate

One billboard, one magazine and newspaper ad, a couple of signs and a couple hundred dollars a month on Google Ads might make you the most visible and dominate brand in a small market very quickly.

4. Great Growth Opportunities

Lower prices and rents now, mean more room for growth. There will be more room to grow in the number of properties too.

The Cons of Wholesaling in Smaller Cities

1. Less Demand

A smaller market also means less demand from a smaller pool of prospects.

2. Lower Dollar Amounts

Cheaper homes and lower entry prices may sound good. They can make it easy to mark up properties 50% or 100%. Yet, the dollar amounts are small. You can by for $50,000 and sell for $100,000, but still only make $50k. In a big luxury market a modest 10% profit margin may at least give you double or 4x that.

3. Returns on Marketing

Smaller markets mean fewer eyes on your marketing. You may only have a couple hundred online searches for your product a month. A few thousand vehicles go past your signs, and a few hundred blog readers. In bigger markets you might get a million views for the same outlay.

4. Little Economic Strength

The one thing that has kept most investors out of small towns, besides the lending issue has been the economic fundamentals. They have little diversification. Normally only one or two major employers. Perhaps all focused on farming and agriculture. It doesn’t take much to crush those towns and leave them with high unemployment. However, this is changing, provided there is good internet, there are millions of high paying remote jobs available that can pay a lot more than local ones.

Where will you invest?

Are real estate agents really helping or hurting investors’ efforts to sell homes?

Many property investors and regular homeowners simply aren’t aware of how beneficial or harmful Realtors can be in the mission to sell their properties. How do you know if yours is doing their job? How do you spot the good among the terrible?

The Issues

Just as with investors, not all Realtors are perfect. But, there are great ones out there. They can offer a lot of value to those flipping houses, restructuring rental property portfolios, and searching more homes to buy and wholesale. Those that fail to operate ethically, don’t have the hustle, or simply are not tuned into current trends can really hurt the sellers they represent, and be a major roadblock for buyers.

Unfortunately, some agents still hold out on presenting offers; either to wait for the one which offers them double commission, or because they don’t understand them. Some are just slack at returning inquiries and following up. Others don’t have the motivation and hustle to try and make deals work and make the most out of every lead.

This doesn’t serve anyone well. It can result in properties rotting on the market, owners losing homes or failing to get the most money in a timely manner, and it can choke the pace of the market too.

What to Look for in an Agent

To beat the above issues real estate investors need to select the agents they work with carefully. Don’t just hit Google or go based on who has a lot of yard signs out. Don’t base the choice on years in business either.

Instead, look those you can build a relationship with. Those that put values and service first, those that are hungry and active, and those that can answer questions about quirks in the market or can find out fast.

Test them. Do they answer calls on their properties fast? Do they take offers and try to make them work? Do they know the requirements of local associations, building codes, and mortgage lenders?

Always do a little mystery shopping before selecting an agent to help you. Then if you list with them, do it again. See how well they are serving potential buyers for your property. If they aren’t presenting you offers, responding, or being courteous, you may have a case to fire them and find someone better.

What have you found is most and least important in choosing an agent? Let us know your favorite investor friendly agents around the country on our Facebook page…

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding for real estatewholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Every real estate agent and home buyer needs to have a hard money and transactional lender in their pocket…

Even at the best of times, the best looking real estate deals can fall apart. Mortgage financing issues are usually the culprit. At last count Forbes and Zillow have stated that one third of real estate contracts fail to close, even years after the pit of the crisis. When deals fall apart it can seriously disrupt the finances of real estate professionals and businesses. It can impact their reputations, and even turn clients off to the market. For their home buyer and investor clients it can be financially catastrophic, not to mention incredibly stressful. Having a backup financing source can help save deals, and dramatically cut down fall out ratios.

When to Bring Out Your Secret Lending Weapon

Simply walking away when deals get shaky isn’t the answer. It is never easy. But it is those that keep pushing forward and that find solutions where others give up that are the success stories.

When lender issues come up, attempting just to scoot sideways and to shop around with other conventional mortgage lenders and banks is unlikely to make a difference. In spite of the upfront promises most of these lenders all have the same criteria and underwriting requirements. In order to bring deals back from the brink, save buyers from major financial loss, protect them from lawsuits for breach of contract, and to create ongoing win-wins it can be wise to have alternative lenders to refer them to.

While every deal may not be saved in exactly the way it was originally written a hard money lender or transactional lender can preserve deposits, and profits by offering the funds required to close, and fast.

While these loans can be closed in days, especially if you already have title, appraisals, and inspections done, the sooner the switch is made the better.

Alternative Loan Solutions

In many cases a hard money loan may be used to close quickly and save the deal. The terms may not be as attractive as original options, but do the math, and with a refinance in the near future it will often be the best option.

This is certainly true for those flipping houses. Transactional funding may also be used to wholesale these properties. In many cases the profit margins may be just as good for clients as if they had gone through the process of holding and renovating a property.

So when deals start experiencing issues – don’t panic; turn to your alternative lender quickly and pull off a great deal for everyone.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

New data reveals who the biggest house flippers and real estate wholesalers really are…

There are a lot of misconceptions about flipping houses, and wholesaling in particular. The industry and gurus are often a big part of this. When many people hear “wholesaling” or “flipping houses” they now think of fraud, Vanilla Ice, infomercials, “no credit, no money, no experience,” promises offering newbies the chance to make big money fast in a couple hours a week. These things are not necessarily totally incorrect. But the numbers over the last 12 months show quite a difference between perception and reality.

2015 stats and transaction data sets from Property Shark show celebrities renovating and flipping luxury houses, hedge fund managers turning over prime properties for millions in profit, and top executives putting their cash into real estate, and reselling repeatedly.

There is no question that wholesaling real estate can be a great way to enter the game, and to start hacking your way to better finances. But it is not just for newbies, or those trying to break their way through from the minimum wage or middle class rat race. It can be a great full time and long term business and investment strategy. Even for the 1% it is proving to be a highly desirable way to augment careers and other efforts to generate income and wealth.

For the sophisticated individual flipping houses provides essential diversification, big leaps in wealth and net worth, a solid asset when other things aren’t going as well as planned, and it’s fun. This is not a strategy that just yields a few thousand dollars to amateur middlemen. Consider that prices in 3 New York City neighborhoods leapt up by $3M in the last 12 months. Previous data from RealtyTrac has shown average profits from flipping houses in some US cities averaging $60,000 to $100,000. That’s just pennies compared to some of the high-end luxury flips happening in LA and NYC. Some are being flipped for tens of millions of dollars, and when it comes to commercial real estate; even a hundred million or more in profit.

Hedge fund managers, CEOs, talk show hosts, and actresses are flipping houses, condos, and co-ops in top markets, and others are turning over pools of single family rental homes. The main difference in their strategies, aside from the price tags, are the use of professional designers, and real estate agents, and leveraging the protections of LLCs. They take this business seriously, and that seems to be paying off, big time.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Where are the wholesale real estate deals to be found in 2016?

As the US economy and housing market continues to improve many real estate investors are wondering where they are going to find good deals to buy over the next 12 months. The National Association of Realtors says we are finally returning to a ‘normal’ market after over a decade. According to NAR that includes very few foreclosures and short sales in the marketplace. So where should value seeking real estate investors be searching for new properties to buy?

1. Real Estate Wholesalers

This might seem quirky, especially if you are a wholesaler yourself, but don’t discount this source just yet. As hard money and rehab lenders ease up and offer high LTV loans it’s easier than ever to flip house deals from wholesalers. Many also have invested heavily in dominating local auctions, marketing to motivated sellers, bank distress sales, and have negotiated incredibly low priced deals. Others attract many leads which aren’t in their immediate area and are happy to refer them. This can create a lot of efficiency for investors.

2. Aging, Long Time Owners

Between recent equity appreciation and the new rising interest rate environment this is the ideal time for many aging real estate owners to sell. Those that are already in retirement, and have owned their properties for a long time may not want the hassle of managing any more, and probably have a sizable amount of equity. Those without any heirs of their own may be happy to let properties go at a discount to good people that share their values.

3. Your Landlord

There are a large number of real estate investors who are also still renters. If this includes you then don’t overlook asking your landlord if they are ready to sell. If you don’t and they list it with a Realtor you’ll be kicking yourself.

4. The MLS

Many real estate investors snub their noses at the idea of flipping houses on the MLS. However, a look at what others are accomplishing by doing my change your mind. If you can make $50k in a few days by picking up ripe deals this way, why not?

5. Expired Listings

Even though many properties have been selling incredibly fast, others have been rotting online for so long that Realtors are losing their listings. Sometimes this is because they were too aggressively priced. In other cases it is they were poorly marketed, or the agents just failed miserably at responding to leads. These can be highly motivated sellers eager to meet a real buyer.

6. Inherited Property

It is important to be sensitive in this niche, but many heirs to real estate are eagerly looking for a cash buyer that can move fast and help them liquidate estates. If you haven’t already consider adding this niche to your portfolio in 2016.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

An increasing number of real estate investors appear to by flipping houses on the MLS. What are the pros and pitfalls of this strategy? How can it be mastered?

While some inexperienced investors and onlookers will argue that it can’t be done, a five minute review of properties on Realtor.com clearly shows investors acquiring and flipping houses on the MLS with big markups. But is it as easy as it looks?

The Advantages of Flipping Houses on the MLS

Some may snub their noses at the thought of sourcing or selling real estate deals via the MLS, but others appear to be making $50,000 a pop in just days doing it. Sourcing properties from the MLS significantly simplifies the search process. It’s a constant feed of potential deals. These are active sellers too, which makes the process of negotiating and securing a contract much easier than having the extra step of trying to convince and owner to sell too. The MLS offers significant volume, with many properties near and far to pick from. On the flip side it puts a whole army of agents to work on selling your deals for you. As for the costs of working with real estate agents; once investors do the complete math the numbers may not ultimately be that different from direct mail, cold calling, and other marketing methods.

The Pitfalls of Flipping Houses on the MLS

The biggest issue of selling flips on the MLS is often that potential buyers can see recent transaction and listing history. They can see if you just bought this property for $50,000 less yesterday. They may not know how hard you worked to negotiate, any improvements you are making, or other ways you’ve added value. Regardless of whether you are offering a fair deal or not, some will snub your deals out of principle. Unless you negotiate commission rates with Realtors or use a flat fee MLS service then cost may be an issue. This can also create valuation and financing issues for end buyers. Their lenders are going to do their homework too.

Solutions

Flipping houses on the MLS works, but it has quirks too. Know when to use it, and how to master it.

One way to maximize the upside is to just use the MLS for one side of your flips. At a minimum it can be a great tool to supplement other channels. Just make sure visible data is edited rapidly, and when needed connect buyers with alternate funding sources or use hard money when you can’t use transactional funding.

 

Authored by BestTransactionFunding.com; the leading source of transactional funding and hard money loans for real estate wholesalers, where 100% financing, and saying “Yes” is what we love doing all day long.

There appear to be huge premiums to be found in flipping houses and condos that are leased via Airbnb. So is this the new power tool for investors, or are there dangerous pitfalls which are being overlooked?

Airbnb Rentals

Airbnb is a short term rental ‘app’ allowing property owners and renters to lease all or part of a space to guests on nightly, weekly, and monthly rates. With over 1.5M listings in 34k cities the service is rapidly disrupting vacation rental markets, and has become a popular alternative to hotels and long term annual rentals.

Airbnb is changing the dynamics of the real estate market. On one hand it is reportedly adding millions to the local economies where it has a strong presence. On the flip side it is dramatically driving up both local rental rates and property values. Many real estate investors are finding this style of renting hugely popular. It means almost zero management versus old school practices, and there is a lot more cash flow. It isn’t just for buy and hold real estate investors either. If flippers and wholesalers secure a property line up a strong income stream with pre-booked Airbnb rentals they can almost turn over a turnkey product for a premium exit price, without any of the ongoing headaches. For many this realization can seem like a “Eureka!” moment. But what are the real pros and cons of this strategy?

The Pros of Flipping Airbnb Rentals

High Returns

Airbnb rental rates are producing amazing returns for those that get good deals on real estate. It is almost bewildering the rates that some units are fetching. In many cases they appear higher than local hotels.

Cash Flowing Property

Without Airbnb it seems it is getting harder to find positive cash flow in some neighborhoods. And instead of having to gamble on securing tenants or what real rental rates might be, selling in this way ensures cash flow for the end buyer.

Easy Management

Say goodbye to expensive and intensive marketing, tenant screening, and evictions. Airbnb makes it about as easy as it can get to lease a property.

Better Resale Product

For those flipping houses this strategy can result in a much more attractive product to resell. That also means premium profit margins, and faster resales.

The Cons of Flipping Airbnb Rentals

Legalities

Airbnb style short term rentals aren’t legal or allowed in every city, community, or building. Skirting the rules can be a major problem.

The Airbnb Effect

The Airbnb effect isn’t all good. Many are complaining that it is devaluing their buildings and neighborhoods due to wild party crowds. In other cases it is pushing year-round renters out because it erases affordability.

Consistency

Even though real estate investors may be able to successfully pre-lease units for a couple years, most won’t be able to guarantee long term cash flows or full occupancy.

Not Everyone Wants a Rental

The real downside is that not every end buyer wants a rental, nor a short term rental. Some are stuck on old-school annual leases, or want to remodel and resell properties, or use them to live in. If the property is pre-leased for several months next year it is going to make it harder to flip to these buyers.

So will you Airbnb it, or not?

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Is it wiser to use debt leverage to invest in real estate, or pay off all of your bills and stick to cash purchases?

This is an increasingly popular question among aspiring real estate investors. Many have been turned off to all forms of debt. So they question whether they should wait to invest until they are debt free, and then stick to buying properties for cash. Others find this idea absolutely insane given the speed, high returns, and apparent reduced risk of using other people’s money to invest. So who is right? Which method is right for you?

Leverage: The Good, Bad, and Ugly

Financial leverage is unquestionably the most powerful tool available to investors. It can help lower and spread risk, speed up results, and maximize cash on cash returns. But it is also true that leverage can be dangerous is used poorly. If you are constantly in a zero equity position, have negative cash flow, and fail to squash your overhead so that you are truly and sustainably financially free, it is a recipe for disaster.

So leverage is important no matter whether you are starting out with millions or pennies. It is equally important not to drown yourself with debt either. Fortunately, there is a hybrid solution that will make both camps happy, and maximize their investment activity…

The Highly Leveraged Debt Free Way to Invest for Maximum Gains

By using transactional funding for flipping houses as a wholesaler investors can benefit from 100% financing from their deals, but can be debt free again within hours. Best Transaction Funding will provide up to 100% of the money investors need to acquire wholesale property deals that will be instantly flipped. By turning those properties around in days investors are never tied to long term (bad) debt. They make the maximum possible return, with the lowest risk, and enjoy the best of both worlds.

Then those lump sum cash profits can be used to pay off other existing debt like credit cards, car loans, student loans, and home mortgages on personal residences.

But…

Don’t wait. Waiting until you’ve paid off every penny you owe in borrowing right now is just an excuse to stall. That means missing many very lucrative opportunities. And you can’t afford that. Especially if you do have bills. Get started, make money, pay off your borrowings, and claim real financial freedom without being lumbered with long term debt.

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Are you taking too long to flip properties?

How long should it take to flip houses? And what are the costly perils of taking too long to turn real estate deals around?

BloombergBusiness recently announced that it’s only taking a few years to flip NYC condos for big profits. Most wouldn’t consider that ‘flipping’. That’s more like buy and hold. In fact; you could probably build a few grand spec homes from scratch with that type of timeline.

In the past RealtyTrac has said the average turn time for flipping houses was 106 days. Redfin says that new home listings shot up 12% in February 2015. However, it also describes buyers “coming in like a lion.” A 44% year over year surge in home showings and a 36% year over year increase in signed offers suggests a looming inventory shortage. And the National Association of Realtors says the average Days on Market (DOM) fell to 89 days in March. That’s ahead of peak spring and summer buying season. So this number should fall even further.

Traditional real estate rehabbing is valuable and needed. And it can still be profitable in certain scenarios. But it may not be the fastest way to turn around deals. And clearly once a rehab is done there is no reason it should be taking real estate investors more than 90 days to flip these houses.

Check out these new hard money loans for fixing and flipping real estate

Meanwhile property wholesalers using Best Transaction Funding are flipping properties in just 1-3 days. They are able to do this because of the capital they are able to leverage, their strategy, and perhaps most of all because they focus on building buyer lists and pre-selling their deals. Let’s be honest; every day holding a property, and every contract signed brings some form of risk. If you don’t already have a concrete exit before going in, you are just speculating, versus investing.

With wholesaling you are almost out before you are in. That presents the lowest possible level of risk. Fixing and flipping is still great, but the more flips you do per year the higher your overall profits are. Do you want to flip your money 12 times a year, or less than once? There should be no reason to be flipping the same money less than four times a year.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Use Transactional Funding When:

• You are flipping houses in 1-3 days
• You already have an end buyer
• You need 100% financing

 

Use Hard Money Loans When:

• You don’t have an end buyer lined up yet
• You need fast funds with easy qualifying
• You have a 1 to 36 month turnaround time, or window for refinancing

Click to request your Hard Money Loan Now!

Both options empower real estate investors to effectively act as cash buyers, increase their leverage while lowering risk, and close extremely quickly.

Contact us to apply for hard money loans today

For additional information see our Hard Money FAQ for more details and disclaimer.

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing and saying “Yes” is what we love doing all day long.

2015 is shaping up to be a sweet year for real estate wholesalers. New inventory, more buyers, and new loan programs are all aligning to make flipping houses a highly profitable endeavor for those that know where to look.

Finding Wholesale Deals

There’s no shortage of wholesale deals out there. If you are coming up short handed check out these four options…

Zombie Foreclosures

It’s no secret that foreclosure activity has been spiking. However, there are still tens of thousands of distressed properties that remain in limbo. In many cases owner – borrowers left years ago believing they had already been foreclosed on. Many are finding out that the bank still hasn’t followed through on repossessing them. That costs money and adds liability. That means a massive pool of properties which aren’t even being marketed for sale. They shouldn’t be too hard to spot. And by tracking down the owner or lender holding the non-performing mortgage debt great win-wins could be struck. And with no competition.

HUD Homes

HUD auctions are still churning out deals. Many have already had some rehab work done to them, and the earnest money requirements are minimal. They can be a great choice for those working with minimal capital.

Foreclosure Hot Spots

While national real estate statistics may mask the reality on the street, there are many counties battling foreclosure as if it was 2008 again. RealtyTrac reports foreclosure particularly high in MD and NV. In some counties around 1 in every 80 units is in some stage of foreclosure. That’s a lot of potential wholesale deals.

Areas Receiving Deferred Investment

There’s a 600 home community on the Delaware shore that is the perfect example of this. According to local custom home builder and renovation firm Turnstone Builders; this 3 mile stretch of beach is now receiving the benefits of a new $63M federal investment. The beach widening project is reportedly doubling local home asking prices from around $500k to $1M. And the project is just beginning.

Why Should Real Estate Wholesalers Care about End Loans?

CT Homes’ JD Esajian of the Flip This House TV show just launched a new two part report on The Number One Financial Threat in America. The report highlights how renting is becoming unsustainable, and how much cheaper it is to buy homes. WA real estate expert Joe Tafolla highlights how thousands of individuals can qualify for no down payment financing, and tens of thousands in down payment grants. Even if they are recently out of foreclosure, bankruptcy, short sale, or have credit scores as low as 640. Many others could find a combination of hard money loans and seller financing the way to get back into homeownership.

This can help wholesalers boost direct sales to retail home buyers for maximum profit, quick flips, while helping to provide affordable housing and reduce the hardship of skyrocketing rents.

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Wholesaling houses has many obvious advantages. It also offers some unique and very powerful benefits many real estate investors at least seriously underestimate, if not completely overlook.

So what are these advantages of wholesaling compared to rentals or fixing and flipping houses?

1. Eliminating Disputes with Neighbors

When rehabbing homes to flip or hold as rentals neighbors can generate significant stress and become obstacles. Regardless of how well investors try to select tenants when holding properties, crazy and ignorant neighbors can cause all types of bizarre disputes which can lead to losses of income, property damage and more. Even in high end neighborhoods landlords can face the likes of Justin Bieber moving in next door and causing tens of thousands of dollars in damage by hurling objects at your investment property. This can all be avoided with wholesaling.

2. Compounding Gains Faster

Even the best rental homes, high performance mortgage notes, and rehabbing can mean sluggish returns compared to wholesaling. Not only can property wholesalers put down less money, which dramatically boosts cash on cash returns, but with lump sum gains being able to be reinvested and flipped multiple times per month on an exponentially growing basis that annual and lifetime returns on wholesaling can seriously put other investment strategies to shame.

3. Eliminating Holding Risks

Even house flippers fixing up and reselling properties in a period of weeks or months face major exposure to risk. From hurricanes and earthquakes to value dips due to neighboring foreclosures every hour properties are held means weathering a barrage of threats. Insurance is one of the necessary evils, but talk to a handful of residents in areas hard hit by hurricane Sandy or in storm prone South Florida and you’ll no doubt hear plenty of nightmare stories about how insurance companies fail to deliver.

4. Easy Access to 100% Financing

One of the really beautiful benefits of wholesaling houses as a real estate is easy and streamlined access to working capital and 100% financing. Via Best Transaction Funding wholesalers can finance their whole deals without asset verification, having great credit scores, or even having another job.

Which is the better type of financing for real estate investors today; transactional funding or hard money loans?

Are hard money lenders still relevant? Why might some property wholesalers opt for hard money loans even though they have been using transactional funding successfully day in and out for years?

New Hard Money Loans, New Applications

Hard money has changed a bit over the last two decades. The application process is a little different, and new regulations have made hard money loans slightly more challenging than they used to be. However, hard money mortgages are still the easiest mortgage loans to obtain and continue to be an essential tool for all types of real estate investors.

It was recently revealed that former fed chairman Ben Bernanke hasn’t even been able to refinance his own home despite being able to earn $250k in less than an hour for speaking engagements, and has a signed book deal. So clearly equity based lending like hard money remains absolutely invaluable in the market, for an even wider base of borrowers and buyers, and will continue to.

While hard money can still be used for flipping houses as in the early 2000s and before, prior to transactional funding making it to the mainstream, there are also new applications and reasons to use these loans.

This includes:

• Fixing and flipping houses
• Releasing pent up equity
• Speeding up property acquisitions
• Less paperwork
• When investors can’t pass up on a great deal but don’t have enough liquid cash or an end buyer in place yet
• Buying time to get properties performing again, to obtain better long term financing or resell at even higher prices and profit margins

The Advantages of Transactional Funding

When hard money lenders exited the industry as the market began to fall apart in 2006 lenders like Best Transaction Funding stepped up, and into the market to serve real estate investors in their greatest time of need.

Previously this type of financing was only available to a few very privileged real estate investors. Yet, instead of shrinking or tightening up guidelines transactional funding became one of the best, and virtually only ways to fund wholesale property deals.

Transactional funding does a lot of what hard money used to do, and private money has done with, but with organized transactional lenders offering ease, systematization, and scale for real estate wholesalers serious about scaling to substantial volumes of business.

It couldn’t be easier to use. Find your property, circulate the deal to your list, close with 100% of someone else’ cash, get paid, and repeat.

Transactional funding offers far easier qualifying, lower overall borrowing costs, and is great when you don’t want to deal with the additional paperwork and time of hard money.

Still, both forms of real estate investor financing are absolutely critical, essential and beneficial for investors at different times.