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...

Can transactional funding lenders and crowdfunding campaigns be used together for even greater results?

The debates over alternative and hard money lenders and crowdfunding portals bumping heads are increasing. Some have posed that crowdfunding can offer cheaper money. Others recognize that successful crowdfunding campaigns can cost a lot of money, and can be extremely time intensive, not to mention slow to fund. Some debate whether one of these capital sources will replace the other.

Could they actually work together? If harmony between these funding options possible? Could both transactional funding and crowd funded capital be used in the same deals?

There are a number of obvious differences between these two types of borrowing. Transactional funding lenders can sometimes charge higher rates in exchange for faster service and ease of obtaining cash, depending on the individual scenario. In contrast crowdfunding can offer the advantages of having many different parties involved in your project (some may be hard money lenders too). But expect to spend 10% to 30% of the funding goal on marketing, and keep in mind that it can take months to secure finances through this channel.

The truth is that there is not one answer to the transactional funding versus crowdfunding question. That’s like asking if food or drink is better. You probably need both. You’ll need or want each at different times depending on the situation and timing.

Perhaps one of the best blended strategies for investors in this arena is making an acquisition quickly with transactional funding, and then once the real estate is controlled – paying off that loan with funds from the crowd. Investors can also augment hard money they receive by raising the down payment from the crowd, or raising additional funds to make improvements from the crowd. Or crowdfunding campaigns can be used to improve a surrounding area; to aid in revitalization and elevating property values. How about using hard money to cash out the crowd and return their capital?

 

The options are endless. Perhaps these strategies and tactics are what more of the media should be focusing on to actually serve real estate investors well.

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of flash funding and hard money loans for real estate investors in America. Get a quote, and fund your next deal fast…

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.

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

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.

How can you save our real estate transactions when your financing hits hurdles?

Real estate financing may have become marginally easier to obtain over the last year, but that doesn’t mean that everything will always flow smoothly. Often small quirks can easily be overcome. In other cases the deal just hits a roadblock. Experienced real estate investors learn to recognize the difference. So if your current mortgage loan app is at a dead end or stalemate, how can you save your deposit, funds invested in due diligence, and get the deal done?

1. Tap Retirement Funds to Put Down More Money

In many cases getting a loan is simply about an acceptable risk level for the lender. Many other factors can be overcome if buyers are putting down more money. This can help outweigh being light on assets, having high debt ratios, or weak credit. One of the places to tap extra cash to save the deal is retirement investment accounts. If you are purchasing your own home and are a first time buyer you may be able to tap your 401k or IRA without triggering any taxes. As an investor, rolling over to a self-directed account can make the whole deal even more profitable.

2. Partner Up

If your deal is on the rocks, a conventional loan isn’t an option, but you don’t want to lose the opportunity consider bringing in a partner. If the deal is that good there should be no shortage of potential partners willing to come in with the cash to complete. This can be friends, family, local private lenders, crowdfunded capital, or other peer investors you find online or at area groups.

3. Hard Money Loans

If your original financing is caught in the weeds due to technicalities and paperwork quirks try hard money loans. This offers far more common sense underwriting, and a hard money lender could swoop in and save your deal, and close in just a few days.

4. Transactional Funding

Transactional funding could really be the ace up the sleeve of many real estate investors when they need to close on a deal fast, but don’t have extra cash to put in. Transactional lenders can provide up to 100% financing, with no new appraisal, and can close in just days. It may be the perfect solution to save what you’ve put into this deal, get closed, and still make a profit.

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.

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.

There now seem to be dozens of hard money lenders trying to force their cash on real estate investors every day. So why aren’t the most experienced investors biting on the offers?

Whether it is email, social media sites like LinkedIn, or online real estate forums like Bigger Pockets hard money guys seem to be everywhere, aggressively offering their cash. More and more are popping up, and are offering higher LTVs, with fewer requirements.

This is great for the overall market, and hard money has been a crucial crutch for investors for several decades. Even though many left, or essentially turned to conventional underwriting practices when wholesalers and rehabbers needed them most, there are good hard money lenders out there, and those that can add value, and be invaluable in the process.

Five reasons veteran real estate investors aren’t buying in:

Unattractive terms

Trouble separating the opportunists looking to skim deals versus real lenders

Investment strategies have changed

Access to cheaper long term money elsewhere

They’ve discovered transactional funding

Choosing the right type of funding for your real estate investment strategy

Wholesaling with the best transactional funding means just getting in out and paid for sure versus being locked into high rates, with high exit costs, high risk, and no guarantees.

On the other end, buy and hold investors are flush with cash, or have access to far cheaper private money form investors looking for long term yields. In markets like Miami, cash buyers accounted for over 40% of transaction in mid-2014, with almost 70% of foreign buyers paying all cash.

For those simply looking to flip instantly for fast cash and wholesale properties in 1-3 days keep Best Transaction Funding bookmarked in your internet browser and ask about our Proof of Funds to facilitate making more offers.

However, hard money still has its place and uses.

When to use hard money lenders

When refinancing to access and release pent up equity

For rehab projects and fixing and flipping houses

To capitalize on attractive investment opportunities when an end buyer is not yet in place

For taking non-performing assets to performing before resale for maximum profits, or securing lower rate long term financing

How hard money lenders can better serve the investment community

By providing faster approvals

Offering streamlined processes with less hassle and hoops

Developing a reputation for actually funding deals

Working relationships for scaling repeat and referral business

Contrary to some optimistic reports mortgage credit is actually becoming harder to get. So how tight will access to loans get and what’s the fallout for real estate investors?

There may have been some loosening in mortgage lending recently, at least in a few niche pockets of the market, but the hard data surprisingly shows the majority of banks and lenders being even more cautious in 2013.

Commercial underwriters might be opening the flood gates and a few major banks say that they are more willing to loan on strong applications with 20% down and 720 plus credit scores. However, more lending institutions responding to a survey in 2013 say that they are less likely to approve home loan applications for those with less than 720 credit scores or 20% down payment than they were before.

But that’s going to change soon right?

Analysts interviewed by Inman News say quite the opposite. They think ‘Chicken Little’ might be quite the optimist in light of what is going on in financial markets today. They see the sky falling in and the earth dropping out from under us at the same time.

Why?

This doom and gloom is in response to Consumer Protection Act and Dodd-Frank rules set to come into play in the new year. Experts say they are “certain” this will mean fewer home buyers will qualify for loans and those that do will have to pay much higher fees. This is on top of interest rates jumping to a two month high at the end of May 2013.

Of course truly knowledgeable and savvy real estate investors and financial experts know that mortgage lending and access to credit will absolutely lighten up. There were plenty of media outlets and industry voices proclaiming the housing market would never turn around but it has, and these same macro cycles will inevitably and invariably lift the mortgage market as well, and even spawn new exotic loan programs.

Of course this may take a couple of years. In the meantime, at least for real estate investors there are plenty of alternative funding sources including transactional lending, hard money loans, private lenders and commercial mortgage companies offering bridge loans and blanket mortgages.

Those flipping houses really have little to worry about on the sales side either, at least for now. Demand is at an all-time high, there is plenty of room for growth and there is virtually endless capital to pay cash for real estate, even if it is mostly off the grid and not evident in regular economic reports.

Still, for those eager to make a killing in real estate, the time to make a big push while the stars are perfectly aligned for flipping houses is now.

A few years ago during the big boom in the housing market it was only the real pros who could get access to transactional funding and you often had to be pretty well connected to be able to take advantage of it. However, you could say that the one great thing that has come out of the recent rise in foreclosures is that transactional funding has actually become much easier to get your hands on.

Some people confuse transactional funding with hard money lenders and private mortgage lenders, however it is actually very different in some ways. No doubt everyone has learnt that hard money lenders have become far more cautious and strict on the loans they make than a couple of years ago. It used to be that providing you had a pulse and there was equity in a property that you could get a loan. Today these hard money lenders are often offering very limited LTVs and even require credit reports and proof of income and assets in many cases. This makes it a lot more like trying to jump through the hoops of a conventional mortgage lender or bank than what hard money was designed to be like.

In contrast transactional funding couldn’t be easier to get. You need to be aware that this is not a form of financing that works for those with buy and hold strategies, but it is perfect for wholesalers and those focused on flipping houses. Transactional funding is specifically for those who already have an end buyer and simply need the funds to close on the A-B transaction first.

What do you need to qualify for transactional funding? Virtually all you really need is your purchase contract and your sales contract with proof that your end buyer has been approved for a loan or has the cash to buy the property. There are no appraisals needed, no income and asset verification or credit checks. It is really that easy and you couldn’t ask for a better way to keep a steady stream of deal flowing.