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Real Estate Wholesaling Is For...Billionaires

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on Thursday, 07 January 2016
BestTransactionFunding

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.

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7 Reasons Savvy Real Estate Investors Are Sticking To This Loan

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on Wednesday, 04 February 2015
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Why are savvy real estate pros sticking to this investment property loan?

Over the last couple of years we’ve seen investment property lenders and loan programs expand. Over time they should continue to soften requirements for retail buyers and higher LTVs ought to make it easier for investors to scale more quickly. However, many of the most experienced appear to be sticking with transactional funding. Why?

Separation From Personal Finances

Those that are really serious about investing and long term success know the advantages of separating business and investment income and assets from their personal every day ones. This can help insure income and preserve wealth when issues arise. Lenders like Best Transaction Funding will fund your business entity to facilitate this extra layer of protection.

You Don’t Need to Have Perfect Credit

Few came through the recent crises with their credit unscathed. This doesn’t mean that they aren’t normally responsible financially, or aren’t good borrowers. Most lenders and banks can’t overcome their broken systems to make common sense loans, even though Q4 2014 data shows the national average FICO score remains in the low 600s range. Transactional funding generally doesn’t have any credit score requirements, and can be exactly what new and returning real estate investors need to get going.

100% Financing

Best Transaction Funding provides 100% financing for flipping houses. In fact, some are even able to finance in their closing costs for zero down deals and instant profits. With easy qualifying it’s really a no-brainer, and it sure beats investors trying to be overly creative and landing themselves in jail due to real estate fraud in an effort to get mortgage loans they shouldn’t.

Checks the Boxes of Golden Investment Principles

Transactional funding checks the boxes when it comes to sticking to several of the most important real estate investment principles. Perhaps above all it helps investors ensure they don’t deviate from making their money when they buy. Sticking to wholesaling in this manner they are virtually guaranteed a profit before they close.

No Long Term Debt

Building on the above; it means not taking on long term debt. While this may be a ripe time to scale and leverage, those that survived the recent downturn know not to fall for the trap of leveraging themselves up to the eyeballs.

Related: 4 Unique Advantages of Wholesaling Houses

Speed

One real estate startup recently claimed to be launching on the ‘uniqueness’ of being able to close mortgage loans in just 20 days. While that may be faster than some conventional banks right now, it’s still very lengthy. At least compared to this type of funding which can put cash in investors’ hands in as little as 3 days.

Reducing Liability

In addition to the separation of ‘business’ and personal interests, transaction funding reduces liability by keeping investors liquid, and enabling them to scale without depleting cash reserves. It can also help in negotiations and when there are hiccups with closings. This can be just as powerful as the benefits in making more gains.

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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