While many parts of the country are seeing very strong and growing real estate markets and home prices, new data seems to reflect a sizable amount of stress still bubbling under the surface.

What does it mean for real estate investors?

Bank Of America Expects To Lose More Than $50B

While the Fed has proclaimed that banks have been passing stress tests with flying colors, Bank of America seems to be among those that are much more pessimistic.

The Feds have predicted the bank will bring in a lot more revenue, with fewer losses than the bank is forecasting. Which across anticipated losses on loans and credit, and goodwill, they expect to exceed $50B, in just a nine month period.

Interestingly, while the Fed is expected to continue hiking interest rates, they are also calling for banks to have higher capital reserve requirements.

We can expect these trends will make banks even more cautious about making loans, and their capability in doing so. Especially on the consumer and homebuyer front.

Airbnb Revenues Crashing

While Airbnb hotly contests the numbers and say they are growing, one short term rental data analytics firm has proclaimed that hosts are suffering a 50% drop in revenues.

Altogether the above suggests that many short and long term rental property landlords may be about to run into more issues. Both in being able to get financing and making ends meet.

Real Estate Wholesaling

While there will continue to be buyers of income properties, that pool may shrink. There are also likely to be a lot more distressed asset sales coming down the pipe.

Real estate investors that are on the front lines of this may find it high time they switch to a real estate wholesaling model.

This enables you to get in, out, and paid, without worrying about long term financing, or renter dynamics. Nor being pinched between inflation and rent controls.

Best Transaction Funding is also continuing to actively lend on wholesale deals.

If you need to keep your income up, profit margins up, and utilize smart leverage, it could be time to embrace this model.

How can you navigate the 2023 real estate market for success?

The New Year is here. It is likely to be another exciting year in real estate. While some see uncertainty, there are many predictable events and trends coming up. Here’s how to make the most of it.

Planning For The Year Ahead

If you haven’t yet, it’s time to take a week, or at least a long weekend off to really focus on your goals, business plan for the new year, and to get in the right mindset.

The world’s largest asset manager recently proclaimed that central banks are deliberately trying to force a recession. Which will result in a downturn like no other. This is in contrast to the official government data which declares we are already out of the recession.

For real estate investors, and especially real estate wholesalers, it doesn’t really matter. It may influence your offers, and how you remarket properties, and who your buyers are over the next year. Yet, it doesn’t have to impact your goals for deal volume or profits.

It is important to really put yourself in the right mindframe, avoid falling into a place of scarcity. Instead focus on your own goals, and how you will achieve them.

The End Of Year Hangover

It’s quite common to have lackluster data come out as we roll into a new year. It has been the holiday season after all. Don’t be surprised by low numbers. This probably won’t last.

This is a great time to make acquisitions. As well as to really start ramping up, and loading up on your marketing to really stay ahead of the competition and enjoy a flush year.

Tax Refund Season

Something special happens as we roll into February and April. Regardless of what else is going on in the economy out there, much of the population is getting what they see as a windfall in money from the IRS.

For most, this is the only time they can afford to move into a new apartment, or put the down payment on a home.

Be there to help them.

Peak Home Buyer Season

Late spring and summer sees that annual rush of movers. Some are highly motivated to sell. Others are highly motivated to buy. This is the season which usually sees the best life in home values.

Fall

As the nation heads back to school, activity cools off, along with the weather, and listing prices take a seasonal dip. It’s another great time to flood your target markets with purchase offers.

The New Presidential Election Campaign

If recent trends are anything to go by, we can expect this next presidential election to be even more polarizing and dramatized.

For much of the population this may create an enormous amount of stress, pressure, and uncertainty. Again, keep focused on your own goals, keep the big picture in mind, and you’ll be fine. Look for the opportunities it will create.

 

If you’ve been relying on Facebook for your real estate wholesaling business you had better come up with some alternatives fast.

Facebook has been dying for years. A blizzard of recent events are likely to speed that up. So, just how bad is it? What are the alternatives for marketing your real estate business, investing, and lead generation?

Facebook Is Trending, For All The Wrong Reasons

The only hot and happening thing about Facebook today is probably the heat it is taking on all fronts.

The social media giant is taking so many dislikes from so many angles that it is hard to process them all.

Politicians are not happy with it. More are calling for the platform to be broken up. Especially after new whistleblower complaints and revelations of the company knowingly doing harm, including to our kids for years. That’s really no surprise to most people, nor is the lack of privacy and tracking abuses.

Despite the company ensuring investors it was rebounding thanks to COVID and lockdowns keeping people at home, the data shows a different story. Especially in North America the data shows that Facebook has been losing millions of users for years. The decline has been happening as far back as 2017. The truth is that while a lot of noise is made about it reaching billions of people, that is only really millions in the US and Canada.

Worse, a new SEC complaint shows that most new accounts are just kids making duplicate accounts.

The SEC complaint goes on to describe “extensive fraud” by Facebook in lying to business advertisers about its number of users and ad reach. A lot of this is due to Facebook counting the same users multiple times. Which may mean your ads are only reaching half, or 63% fewer users than you are paying for.

Then there are the recent blackouts which once again proved that business users can’t rely on the platform.

Marketing For Your Real Estate Wholesaling Business

Right after early users helped build up the platform to being a success, it began taking advantage of those same customers. Especially real estate investment businesses.

Some have stayed, and say they still find leads from it. Though you can expect those leads to become far fewer and further between, and far, far more expensive.

Instagram and Whatsapp are not reliable alternatives either as they are both operated by Facebook too. In fact, Whatsapp’s founder walked away from billions of dollars to distance himself from Facebook after selling the company to them.

Online is still important and valuable. Though just like owning your own houses instead of renting to pay for someone else’s retirement, you are far better off investing in and building your own online assets than making tech entrepreneurs like Mark Zuckerberg richer. He really doesn’t need your money.

Improve your own website, build out your own blog and online resource library, and maybe even support that with more traffic driven by offline advertising.

In fact, offline is the best new social network. Networking in person, and building personal relationships is far more attractive today after years of lockdowns. Remember this is a people business, not a bot business.

 

With new foreclosure and eviction bans being put in place, how can you continue to win as a real estate investor?

For a moment it looked like these moratoriums were over, and lenders and landlords could rush back into the market to load up on inventory. Now these bans are being extended into next year.

While some may be fearful or uncertain about the future, others continue to enjoy their best years in real estate ever, and keep on growing. How can you best navigate these times?

New Foreclosure Moratoriums

Together the FHFA and CFPB have issued new rules for mortgage servicers. They effectively prevent many foreclosures being filed until at least 2022.

They also put new pressure on servicers to grant certain terms in loan modifications.

However, note that there are exceptions. Private mortgage loans are not subject to these rules and bans. Nor are vacant properties, or those on which borrowers have defaulted during trial loan modifications.

Overall CoreLogic has been reporting that mortgage defaults have been declining since April anyway. With default rates less than a quarter of than in 2005-2008. Suggesting these moratoriums may not be necessary at all anyway.

New Eviction Bans

At the beginning of August 2021, and despite previous bans being ruled unconstitutional, the Biden administration worked with the CDC to create a new eviction ban.

This new ban is said to last until November 2021. Effectively, ensuring no tenants will be evicted until sometime in 2022 at best.

This ban is said to be selective and not apply to every county in the US. The Realtors association has already reportedly filed a lawsuit against it. Many more lawsuits are likely to follow. Though, with the government already ignoring judge’s rulings which have deemed them illegal and unconstitutional, it’s unclear how much good they will do, even if they win again.

For Landlords

Some landlords are certainly speaking out against these bans. Especially, when tenants are choosing not to pay the rent, and are spending the money on boats, new trucks and even bigger TVs instead.

However, most landlords, especially those with bigger portfolios appear to be reporting strong performance levels, with few defaults.

Of course, those that are getting the rent paid by the government in one way or another are doing just fine, even if tenants are not paying themselves.

Though perhaps one of the biggest concerns may be how to manage out of state income properties if new travel bans are reinstated as well.

Real Estate Wholesaling

Real estate wholesaling certainly seems to still be the lowest risk, and most profitable strategy among all of this.

Using transactional funding wholesalers have almost no risk in making offers and flipping properties. So, line up your funding, and find sources of properties which you can flip. Including vacant property.

As for who to wholesale deals to, you may focus on rehabbers, retail, and landlords experiencing good performance, and may be using Section 8 or short term rentals instead of old annual leases.

 

While there may have never been a stronger real estate market, there are certainly some quirks happening out there. Where do you get the money to fund your real estate deals now?

New federal mortgage servicing rules may be exasperating mortgage lenders, while landlords continue to try and battle for evictions. At the same time, banks like Wells Fargo have either increased credit requirements for loan products, or have ended loan programs like the home equity line of credit. More recently Wells Fargo just surprised its customers with a last minute notice that it will be cutting off all personal lines of credit.

Plentiful Deals, High Demand

While some types of inventory have been tight, and prices have hit new record highs, there are still plentiful deals to do. In fact, with many home flippers sitting on the sidelines over the past year according to Bloomberg, there are still endless investment deals to be done. The retail market may finally be moderating according to NAR and the latest data, but right priced properties are still in high demand.

There’s a whole buffet of deals to be done, and scaling up volume now while the end buyer market is still there seems like the intelligent thing to do. For most it is just about having all of the capital to do it.

Transactional Funding

Transactional funding is still available for real estate investors. This is the easiest investment capital to get your hands on to fund your deals.

Best Transaction Funding doesn’t require a credit score, appraisal or income verification. That means no headaches if you missed some work or your income stalled during the pandemic, your bank hurt your credit by cancelling your credit line, or you just load up on too much toilet paper and other supplies on your credit cards. You can make offers with confidence, without worrying about appraisal issues, while being able to close in just days.

Real Estate Wholesaling

Transactional funding is specifically designed for real estate wholesaling. The lowest risk and highest reward real estate strategy to deploy in this current market.

Whether you are just getting started, need to fill gaps in rental income while waiting on evictions, or need to put lump sums in the bank to make up for lost credit lines you were counting on to finish rehab projects, wholesaling could be the ideal solution.

 

 

More tough news for landlords and house flippers point to real estate wholesaling as the best possible investment strategy, this year and going forward.

There are many ways to make money in real estate. We hope house flippers and private landlords continue to participate in the market. They are some of the best exits and end buyers for wholesalers. Yet, right now, and for the foreseeable future it appears that wholesaling is the best play for minimizing risk, and maximizing the upside.

Rates & Inflation

Despite the fact that 83% of consumers say that they are already worried about inflation, and analysts have been saying we have already been in a period of hyper inflation since last year, the government is hungry for more of it. Treasury Secretary Janet Yellen wants interest rates raised to cause more inflation. The Fed says it is moving up its timeline for new rate hikes, but wants to see more inflation first.

So, get ready for whatever is faster and bigger than hyper-inflation.

That can be good for rental rates and those holding real estate in some cases. Though it can also crush markets, just like it was set up to do going into 2008.

A New Eviction Ban

Despite the previous eviction ban being ruled an overreach and unconstitutional the Biden administration has just instituted a new eviction moratorium through July. There is also talk of a “whole of government approach to eviction prevention/diversion.” It’s not clear exactly what that means, but it appears all rules and assumptions about the private rental property market and industry have been shredded.

No one wants mass evictions and foreclosures. Though there is little pity for wealthy executives squatting in $5M mansions in The Hamptons. With virtually zero unemployment there is no reason for any renter household not to be able to pay the rent.

Unfortunately, the current unprecedented trend in historic use of powers to control private property suggests no end is in sight. If the intention is to prevent any evictions permanently, either the government will have to start paying rent on all rental properties in America, or may have to seize them by eminent domain and give them to the largest private funds to manage them as public housing projects.

There are common sense and legal ways to throttle even 15M new evictions and foreclosures. Such as slowing down the courts and pacing them out over a period of years. That could avoid a crisis, and current demand would easily absorb any new inventory coming into the market.

Home Sales Slide For Fourth Month In A Row

May marked the fourth month of home sales declining. This may be surprising going into what ought to be the peak buying season. Yet, house prices have just kept on rising.

On the bright side, less competition from retail home buyers means more acquisition opportunities for real estate wholesalers, and more negotiability.

With this latest news many landlords may decide they have to sell units as-is, even with non-performing tenants in place. That can make for great discounts for wholesalers who are willing to turn them around.

The Bottom Line

The current environment is clearly not friendly to house rehabbers and landlords. To lower risk, and make money faster than inflation, wholesaling seems to be the only logical answer. Fortunately, these same challenges could be creating more buying opportunities for wholesalers too.

 

The market has been waiting for a real estate correction. What are the best strategies and moves to make when you need to make money, but aren’t sure when the dip is going to happen?

The Next Shift

Despite the media drooling over competitive housing markets and fast growing property prices, experienced investors have been warning that the distress hangover triggered by the events of last year still haven’t begun to kick in yet. Even regular individuals have been watching and shaking their heads on the sidelines as they see property prices balloon to mind blowing sums.

There are a lot of things driving this craze. There are fundamentals which may be supporting this activity and are making it more sustainable than the run up to 2008.

However, the latest round of data is already showing signs of a slow down. Robert Shiller of the Case-Shiller Index said March 2021 house prices grew at their fastest pace in 15 years. While he hasn’t forecast an immediate crash, he does predict a coming correction that will cause some pain as people watch their home values drop.

CNBC reports that home sales volume already fell by almost 3% in April 2021. That’s coupled with the Wall Street Journal’s Marketwatch observing “pending home sales sink as the housing market falls back to earth.” Pending home sales fell by 4.4% in April, and are a leading indicator of the direction of closed home sales in the months ahead.

April ought to have been a busy month with more new listings, and plenty of cash in the market as home buyers enjoy getting their big tax refund checks.

This suggests that the next correction could have already begun. Though there are also factors which could stretch out the current run for another year or two.

What To Do

Real estate wholesaling is the obvious play here. It allows you to get in, out and paid fast.

Though how you do it can make a huge difference in how much you can make, versus setting yourself up for financial disaster.

Fully leverage acquisitions: Keep cash to market for volume, maximize sales prices, and maintain emergency funds and liquidity.

Sell first and fill the orders: This strategy is often called reverse wholesaling.

Use back to back closings: So you don’t get caught holding the hot potato.

 

Buy low: Build in a cushion for change. Though don't sit on sidelines when properties are going up in price daily, and some are doing instant flips at market value.

 

The opportunities are massive in real estate this year. How can you move faster to take advantage of them?

According to Realtor.com 10% of all US homeowners plan to move this year. Around 75% have already taken steps to prepare to sell. That’s the makings of a record year. Don’t miss out on it.

For many this means being able to work faster. To get more done in less time, and to shorten the sales cycle. Here are five ways to work on that.

Automate Your Content

As we covered in one of our recent blog posts, all of today’s biggest and fastest growing businesses are now really content businesses. So is yours. It is just a matter of how well you are doing at this critical part of your business. How much quality and interesting content are you putting out each week?

Hire great people, tell them the goals you want to achieve, empower them to do their best work, and get out of the way so it is automated as much as possible.

Create Channel Partnerships

Going big and fast in wholesaling is about having a consistent flow of deals on the buy and sell side. Can you find sources and partners who can give you and take from you 10 or more deals each and every month?

Delegate More

Chances are that you are still the one that is slowing down your business the most. There is little if anything you can’t or shouldn’t delegate today. As a real estate business owner, you are more like an investor or orchestra conductor. Your job is to help others scale and go faster in their roles. The results you get will scale directly in line with that.

Offer Tax Saving Opportunities

People are already being smashed with historically high new taxes this year, and it probably is just warming up. Between new taxes, higher income, property and sales taxes, and capital gains taxes potentially reaching close to 60% in some states this year, people are desperately looking for solutions. How can you help them legally pay less tax when they sell a property to your, or buy one from you?

Remove The #1 Risk Factor For Buyers

What is the number one perceived risk and fear that is preventing more buyers from buying your deals? How can you take that risk out of the equation to move more units faster?

 

This is the year to be supersizing your real estate investing business.

If you thought last year was big, this year should be even bigger for you. If you missed out on the massive surge last year that saw many investors, and the whole market setting records, then don’t miss out this year.

The Market

Last year saw almost 7M homes being sold. Property prices hit new highs, and most wholesalers couldn’t keep enough inventory on the shelf to meet the demand of their buyers.

Looking at the state of the current market and the outlook for this year, the fundamentals are all lining up.

We have:

• Low interest rates

• Plentiful capital, cash and equity in the market

• Record setting demand

• Large amounts of supply in private marketplaces

With the USA forecast to outpace most of the world in economic growth this year, we can also expect a massive resurgence of inbound international investment.

There may be holes in the market which are suffering as millions of households restructure this year. Though there are also just as many, if not far more housing markets benefiting from this shift.

Are You Thinking Big Enough?

Often the only thing standing between an investor and far bigger goals and rewards is thinking big enough.

Like, often when people first get into real estate they think $1M is a lot of money. A year in they realize that isn’t much at all. There are other people out there not only shooting to build billion dollar businesses, but $50B to $100B plus businesses.

If you aren’t sure if you are thinking big enough, then consider these two recent deals.

One Miami restaurateur just sold a single family home within 24 hours of listing it, for $12.5M, after multiple offers. He had purchased the place for just $3.59M. Not a bad margin on a single deal.

Then there is the fund that just bought an entire new home development of 124 houses for 50% more than the builder expected to get for the homes individually on the retail market. This now seems to be a common practice in which big funds are bidding over overpriced deals and are borrowing hundreds of millions of dollars to do it.

Now we also have pension funds and other institutions which used to invest billions in office space looking to move into residential. Some builders are now tracking how much they are wholesaling in bulk each quarter.

How Do You Make The Leap?

Start with big goals.

Expand what you are looking at in size and volume. Don’t think about what you can afford, but instead how and where to get the funds. Then get busy building your network of bigger buyers and sellers.

 

There is one factor that is by far more important to your success in real estate wholesaling than anything else. Do you know what it is? Do you have it?

It’s true that marketing is incredibly important. Being able to find deals is essential. Knowing your market data and values can make or break you. Yet, there is something far more important and pivotal for your success in real estate wholesaling.

This is truly knowing your customer.

Specifically, knowing your end buyer for your house deals.

Why It Matters

You can’t market well, pick deals to buy well, run the math accurately, systemize or have a predictable deal flow and income unless you know your end buyer customers in depth. You just can’t.

Failing here will cause you to bleed out your budget on all fronts. It will take you far longer than it should to sell properties. You’ll burn contracts and relationships on the buy side. Your reputation will get crushed.

Not to mention the fact that it only takes being stuck with a property or two to sap all of the profits you may be making on other deals. It is extremely risky.

Then, even if you do get lucky a couple of times, failing to really know your customer means that you cannot scale your business and income.

What Does Knowing Your Customer Mean?

So, what does it mean to really know your end buyer customers?

It means knowing as much about them as possible. Intimately and granularly.

You should know your demographic data. At the most basic you should know how many potential target customers you have each month and year. You need to know what their likes and dislikes are, where they hangout online, their preferred ways to communicate, and more.

You need to have absolute clarity on what their real pain points are. What their goals are. Plus, what their ability is to leap this gap with you.

For example, are they buying from you because they desperately need somewhere affordable to live? Or because they need deal flow for their rehabbing and flipping or rental property business? How much can they really afford monthly and as a down payment? What are the fears and limitations holding them back? Is it finding someone to trust, unknown repair issues and costs, or finances?

Ace this, and everything else will fall into place.

 

Check out these developing real estate trends that could continue to change how investors participate in the real estate market, and the best strategies for balancing risk and reward.

Developers Kicking Out Pre-Construction Buyers

Just as we saw in the run up to 2008, big real estate developers are again finding ways to pull contracts from buyers as prices have risen during the building period. With prices up some 20% or more, builders see a great opportunity to back out of contracts with pre-construction investors, and then try to resell units at new market highs. This is a huge burn to those investors who took a chance on them. Investors who will be looking elsewhere for deals with their capital.

Construction Material Costs Rising

The dramatic inflation over the past year hasn’t just been limited to groceries. A surge in home repairs, remodeling, building and emergency maintenance has driven up the price of construction materials as well. Walk around your local Lowes or Home Depot and you may find some line items are priced at 2-3x what they cost last year. This can be quite a shock to rehabbers when they go to pick up materials for a new deal they just bought and find the numbers no longer work. Expect this to encourage more investors to stick to wholesaling real estate and wholesaling direct to end retail buyers.

Extended Eviction Ban

The new white house administration recently extended the national eviction ban at least through to July 2021. While many landlords may still be surviving on multiple layers of government stimulus, these unprecedented measures have certainly changed everything they thought they knew about the security of passive income assets. Many will liquidate their rental portfolios. Others may switch to shorter term investing strategies that don’t rely on tenants.

Housing Inventory Shortages

While there are many commercial buildings which are now ripe for being converted into housing, many markets are finding they are currently suffering major inventory shortages. Florida in particular saw listing inventory drop around 50% in 2020. Many markets only have 4-7 weeks of inventory. This in turn is driving up prices fast, with intense bidding wars common. While this demand remains strong, expect prices to keep surging until they become unsustainable.

Ongoing Lockdowns & Restrictions

Ongoing restrictions in some states, along with rising taxes and increased demand for single family homes instead of apartments and condos is likely to continue to drive moving and buying activity. This will fuel great leaps in prices in target cities, while alleviating inventory shortages where people are leaving.

All put together these trends suggest that real estate wholesaling will offer even better risk-reward balance through 2021. It offers high short term returns, and far less exposure to the risks plaguing other strategies. All with plenty of leverage available.

 

Thanks to the COVID-19 pandemic, many 2020 graduates are having a hard time following their original plans. Employment options are scarce, and money is running low.

Real estate wholesaling can be a platform for professional growth, income and an opening to a different career path. It requires no previous real estate experience, no construction knowledge and can be done COVID free. It may be a more unconventional path for those who recently went through college and thought they were headed to corporate America, so how does it work, could it be for you?

Wholesaling is a practice popular with rookie investors and experienced real estate enthusiasts alike. The wholesalers essentially work as the middlemen of the real estate world. They are in charge of finding good properties, assessing them, and selling them to other real estate investors and home buyers..

How does it work? Through networking, both with acquaintances and online, attending REIA (Real Estate Investors Association) meetings, marketing and new online tools the wholesaler meets people interested in selling their property, and people interested in buying it. The best properties for wholesaling are those which are undervalued or are owned by motivated sellers..

The wholesaler will meet with the property owner (virtually or in person) and, once the price is determined and the owner agrees to contract conditions, the wholesaler negotiates a deal with a final buyer and creates a percentage profit for themselves.

While wholesaling requires no experience, it takes some marketing, making it a perfect opportunity for business and communications majors alike. A successful wholesaler needs to sell their property and themselves to their clients. No one will sell to or buy from an unprofessional or untrustworthy person. The wholesaler creates rapport by listening to the buyers’ needs and offering them properties of their preference. They treat their property owners respectfully and list the contract conditions clearly.

For graduates looking for an income and career with minimal risk and high returns, wholesaling may be the steppingstone to their new lives.

Best Transaction Funding also offers a referral program which enables you to earn simply by referring other wholesalers to lenders who will provide them 100% of the funds they need to buy property.

 

This year’s historic events have driven more interest in real estate investing and need to switch investment strategies than we’ve seen in at least 12 years. Where can you find the money to keep going or get started?

If anything real estate has only become stronger and has headed up faster as a result of recent events. More people are on the move than ever. Everyone from individuals to investment funds are looking for the safety and perks of real estate.

However, even those who were doing very well in real estate pre-COVID are switching up their strategies. Everyone wants to protect their capital, and needs more income. Many flippers and landlords are switching to real estate wholesaling. It is also the perfect strategy for those who are just starting out and may have lost jobs.

Of course, common wisdom says “it takes money to make money.” It doesn’t necessarily have to be yours though. So, where do you get it from?

IRAs & 401ks

New CARES Act rules and other changes due to COVID-19 are allowing individuals to tap even more of their retirement savings to move it to safety in other investments, or borrow against it. Those with 401k plans can now reportedly borrow up to 100% of their account balance, or $100k. This money can be used to invest in real estate. You may also have a couple more weeks to contribute to these plans and reduce your taxes, while improving your income. If this money is currently in the stock market, it is still exposed to some serious potential volatility.

If the Dow Jones just drops back to 2015-2016 levels, it could lose another 7,000 to 10,000 points. Or close to half of your portfolio value.

Partners

Partnering up is a common way to get started or grow in real estate. A few people can pool their money together and split the rewards. Or course, right now, many people are trying to preserve cash and may be leaner on savings than they have been in a while.

Traditional Mortgages

Traditional mortgages and even hard money loans could be a way to fund a move into real estate. Unfortunately, major banks have tightened up their criteria. Some have stopped home equity lending. It is noticeably more difficult to borrow from these sources than at the beginning of 2020. Though interest rates are extremely attractive if you can borrow.

Transactional Funding

In contrast, transactional funding is still plentiful. The best transactional funding lenders are still offering 100% financing, and credit and appraisals or lost jobs aren’t a problem. It’s a super easy way to fund your deals, while minimizing risk, and maximizing upside potential and returns.

Get in touch today to find out more about getting your approval, proof of funds letters and VODs to get more of your house offers accepted.

Plus check out our referral program that pays you when you share this great resource with others.

 

 

How can you boost your deal volume and the dollars coming in as a real estate wholesaler right now?

Many property investors are struggling to adapt to the new landscape. For many, their normal channels of business may have been disrupted and may or may not be for quite some time. The good news is that you can keep up and even grow your deal flow and income.

One way to do this immediately is to step up to help other investors. They are struggling too.

One of the most significant members of this group are landlords. Many have tried to step into this business since 2008. Many were tricked into thinking we wouldn’t face another turn in the cycle. Or they grossly overpaid for properties. They had no sustainability plan for something like this.

Many bought places relying on overpriced Airbnb rents. Most of that market has disappeared. It’s even illegal in many places right now. With unemployment heading for 50% or more, at least 30% of renters didn’t pay their April rents by the 9th of the month. Eviction bans mean they can’t get occupants out. Even more than not being able to weather this financially, landlords are scared.

They want their cash out. They can’t get good terms on refinancing, if they can even get loans at all. They need liquidity. You can buy their properties and bail them out.

Then flip  them to investors who are buying. There are plenty who are. Especially big funds. In NYC one family just bought 8 condos they plan to rent out after the crisis. You can even do this in bulk. Put together the portfolios to sell at once to a bigger buyer.

Best Transaction Funding is still funding deals. We find 100% of your purchase price when wholesaling properties.

How are you growing your business now?

 

2020 is looking like another fantastic year for most real estate investors. If you have even bigger goals for deal volume and profits this year, here are the financing options that can help you achieve them.

1. Transactional Funding

Wholesaling is about speed and volume. Conventional mortgages and types of funding just don’t work when you need to go fast. Yet, with the right leverage, you can be working a virtually infinite number of deals at the same time, skyrocket your cash on cash ROI, and lower your risk at the same time.

Transactional funding is the optimal solution for this. Get 100% financing for your deals, without any of the hassle of other funding channels.

2. VA Home Loans

While many real estate wholesalers focus on flipping to other investors, selling retail has huge advantages in this market too. You can get a lot more for your properties. A recent change in mortgage lending could really help open up this opportunity even more.

VA home loans have been great for veterans and their families. They provide 100% financing with no down payment, and the ability to financing in closing costs. All with pretty lenient underwriting.

Finally, the VA has just removed their loan limits. That means no cap on how much veterans can finance on 1-4 unit properties. So, they can be used for 100% financing on small multifamily properties for $1M and up. This will also help many veterans start getting into real estate investing.

3. Personal Loans

Many wholesale properties are so cheap that the problem is no end buyers can find a mortgage loan small enough to finance them. Banks don’t want to do mortgages that small. Though they might be just out of range for an all cash purchase.

Fortunately, many banks, lenders and credit unions are being very aggressive with unsecured personal loans. In many cases buyers can go get a $20,000 or $40,000 or more personal loan and pay cash for a property.

4. Business Lines Of Credit

If you are wholesaling to other investors who have a lot of their capital tied up in other deals, you might want to let them know about merchant cash advances and working capital loans. If they’ve been doing business and flowing money through their accounts, they could get tens of thousands of dollars or over $100k to act as a cash buyer.

The more you help your end buyers get financed, the more deals you can sell, and the more of an indispensable partner you become.

 

A flurry of new laws are forcing real estate investors to adapt or be regulated out of their niches or entire businesses. Here’s what you need to know…

These are just some of the recent legal issues, new rulings and proposed laws that might make you want to restructure how you do business, your real estate investment strategy, and where you invest.

ADA Lawsuits

ADA lawsuits have been crippling businesses for years. This is especially true in California where they are rife and there are many professional ‘hitmen’ who are making a full time living from suing business owners. Yes, equality is important and so is providing reasonable facilities to those with disabilities. Yet, some of the mandates put on businesses now may catch you by surprise. Some investors may have thought they were in the clear by only operating online. A recent lawsuit against Domino’s pizza changes that. The supreme court shutdown an appeal by the company which is being sued by a blind man who says he couldn’t use their website.

Education

A recent suit against a real estate education company linked to two reality TV stars may shake up some of the many giant guru businesses that have popped up over the past decade. This is not a new concept. Though it is a warning to be very careful about the information you provide to others, and the legal risks of sharing real estate investing education. Especially if you are charging for it.

Hiring Help

The California Trucking Association just filed a new lawsuit appealing new rulings that could kill off 70,000 member jobs. The new employment rules aim to make it difficult for Californian companies to hire independent contractors instead of full time employees with benefits and protections under that classification. It is also an issue for Uber and giants like Apple and Amazon whose workforce includes many remote workers and contractors. There may have been some bad actors forcing contractors to work like employees. Though a new law of this severity could also kill off much of the progress made in the gig economy and millions of jobs. All while making it less desirable to hire people. Real estate investors may find a work around in asking their freelancers if they have a company they can bill as an outside vendor and service provider instead.

Taxes

Real estate investors also need to watch out for new taxes. If Bernie Sanders wins the 2020 presidential election he says he’ll implement a new 25% tax on house flippers, a vacant property tax, and new tax rate of 52% for high income earners. Investors may be able to avoid many of these bankrupting new taxes by switching from buy and hold and flipping houses to real estate wholesaling instead.

Rent Controls

California and New York have recently brought in sweeping new rent controls and protections for tenants that may prevent them from being evicted. That dramatically increases risk for lenders on properties there, and could put buy and hold investors in the red for a very long time. Expect this to push more to investing in other states in 2020.

 

Wholesaling is pitched as one of the easiest and fastest ways to get into real estate and get paid. Finding deals and finding buyers in this market may not be too difficult. If the price is right, the property will sell. That just leaves the question of how you’ll fund your deals.

More and more investors are finding that sellers and buyers try to cut them out when they attempt to assign contracts, and aren’t closing on the buy side first. Here are five ways to finance your wholesale deals, and some of the pros and cons of each options.

Cash

You can use your own cash to finance deals like this. It can be extra cash on hand, retirement savings in a self-directed IRA, etc. It may be the cheapest option. The downsides of this are you’ll never be able to fulfill your full potential. You will be limited on the number of deals you can do at a time. You are bearing all of the risk or getting stuck with a deal. You won’t be maximizing your full ROI potential by using leverage.

Conventional Mortgages

If you’ve got awesome credit, plenty of assets, and a perfect income profile, there’s a chance you can walk into a bank or mortgage lender and get a conventional type loan. The problem is that few will close fast enough for you. It may take 30 to 60 days to close. Far more than the 1-2 weeks most sellers will expect. You are also going to need appraisals and maybe an inspection. Repairs and low loan amounts can quickly trample your loan application. Not to mention the high closing costs.

Hard Money Loans

Hard money is great for house flippers and distressed properties. It’s typically fast. Though you’ll still need skin in the game with your own cash, and likely the money on hand to prove you can afford the rehab. It’s expensive money, though that may not matter too much if you are in and out before the first payment is due.

Private Money

Private money is highly desired by real estate investors. True private money (not hard money lenders advertising ‘private money’) can offer great fluidity and flexibility in funding deals on the fly and on great terms. Once you start doing great at wholesaling, you’ll eventually find these people wanting to fund you and put their money to work to share in your profits. Just be wary of taking the long detours and getting distracted with trying to raise money instead of getting right into investing.

Partners

There are many potential benefits of partnering up with others, especially if they are bringing all the capital. Just be sure you get everything in contracts and writing to minimize the damage of future partnership breakups. Do the math carefully on your returns and how that compares to other options. Having a partner who will fund 100% of your deal is great. Though, if you’re giving up 50% of your profits, that may be far more expensive and less profitable for you than financing it.

Transactional Funding

Transactional funding provides 100% financing for real estate wholesalers. All with no appraisals or any of the underwriting hoops you’ll find with hard money lenders or conventional bank loans. It can be a lot cheaper than you think too. While giving you the ability to close in just a few days. That means you’ll be able to beat the competition with better offers, and keep all the profit.

Get in touch with Best Transaction Funding today and get your free proof of funds letter to make your next offer...

 

Spring is officially here! Try out these strategies to boost your real estate wholesaling business now…

Hop to it While the Market is Good

We’re still in tax refund season, there is still likely more negative data to come out after the end of the quarter showing the new trajectory of the housing market. Get more inventory and flip it before more buyers are scared out of the market.

You can use Best Transaction Funding to scale and move fast without being limited by funds. Set a goal of making at least 5 offers a day. If you are already operating at that level, up your numbers by 5.

Spring Clean it

Try spring cleaning and prehabbing your deals to create a blank slate. It’ll be a lot easier for buyers to visualize the potential and can add a lot of perceived value to properties without costing you much.

Invite Them Over for Easter Brunch and an Egg Hunt

Build your brand and relationships in your community and target neighborhoods. Host an Easter egg hunt or brunch, and get to know people on personal basis so they come back and refer you when needing to sell.

If you are really doing well then maybe you can afford to give away the keys to a wholesale home in one of your golden eggs.

Get Out Those Easter Gift Baskets

Send out Easter baskets to potential referral sources and cash buyers. Hand deliver or ship them. It doesn’t have to be costly, but be more creative than just an Easter card. Stay top of mind, and look to open direct lines of communication via phone or text versus just Facebook or email.

Like these strategies? Look out for tips on making most of Mother's Day for real estate wholesalers...

 

 

Still grappling with taking the leap into real estate wholesaling? Here’s how to do it, and why you shouldn’t waste another minute…

Real Estate Wholesaling

Wholesaling is still one of the best ways to get started in real estate. It’s considered the lowest risk method, and fastest for generating large profits. As a wholesaler you get to be your own boss, build your own company, set your own schedule and enjoy the free time you crave, and can make more in a month than most people make in a year.

Of course, despite all of those benefits, many individuals still struggle with actually taking action and getting started.

Option One: Start Slow & De-Risk as You Go

Even though this is likely the lowest risk form of real estate investing and business to get into, new things can be scary. You never know everything about a new venture before going in. It is usually self-doubt and the unknown which really holds people back.

One way to overcome this is to begin with small, but swift steps. Take the risk out, one day at a time. Prove to yourself you can begin building a buyers list. Prove that you can find deals out there. Line up your transactional funding. Outsource anything you need help with if you are still working another job. Close that first deal, and then go all in.

This is the slower path, but one which may be more comfortable to you. Just note that a lot of people who have done it this way ultimately wish they would have gone faster from the beginning.

Option Two: Just Go All-In Now

The other choice is to just jump in with both feet. Quit whatever else you are doing, stop holding yourself back and get the most benefit from wholesaling sooner.

This way you have to make it work. You’ll enjoy more focus. You’ll have more time to dedicate and get faster results.

Stop dreaming. Just start doing.

Why it Shouldn’t Take Much Courage to Get Started

The truth is that not doing this is much, much riskier. Even if you are currently in a job you like with a good paycheck, that’s risky. Your entire future is riding on someone else. A lot of other people probably. You’ll never really be free. You’ll have to live with taking a pass on your full potential and living the best life you could have.

You really have everything to gain from getting started in real estate wholesaling. More time, money and opportunity to help others. You can get all the cash you need to find deals with Best Transaction Funding. If you go all-in, then neither time nor money is a hurdle. You can learn everything else as you go.

 

The New Year is here! What will you achieve through real estate wholesaling in 2019?

Committing to what not to do is just as important as setting objectives and goals you want to achieve. You’ve got to be just as keenly aware of the things which can slow you down, if you are going to sustain and scale your efforts.

So, set bigger goals, but make sure you are consciously avoiding these pitfalls too…

Work for Less Than Needed to Reach Your Goals

You should have a specific income goal set for the year. You should know what it will take to achieve that each month and week. You should know how much you need to make per hour put in to hit that goal.

For example: If you plan to make $1M in real estate this year, and only work 24 hours a week, you need to make $801.29 per hour.

If it takes you five hours of time to find, fund and flip one wholesale deal, you need to make a minimum of $4,007 per deal to hit your goal.

You can’t afford to spend any time on tasks that won’t return you at least that much on your time. Delegate and outsource everything else.

Forget Basic Principles

There is going to be a lot of temptation to discard basic money, business and investment principles this year. Make sure you don’t fall for it, or you could lose everything you’ve built so far. Make sure you diversify, and don’t speculate and overpay on deals that you could get stuck in.

Get too Comfortable

If your real estate wholesaling is going really well, it can be tempting to get comfortable and become over confident. This is usually when the mistakes start mounting up. Don’t stop learning. Keep expanding your knowledge and abilities in marketing, funding and sourcing deals. There are so many new tools. If you aren’t using them, your competition could easily leave you in the dust.

Get Caught Slacking on Marketing

Marketing is the heart of your real estate wholesaling business. Stop marketing and the blood stops flowing to put new deals in the pipeline and produce revenues. No matter what happens. Don’t stop marketing.

Let Taxes Take the Wind Out of Your Gains

It’s almost tax time again. There are so many breaks and deductions available to real estate entrepreneurs. Make sure you are using them. Make sure you are working to minimize taxes all year, versus rushing to get filed at the last minute.

What are your goals this year? What are you committing not to do in 2019?