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Top Choices for Financing Your Flips

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on Thursday, 03 August 2017
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Top Choices for Financing Your Flips

Short-term real estate investors have to navigate a number of different challenges when it comes to fix and flip funding. Capital is necessary to purchase the home, but it's also necessary for renovations. When it's time to buy a property, fix it up and sell it for a profit, you need to know where to get your funding from.

Using a Fix and Flip Loan

One of the major sources of funding for flips is a fix and flip loan. These come in a variety of forms including:

Hard Money Loans - These are great for all flippers needing quick money, but expensive.

Home Equity Line of Credit - Works well for flippers using an owner-occupied home as collateral.

Cash Out Refinance - A great way to use equity to invest in a new property.

Long-Term Bank Loans - A good choice for buy-and-hold investors, but not great for short-term fix and flip projects

While a loan may seem like the obvious answer, it's not always easy to get the money you need from a bank or conventional mortgage lender.

Partners

Another option is to partner with someone or with a group willing to fund the projects. Sometimes, you can partner with your attorney, doctor or even an investor in the stock market for the funding you need. However, this usually means you will have to split the profits, but it can get you the funding you need to buy and renovate the property.

Transactional Funding

A shorter-term loan used by fix and flip investors, transactional funding provides the necessary funding to acquire and quickly wholesale a property. The loan is usually for hours or days and is one of the easiest to obtain.  Transactional lenders will usually fund 100% of the acquisition costs, and closing costs. No credit, appraisal or asset verification may be needed.

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What Types of Properties Can I Use Transactional Funding For?

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on Thursday, 06 October 2016
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Which types of properties and real estate deals can benefit from using transactional funding?

As the rest of the real estate world and lenders and banks began collapsing around 2008 transactional funding finally became available to the real estate investor community at scale. Transactional lenders, private lenders, and big funds provided essential liquidity and credit to keep the market alive, and rebounding.

More lenders have now returned to the market, and new conduits are popping up with new twists on asset based lending in order to try to keep fund and bank money working. With all these distractions some investors may not have tried the advantages of transactional funding yet, or may not be aware of how sources like Best Transaction Funding can boost their business in the current environment and make more deals possible. So why use this type of funding? How can you use it?

Property Types Your Transactional Lender May Fund:

  • Single family homes
  • Condos
  • Multifamily properties
  • Commercial real estate including; mixed use properties, hospitality, retail, and office
  • Land and lots

Types of Deals Your Transactional Funding Source May Finance:

Transactional lenders surged in demand when the market was over bloated with REOs and short sales. Yet, there are many, many transactions and scenarios in which they may be used right now.

This may include:

  • Vacant properties
  • Banked owned homes
  • MLS listings
  • Hurricane damaged properties
  • Fire damaged homes
  • Wholesale deals and reverse wholesale deals
  • You lender may even fund mortgage notes

Advantages of Using Transactional Funding:

Transactional funding offers many obvious benefits such as 100% financing, no appraisal or credit score requirements, and great speed.

This, and instant POF letters can all help real estate investors make better offers and be better positioned to compete for acquisitions. It also means being able to take on much bigger deals, regardless of your cash on hand. Some may want to begin using this financing tool much more frequently to leverage lower risk real estate investment strategies as the market begins to shift.

How will you use it?

 

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

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Where Can I Find Buyers for My Wholesale Real Estate Deals?

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on Wednesday, 20 April 2016
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Where are the buyers?

There are still mountains of real estate inventory to choose from out there. With unlimited funding available from transactional lenders and hard money lenders the key to unlocking the cash for most is finding the buyers. So where are they?

The 3 Types of Buyers Investors Need to Focus on Now

PROFESSIONAL INVESTORS

Real estate wholesalers looking for qualified buyers, and specifically cash buyers who are easy to work with should absolutely be honing in on serious end investors. They know the business, will either have financing lined up or the cash to move immediately on fair deals, and will often become repeat, high volume customers. Find them online in real estate forums, via social media, and at local investor meetings and meetups.

INTERNATIONAL BUYERS

Tapping international home buyers and investors opens up the world to a massive pool to funnel deals too. Most expect to pay cash, or at least to put down a lot of money. They see American real estate as being cheap, and are often very easy to work with, if you keep it simple. If you haven’t yet, start expanding to market your real estate deals internationally. Check the data and find out who the strongest international buyers are in your market. Hire someone who speaks their language, or find a partner company that can help. Then lead with contacting overseas Realtors, Google ads targeting foreign buyers in those countries, and look for ways to collaborate with Chambers of Commerce and Tourism bureaus.

GROOMING THE NEXT ROUND OF BUYERS

The absolutely biggest and most common mistake that 99% of real estate investors and businesses make, and which invariably cripples them, is only focusing on buyers for this week and this deal.

Savvy investors and businesses owners who continue to thrive and enjoying growing incomes and profits are those that start loading their pipeline years in advance. Most people will buy a home within the next 5 to 7 years. Many will move more frequently than that, and will end up buying second homes, vacation homes, and investments regularly too.

Make connecting, and assisting with preparing to buy and invest a part of your annual strategy. This may include friends, family, ex-coworkers, aspiring investors, recent victims of the foreclosure crisis, and renters.

Start loading your pipeline with these buyers and you’ll find more deal volume this year, and more easy deals to do every month each year after this.

 

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.

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Make This Spring Break Your Launchpad to More Wholesaling Deals

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on Thursday, 10 March 2016
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Make Spring Break 2016 your pivotal moment to wholesaling more real estate deals.

Want to wholesale more real estate deals this year? Plug into these strategies…

Take a Break

Don’t neglect to take the break. It is equally as important charging forward. Take time out this Spring Break to think, set bigger goals, strategize, and recharge.

For those not excited about clashing with hordes of drunken college kids this Spring Break, The Active Times recommends considering these inspirational and relaxing destinations:

  1. Tulum, Mexico
  2. Portland Oregon
  3. Dublin, Ireland
  4. Savannah, Georgia
  5. Nice, France
  6. Playa Tamarindo, Costa Rica
  7. New York, New York
Spring Clean

This is the time of year to kick the old to the curb and to make way for the new:

  • Spring clean your office
  • Restructure your portfolio
  • Clean up, organize, and backup your files
  • Make over your real estate website
  • Update your marketing messages

Capitalize on Easter Themed Marketing Opportunities

Easter is one of the most exciting and powerful times of the year for real estate marketers and wholesalers.

Capitalize on extra online traffic with Easter themed content, blogs, and social media activity. Take advantage of more people being off work, less rushed, and out and about with yard signs, and Easter themed open houses. Host seasonal networking events. Choose from beach themed backyard BBQs for adults, or Easter egg hunts for families. Build those buyer and seller lists.

Line Up New Capital & Finance Sources

Take the time to connect with and line up new capital and lending sources that can keep up with your big real estate goals for the year. Pool private capital, obtain Proof of Funds letters from transactional lenders, get back up hard money lenders lined up, and learn about the best retail home loan programs for financing your end buyers.

Then TAKE MASSIVE ACTION!

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.

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The Keys To Out Of Area Real Estate Wholesaling Success

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on Thursday, 15 October 2015
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What are the keys to successfully wholesaling out of area properties?

Many real estate investors are finding a growing need and desire to invest out of their local areas, and even out of state. For some it is simply for diversification. For others it is a need to find deals with better spreads. It can be a smart and profitable move, and it can be a lot easier for wholesalers than for rehabbers and landlords. But property wholesalers certainly need to make sure that they are prepared before branching out into the unknown.

Know the Numbers

There can be a lot more to the numbers in a destination than a simple snapshot on one day, or a chat with a single local real estate agent can reveal. It’s worth looking into historical data, talking to other local property investors, and even quizzing appraisers. It’s worth a trip too.

Investor Friendly Business Partners

You’ve got to have investor friendly business partners on the ground to ensure smooth transactions. You need them lined up before you go to contract so you aren’t scrambling, and risking missing closing dates. Make sure you have a transactional lenders willing to fund in that market. Make sure you have investor friendly title companies willing to fund your type of deals too. Here’s an investor friendly title company in MI, and an investor friendly title company in FL. Don’t forget inspectors either. If you can’t make it to walk through every deal, you at least need someone you really trust with boots on the ground.

Buyers

Wholesalers will want a buyers list lined up for any new markets too. It may be worth curating a buyers list just for that market instead of spamming good subscribers with deals they don’t want. It can also be more challenging to try and sell investors on an area, and then a property, versus just finding those that already want deals there.

Automation

Look for as many automation tools as you can to streamline your wholesaling business. This probably includes smart locks which can be remotely operated, and online file sharing for documents.

Maximize Your Budget

Be strategic in order to get the most out of your budget. It may pay more to focus on one area at a time, conquer and expand, versus spreading your marketing budget and time thinly all over the map.

 

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.

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Hard Money Loans Vs. Transactional Funding, Which is Better?

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on Thursday, 09 October 2014
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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.

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Real Estate Wholesaling: How to Win Against Multiple Offers

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on Wednesday, 27 March 2013
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It’s a hot time for investing in real estate and there is no question these are not just the optimal conditions for flipping houses, but perhaps the best we have ever or will ever see. Unfortunately, the dramatically improving U.S. housing market is giving many the same idea and competition for homes is heating up.

Nationally foreclosures have fallen some 30% since February 2012 and the National Association of Realtors reports buyer traffic up 40% as of the beginning of 2013, while pending homes sales continue to rise.

This is causing multiple offer situations to rise rapidly from coast to coast. We are no longer just taking about 3 or 4 offers coming in on homes over a period of weeks. Realtors are frequently reporting a dozen of more offers within hours of homes going online on the MLS. In one of the most dramatic cases recently a West Coast real estate investor reported going up against 80 other cash offers and even bidding $15,000 to $20,000 over asking price with little hope of even receiving a counter offer.

So how can investors bid and win in among stiff competition like this?

With at least 30% of all real estate transactions being in cash today it is clearly a disadvantage not to be able to act as a cash buyer in this market. Fortunately using transactional lenders can enable wholesalers to effectively act as cash buyers with flash funding and Proof of Funds letters to back them up.

Sometimes it’s about price, other times it is just matching the seller and their agent’s desired timeline and quirks. Often they want to see higher deposits or fewer contingencies to prove how great a prospective buyer you are or it might just be a matter of spinning your personal story.

Another major part of this issue that many don’t understand is that Realtors often refuse to even present offers unless they are gaining both buying and selling side commissions and are effectively doubling dipping. While this certainly isn’t fair for the seller who is normally unaware, the best tactic for overcoming this is to make more direct Realtor connections and make sure you are always dealing with the listing agent, not a buyers’ agent.

Another major reason for such dramatic bidding wars is often the price range and property type investors are targeting. Their focus is often on the ‘bread and butter’ 3 bedroom, 2 bath single family home that also butts heads with the 30% of the market that is made up of first time home buyers. Perhaps targeting a different price range or property type could yield better deals with less competition.

Note that there are also many areas of the country where foreclosures are still spiking by double and triple digit rates and could offer many more choices and bigger discounts. This includes Washington, Florida, New York and others.

Of course switching acquisition strategies from bidding on publicly marketed properties to targeting off market properties and homeowners directly can also make a world of difference.

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7 Tips For Successful Real Estate Investing

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on Tuesday, 12 July 2011
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1. Have A System
Don’t just have a plan, have a system that with enable you to operate efficiently and rapidly grow and scale your real estate investing activities. This way one day you can even begin franchising or sell your business for big bucks.

2. Find A Great Funding Source
Even if you are getting into real estate investing cash rich at some point you are going to want to use leverage to do even more. So find a few great funding sources for your acquisitions including conventional mortgage lenders and banks as well as private lenders and transactional funding sources.

3. Build Relationships & Partnerships
Loyalty goes a long way in real estate investing. Plus the more business you give one company whether it is a transactional lender or Realtor the better deals and more flexibility you will find. You can also bet that having a good relationship with your vendors can also help you pull off even faster closings and flash funding when you really need to get a deal done ASAP.

4. Inspections
You have heard it before, but it really can’t be said enough - always get inspections done no matter how many deals you have done before and how fantastic a condition the property appears to be in. This also applies to walk-throughs. You never know what can happen between the time you sign the contract and you hand over the cash.

5. Don’t Alienate Real Estate Agents
Some real estate investment courses have portrayed real estate agents as the enemy and too costly to deal with. However, in reality they can often find you great deals, save you plenty of time and even help you find the best flash funding sources when you need quick financing to close on your flips.

6. Always Be Networking
Sometimes it is really who you know, not what you know that brings you great deals and helps you get them closed. Your success in real estate investing will directly relate to how many new contacts you can make each day.

7. Keep Building Your Marketing Skills & Knowledge
Today the deals go to those who are great at marketing themselves. So keep on top of the latest trends, embrace social media and mobile marketing and get out there to win the most buyers and sellers.
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