How much profit should you be making on your real estate wholesale deals?

Property wholesaler profit margins are one of the most commonly debated topics among new investors, rehabbers, and buy and hold landlords. So, what’s the right amount? How much is too much? How should wholesalers set their markups?

Some wholesalers may not make as much as they could on deals because they are intimidated about losing them. Sometimes end buyers are complaining that wholesalers are asking for way too much, and are just wasting their time. So how do you pick the right number?

4 Ways to Price Your Wholesale House Deals

Fixed Fee or Percentage

One way to choose is to pre-determine what percentage or dollar amount you are going to charge across all of your deals. It could be 3% or 6%, $1,000 or $100,000. Or more. It’s up to you. This can make it easy when screening potential properties to see if they match your criteria. However, one flaw is that this doesn’t always maximize your deal flow and profit potential long term as the market changes.

Profit Left to the Next Buyer

Again, you can choose a fixed dollar amount or percentage spread which you think if fair for you end buyer to make after they buy, fix, and flip or rent the property. Of course, every buyer is different. Some use cash. Some use very expensive hard money loans. Some can get rehab work done cheap. Others pay a lot for contractors and materials. Some can flip a property in a week. Others take over 6 months to complete a flip.

ROI on Your Time

As a real estate wholesaler you are providing a valuable service. However, unless you have a team you are still often trading your time for money. Make sure you are getting a fair return. What’s your time worth? How much time do you spend flipping a deal? If you just quit working a McDonalds for minimum wage, then making $30 an hour may seem like an awesome deal. If you just quit being an attorney or doctor making $500 an hour, then you’ll probably want to make sure you are earning $1,000 an hour as a wholesaler. Remember to factor in all the time prospecting, screening, negotiating, and marketing, and managing the transaction.

Filling Orders

Another way to do this is to simply fill orders. Take pre-orders for deals aka ‘reverse wholesaling’. Then go find a fit, and profit what you can. You may have end buyers who are happy with 20% returns on two flips a year. Others may insist on getting properties 40% below market value, or being able to double their money. Take the order, find the deals, squeeze in however much you can. This is a little more fluid when it comes to predicting your income. However, it can lower risk and waste. One downside is that you are effectively letting someone else set market prices, versus controlling them yourself.

Looking Forward

There are wholesalers who can make $100k per deal, and do 10 deals a month. Others might do 1-4 deals per month and are very happy putting $20k in their pockets. Some might land some whales and make a million on a very juicy deal. A lot of it depends on how good you are at finding and negotiating deals, as well as how you market and present the inventory.

One thing which is really important, and which many wholesalers forget is to keep an eye on the changing market. Prices and profit margins will change. Protect your income and industry but refusing to sell out too cheap, but give good deals if you want more business.

 

What do you think? How much do you charge? How much do you think wholesalers should markup deals? Let us know on Facebook and Twitter…

Is focusing on fewer deals actually the key to making more money in real estate this year?

Real estate investors, agents, and other professionals often rush in and try to ramp up as much volume as they can. They perceive volume as the path to more money, and more freedom. But that’s not always the reality. In fact; it frequently ends up delivering the opposite results.

Even when you look at massive giants like Zillow and Airbnb, they often just post bigger annual losses. That’s not to say volume and market share can’t one day turn into profit. But common sense says to build a model you can scale, not to create a big business and then hope you can make money from it.

Going after volume first can often just mean being busier. It can mean being busy hiring, training, managing, putting out fires, and sometimes for less money. Flipping more houses is great, but the focus should absolutely be on profit.

Ask yourself what’s better; doing one wholesale deal and making $100k this month, or trying to do 10 rehabs for $10k each this month? Which will give you more of what you really want?

Take a look at the deals you’ve done over the last year; which are the most profitable top 20%? What’s different about those deals, and what do they have in common? How can you do more of those and less of the bottom 80%?

Your time is literally priceless. Don’t waste it. Get the most return on your time that you can. When you do that you’ll have the freedom to do more volume with deals that have even better profit margins, but you’ll be able to afford to take time off for the things that are even more important.

Some ways to get a better ROI on your time may include; delegating more and micromanaging less, streamlining your financing strategy, wholesaling versus rehabbing or renting real estate.

Build in more profit by slashing your turn times on deals, negotiating better rates with vendors or paying them more to take on more responsibility, building relationships with good buyers that won’t nickel and dime you on deals, and empowering any team members you have to make decisions faster based on a good system.

Net profit or volume – which is your goal this year?

 

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

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.

Do you hold the master keys to winning at wholesaling houses this year?

2016 is expected to be a tremendous year for US real estate. However, there is no question that competition and property prices have increased too. What’s the secret to getting in the game, or scaling your wholesaling business over the coming months?

Financing

Having the money lined up is critical for being able to act fast in this market. Investors are not going to be able to seize on the best investment opportunities fast enough unless they already have the money lined up. If you are out there making multiple offers a week that means having a lender behind you. Even if you have cash to make a purchase or two; the enhanced ROI and liquidity of hard money loans and transactional funding is going to be critical.

Know Your Market Better

If you take too long to evaluate properties they’ll be gone. Investors will always want to back up their assumptions with comps, but every minute counts. Sensei Gilliland of Black Belt Investors says he has the process of vetting deals down to 20 minutes or less. The better you know your market, local property values, and track every home and sale in process the faster and more accurately you can act. There are deals in even the hottest markets in 2016. It is possible to find sweet deals with fast $70,000 spreads if you know who is buying and selling, and what sales are about to be recorded. As the market climbs this is critical for being able to find inventory, and generate consistent cash flow while others allow themselves to be paralyzed due to a lack of data.

Be a Strong Buyer

Whether bidding on inherited properties, cherry picking from the MLS, or sniping for sale by owners investors must be positioned as strong buyers. This means being armed with a Proof of Funds letter (POF), making strong offers, and knowing how to effectively present yourself and your offer.

Build a Waiting List

The growing pressure from interest rates has thousands of buyers eager to secure properties. Many won’t be ask picky as they used to be. Many see this as their last opportunity to lock in cash flowing rental properties and affordable payments on homes, at least until we come full cycle again. They are not going to be as sensitive to price, or terms, but they want solid properties which can weather any coming fluctuations. Build a list of these buyers. Do it right, and don’t keep them waiting too long and they’ll be loyal. With a good deal on the front end, a strong buyers’ list, and access to transactional funding, investors can scale quickly.

Value & Good Deals

Unless wholesalers pack in the value and offer good deals they aren’t going to hit their full potential or see the repeat business they should. Think about next month, the next 11 months, and the next 11 years, not just the money you can make on one deal today. Don’t sabotage tomorrow.

 

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.

Have a goal to make more money in 2016? Here are five strategies to make that happen…

1. Do More Real Estate Deals

Increase your deal volume and you should increase your income. Realtor.com predicts 2016 will be an even better year for real estate thanks to a surge in buying and selling activity. Know how many more deals you need to complete to hit your annual income goal. If you’ve tapped out your local market, expand the amount of map you are using.

2. Slash Taxes

Savvy real estate investors know that more gross income doesn’t always led to more net income. Taxes can be a significant part of this equation. You should already have a tax plan for the year. Know when you’ll make specific purchases. Know how much you should plan to max out on real estate education and travel, how much you’ll donate to charity and give to nonprofits, if upgrading your personal home can help, and how much you can contribute to your IRA.

3. Increase Per Deal Net Profit

For those not so eager to increase deal volume, at least increase the net earned per deal. Set the goal now, build it into your numbers. This can be done by increasing your cut or margin on wholesale deals by say 10%, or by finding bigger deals that can deliver more cash per deal.

4. Flip Houses Faster

The faster investors turn deals the less they bleed in holding costs and interest charges, and the less risk that is involved. For those that haven’t been wholesaling 2016 is the year to add it to the mix. For current wholesalers this is the year to really tighten up that timeline and presell deals in advance.

5. Make More on Alternative Investments

Make sure your reserves, emergency fund, and alternative investments are working hard for you too. Don’t let them drag down your total returns for the year. Put that capital into private lending, startup investments, tax free college savings, better paying CDs, and IRAs.

Add up all of the above and even with modest improvements in each area investors can substantially boost their net income in 2016.

 

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

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

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

The Advantages of Flipping Houses on the MLS

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

The Pitfalls of Flipping Houses on the MLS

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

Solutions

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

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

 

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

As interest rates start soaring wholesaling real estate likely to become top investment choice.

The Fed’s pending rate hike spree could come far faster and harder than most expect. One analyst has forecast a 1.5% and done raise in December. Others anticipate interest rates up 2% by 2017. They will double before they get back to previous territory in the last housing boom. As more aggressive loan programs are rolled out if shouldn’t be surprising to see many property owners with double digit mortgage rates again, at least within a few years.

Side Effects of a Rising Rate Environment

Wall Street has already been wincing and contracting, just at the thought of a rate hike. Higher rates can be bad for some stocks and may result in more investors pulling their cash out, and putting it into real estate.

This activity, along with higher remodeling and building costs could create faster price growth in the housing market.

Yet, easier access to lending, a raging appetite for real estate as an asset class, and rapidly rising prices, along with higher rates can bring other challenges. Competition and thinner cash flow levels are two of these.

It’s also important to note that many investors have already recently tied up the bulk of their cash in startups, equities, and rental properties. So there will be great opportunities for wholesaling houses, but the cost and sources of money can change some of the dynamics in the market.

Funding Your Real Estate Deals in 2016 and Beyond

Buy and hold investors, and rehabbers that are tight on cash may be able to turn to credit lines and even reverse mortgages. But they must stay alert to the potential for negative cash flow if using high loan to value purchase loans.

End buyers made up of regular home buyers armed with access to more aggressive high LTV loan programs could be among the most active in the market.

This means great opportunities for wholesaling using short term mortgage financing. Many rehabbers and landlords may see wholesaling as their new best strategy to get in, out, and paid without holding onto the debt. Even if rates nudge higher this will be barely noticeable to those using transactional funding and hard money loans to quickly flip properties in a matter of days.

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.

 

Distressed property opportunities are surging in 2015. So where are they, and who’s buying?

While some newbie real estate investors that have gotten into the industry since 2008 have been griping about a lack of deals, the data shows there are even more distressed properties coming up for sale. In fact; according to the stats there are twice as many.

Rocketing REOs

While some appear to have forgotten there was a foreclosure crisis RealtyTrac reports that bank owned properties leapt up 50% year over year to April 2015. There are a lot more distressed properties in the works too. RealtyTrac reports an almost equivalent number of pre-foreclosures and auction properties too. The Mortgage Bankers Association reporting commercial and multifamily delinquency rates reveals that the number of Fannie Mae loans that were 60+ days delinquent almost doubled in Q1 2015 as well. Many of these are properties which aren’t even included in foreclosure figures yet.

California Foreclosures and Fast Growing Markets

It’s no secret that California has been one of the fastest rebounding housing markets in America. In fact, it dominates Realtor.com’s recent list of the hottest US real estate markets; claiming 10 of 20 places. Yet, even in CA where property prices are up, and days on market are shrinking RealtyTrac says bank owned REOs have climbed even higher; by 74%.

Demand is up too. Online listing portal Realtor.com says visitor numbers have doubled in 2015. So more distressed properties are coming down the pipe. But there are plenty of buyers eagerly looking to snap them up. These are perfect conditions for real estate wholesalers that can virtually flip an unlimited number of house deals using transactional funding.

 

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.

Several new regulations are set to hit the mortgage and property industry in the summer of 2015. So what are they, and how will they impact real estate investors and entrepreneurs?

New Mortgage Forms

On August 1^st, 2015 the mortgage industry will get two new forms. The Lending Estimate (LE) will combine and replace the old Truth in Lending and Good Faith Estimate. The HUD 1 Settlement Statement and final TIL will be replaced by the Closing Disclosure (CD). We’ll have to wait and see whether these documents really simplify things for home buyers and benefit them, or just add more confusion. What is perhaps more notable about these new mortgage forms being instituted by the Consumer Financial Protection Bureau (CFPB) is the new 72 hour rule. The CD must be provided to consumers 3 full days before closing. This could throw some real estate wholesalers off. But wholesalers can still use Best Transaction Funding for rapid flips.

New Foreclosures and REO Sales

Ongoing roll outs of financial industry regulations are putting increased pressure on US banks to shed delinquent mortgage loans and REO properties. We’ve already seen a massive surge in foreclosure filings in early 2015. And that trend ought to continue through the summer as lenders expedite the foreclosure process. This will create opportunities for wholesaling among motivated homeowners, at auctions, and from banks. These spikes in deal flow are already being seen from coast to coast; from Orange County, CA to Maryland, to Florida.

New Regulation A+

The SEC’s new Regulation A+ kicks in this summer too. This is the ruling which enables fundraisers to raise funds from non-accredited investors, and file new mini-IPOs with ease. This can help real estate investment firms crowdfund capital to use in conjunction with hard money loans for acquisitions. It is also expected to kick off a series of IPOs which will create wealth and liquidity which many tech entrepreneurs will in turn use to invest in real estate.

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

Where can real estate investors find the best mortgage lenders for their wholesale deals?

There is no shortage of real estate deals out there today. Even for those that aren’t into marketing for deals or dialing for dollars. There are billions in non-performing loans and shadow inventory REOs. Banks have unleashed a new round of foreclosures in the first half of 2015 too. Auction sites are plump with offerings in many markets. Even a couple emails to public listings can turn up motivated sellers. But turning these deals into cash money often requires some form of financing. So where is the best place to find the right funding?

Wholesaling success is all about securing a lender and loan program you can count on.

There are many financing options, but it is crucial to find the right match:

Transactional Funding

Transactional funding can offer the lowest risk, fastest loan closings, and easiest type of financing to get into play. But it does require that investors already have an exit, with a qualified buyer contracted. This is the no-brainer and efficient choice for those that have built buyers lists, or are fast at connecting the dots. It may not work for those buying on spec.

Hard Money Loans

Hard money loans can be great for fast closings. They can be especially beneficial for those without great credit, for financing properties others won’t, and when creative deal structuring is required that conventional lenders would be scared off by.

Blanket Mortgages

Blanket mortgage loans are now available through several hedge fund conduit lenders. These can provide large amounts of funding for those buying distressed properties in bulk, or refinancing existing property portfolios to tap pent up equity. Some investors haven’t liked the terms of these loans or required capital reserves. But they do offer access to large sums for those that do.

Working Capital

Business loans, credit cards, and lines of credit for working capital can even be used to fund cheap foreclosure properties. PayPal’s new working capital program offers established users working capital loans with no credit checks, and flexible repayment terms. This might be great for buying those dirt cheap foreclosures selling under $10,000.

End Loans

While many real estate wholesalers only focus on their acquisition financing, and finding buyer leads, there are big benefits of lining up financing sources for those borrowers. Sending them to a reliable end loan source can make the entire transaction smoother, help you act with confidence, and keep up overall performance.

Finding the Right Match

There are lots of mortgage lenders out there. Not all serve the real estate investor community, but some do. What is really important is finding a reliable lender you can trust, and matching your loan applications to the right lender for each deal.

What to Look for in an Investment Property Mortgage Lender

• Responds quickly
• Takes the time to answer your questions
• Is actually actively funding deals, not just taking applications
• Does what they say they will
• Are quick to alert you to issues when they arise

Make sure the lender is the right fit for your:

• Area
• Property type
• Purpose
• Loan amounts

Create profiles and cheat sheets so that you instantly know where to go for each deal when you land one.

 

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

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

Finding Wholesale Deals

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

Zombie Foreclosures

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

HUD Homes

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

Foreclosure Hot Spots

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

Areas Receiving Deferred Investment

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

Why Should Real Estate Wholesalers Care about End Loans?

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

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

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

How can you consistently make $96k per week wholesaling houses?

How can investors scale to this level of income faster, and without having to work on their wholesaling businesses more than a few hours a week? How can they do it sustainably?

Automating Your Real Estate Wholesaling Business

A new video blog episode from San Diego based Todd Toback reveals his secret to banking $96,000 in a week, from just 4 real estate deals.

Some wholesaler might already be making 10x this amount per month. But no matter what you are now, and where you want to go with your wholesaling business, keeping up this type of deal flow requires doing things differently to the average Joe.

While Todd may certainly have plenty of talent, and experience in wholesaling. The wisdom he is most keen to share is that his greatest success has come when empowering his team to do their best work. “Hire great, get out of their way.”

This is more than simply delegating. And far different than micro-managing.

Empower, trust, and let them go to work. The results might surprise you.

Todd says that his team brought together almost $100k in profit from wholesale deals in a week. Just by letting them do their thing. Do automate. Do create systems. But then get out of the way, and let it work.

4 Tips for Building Your Wholesaling Dream Team

Hire the Best

Those real estate businesses with the best talent will come out on top. Period.

Invest in Building Team Relationships

If you want loyalty, hyper-productivity, and awesome results for your team – invest in the relationship. The real estate industry is booming and good talent has plenty of options. Internal relations are as critical as external ones. Probably more so. These are the people that will generate the most leads for you, and turn those leads into dollars.

Not everyone wants to have regular meetings, or team cheer parties. Especially in this remote working era. However, empowering them to their best work, showing appreciation, being a reliable client-employer that pays promptly and provides consistent work, and enabling them to be a part of something bigger can all go a long way.

Leverage Your Team’s Word of Mouth Power

Bestselling author and revered marketer Seth Godin says most brands and independent professionals completely miss the boat when it comes to word of mouth. He says that referrals don’t happen because the individuals and organizations we hope to share just don’t have the motivation. And that those hoping for referrals aren’t putting enough thought into providing the right motivation and environment to foster more personal referrals.

Word of mouth marketing is some of the best. Yet, too many wholesalers fail to enroll even those closest to them, and those that have the most to benefit – their own teams. They should be sharing, and they should be motivated to make it a success - if they are proud of the work you are empowering them to do, and they are confident in your intentions and ability to serve their referrals well.

Never Let Them Go

Once you have found great talent, never let them go!

Summing it Up…

Refuse to give up. Wholesaling houses isn’t hard. Especially with the current market; inventory availability, appreciation, and best transactional funding. But, it can be lonely. It can be easy to be distracted, when you try to do it alone.

If you want to go fast at the beginning, it’s okay to go alone. But if you want to go far - go together. “Teamwork makes the dream work.”

 

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.

What does the mortgage landscape look like for investment property loans in 2015?

While Bloomberg Business notes that mortgage underwriting is becoming “incrementally easier” in 2015, the feds have opened up the gate to begin raising interest rates. These factors will have some impact on real estate investors as they evolve and grow. But for now the most important question remains “what loans are available for financing investment properties?”

Transactional Funding

Best Transaction Funding continues to fill the gap for property wholesalers. It provides 100% financing for quick flips. Normally without any of the credit, income, or asset demands of other loan types.

Find out how transactional funding works here

Hard Money Loans

Best Transaction Funding will soon be funding hard money loans from 1M+ (minimum) for select, serious, and experienced real estate investors with solid deals.

Hard money loans offer asset based financing for those deals and transactions that don’t fit the transactional or conventional loan model. They provide fast funding, without the hassle of traditional investment property loans from conventional banks and lenders. They can be great for new acquisitions, rehabbing, and refinancing.

Blanket Mortgage Loans

A variety of new blanket mortgage lenders and loan programs have emerged over the last two years. These programs can help investors with bulk property purchases, may act as bridge loans to unlock pent up equity in existing portfolios, and may streamline overall debt financing for buy and hold investors.

Private Money

Private individuals continue to be keen to put their money to work in real estate deals. For now they can offer better terms and easier lending than conventional lenders. The downside can be the extensive amount of work and time required to line up these relationships and financing. There may also be a substantial pivot in this trend as other lenders become more competitive in 2016 and beyond, and as they can obtain high yields from CDs.

Leveraging IRAs

Tapping IRAs and other types of retirement accounts to fund real estate deals has become increasingly promoted among the investment community. Self-directed IRAs do have great advantages. They can even be used in tandem with private money, transactional lending, and hard money. However, investors should recognize that touching the proceeds of these transactions might hamper their tax benefits. Highly active flippers should also consult their tax professionals to see exactly what the tax ramifications are for them.

Conventional Lenders

Traditional banks and mortgage lenders still have a lot of catching up to do. This is particularly true when it comes to LTV, paperwork burden, and speed. More exotic loans are making a comeback, but these lenders are rarely of benefit to most investors in the current market.

Summary

Investment property financing is still plentiful for those that know where to go, and work with the best lenders for their investment strategy. Whether, and how fast main street banks will be to catch up will be to be seen.

Make sure on our email notification list for first to know of new loan programs and features!

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

Where are the best cities and neighborhoods for real estate wholesalers to live in 2015?

A recent thread on popular online real estate forum Bigger Pockets raised the question of why investors choose to live where they do (if they do), and why?

Top Cities, Myths, and the New Economic Landscape

There are a variety of indicators to follow for property wholesalers that are considering relocating. This might include where the cheapest homes in the US are, following the claims that the massive pool of today’s millennial buyers are flocking to dense urban living, or tracking the markets that check all the boxes of what home buyers say they really want in a home today. Then there is the question of whether real estate investors should relocate to destinations that appear to promise more growth. For example; RealtyTrac’s nod to Jacksonville, FL or San Francisco, CA for the largest house flipping profits and spreads. Or to NJ where RealtyTrac reported the highest percentage of foreclosures at the beginning of 2015.

We have lists like this from RIS Media laying out the ‘Best US Markets for Buying Residential Rental Property’, and Forbes’ list of ‘America’s Fastest Growing Cities 2015’. There are also lists of cities for hot jobs, though as we’ve seen with the recent oil price crisis; trenches of the country relying on a single industry can boom and bust fast.

So where should wholesalers live?

What Wholesalers Do & Don’t Need in a New Home

Do real estate wholesalers need to be in the midst of high distress cities and neighborhoods, or in the pockets that are favorite with VC money, and where mortgage lenders prefer lending?

Being in the middle of the action, and where the money is can have its perks. However, technology has also made it possible for real estate wholesalers to operate completely independent of location. If you’ve got internet and a decent cell phone signal you can flip houses from anywhere.

So as tech continues to develop and internet gets faster the best places for property investors to live might be where they do their best work, and enjoy the lifestyle the most.

For some this might mean a city center condo for doing business during the week and then retreating to a rural estate for the weekend. Others might set up in the burbs where the weather is better year round and living costs are lower thanks to cheaper real estate and tax breaks. This could make inspirational cities like NYC, new tax havens like Puerto Rico, and vibrant sunny escapes like South Florida standout.

Where will you move?

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.

What are the easiest, highest ROI ways to generate leads for real estate wholesalers?

Even though wholesalers have BIG goals, sometimes they only have the bandwidth for taking small steps in lead generation. New real estate investors can often find lead generation intimidating when they don’t have the time and cash to launch glitzy marketing campaigns, and are trying to break in to wholesaling while juggling a full time job or two. Even highly successful real estate investors sometimes run into cash crunches. Still, even when you have a sizable budget and plenty of spare time it still makes sense to demand the maximum ROI from everything you do.

Here are seven small, affordable real estate lead generation strategies that everyone can do:

Send Cards

Even if your marketing budget is virtually non-existent you can always find the time to send out a few pieces of mail each week. There are ‘yellow letters’, postcards, jumbo postcards, bi-fold and tri-fold brochures, and more. However, it doesn’t even have to be this complex. Simple thank you, holiday, and personal cards and letters can go a long way too. They don’t even have to be designed as sales pitches, as much as keeping in touch, and staying at the front of mind when people need your services.

Read: Smart Valentine’s Day Marketing for Real Estate Investors

Casual Networking

Wherever you live there is likely many nearby formal networking gatherings every quarter. However, there are also many ways to network directly with consumers and other professionals in a warmer and productive way while enjoying life a little more. This can be as simple as grabbing a round of golf together, hanging out at the yacht club, going for dinner, or hosting a BBQ on the weekends. Surprisingly you may find this is one of the best ways to generate leads.

Cruising Your Farm Area

We’ve all heard of driving through target neighborhoods and knocking on doors, but there are other ways to accomplish this too. In waterfront areas literally cruising in your boat might bring more connections. Or how about getting out of your vehicle and making it easier to spark natural interactions? Walk your dog, run, or dine in your target neighborhood every week.

Email Autoresponders

Email is still almost as close to free real estate marketing as you can get. It’s also one of the most effective for making sure every contact and lead you make eventually turns into a real deal. Whether designed as an email course, saying “Hi” a few times a year, or providing valuable alerts on local home values; everyone has time to pop a handful of emails into a system that will continue marketing for them even while they are sleeping, travelling, or working another job. If you don’t feel like a great writer, hire a freelance writer to craft them for you.

Related: Best Transaction Funding Reviews Trulia’s 2015 Marketing Plan

Show You Are Interested First

John Corcoran of Smart Business Revolution highlights that one of the best ways to build rapport and connect with power contacts is to show you are interested and are invested in what they care about first. This might be sending them referrals, buying something from them first, subscribing to their blog or social feeds, or donating to a cause they are.

Provide Broader and Longer Service

It’s crazy to see how so many wholesalers allow their offers to be shot down because they aren’t helping with the one main factor sellers care about the most, and how contacts are churned and burned, instead of being nurtured and multiplied into boat loads of warm real estate leads. Ironically it doesn’t even have to cost you a dime to do better in this area.

Expand your services, or bundle them to offer more value, and stay at the top of mind forever. Don’t just help motivated sellers get out of their homes. They might have to, but what they want and need is somewhere new to live! On the other side buyers need various services when moving in or fixing and reselling. Show you are invested in their long term success and keep following up. Partner with other professionals and companies that provide moving services, rentals, contractor services, financial planning, mortgage financing. They want the leads and your contacts need their help. In turn you’ll find loyalty, repeat business, and referrals.

Blog

Start or re-start a real estate blog, and blog every day.

Like this? Discover 6 Easy Ways to Spark Lead Generation here…

 

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.

Few real estate investors love taxes, especially wholesalers pulling in large lump sums of cash. So how is it that savvy real estate wholesalers can effectively turn this factor which creates so much fear among others into one of their top performing areas of profit?

The Awesome Tax Benefits of Real Estate

Operating a real estate investment business offers plenty of tax breaks, as does direct investment in real estate. With the help of a good accountant, and smart tax planning wholesalers could well find they are paying a fraction of the income taxes of those making 10% of what they are each year.

Tax Free, Compounded Returns

Self-directed IRAs offer real estate investors tax deferred, and tax free returns. That mean the additional boost and high cash on cash returns of that extra net investment capital year after year. There are few real estate wholesalers that are going to be in anything less than a 25% income tax bracket. Many will be pushing 50%. A self-directed IRA can then deliver the equivalent of a 25% plus bump to net profits and gains.

Accept Real Estate Donations

Some real estate companies have found a way to leverage in-kind donations of property. For those still undervalued, or with properties they can’t afford to move, they could donate them and enjoy sizable tax breaks, while the receiving entity enjoys acquiring real estate at deeply discounted prices.

Catch the Windfall of Tax Rebate Cash

No matter how much money tax filers receive in their rebate checks this year you can bet they’d like more next year. Billions of dollars are going to be floating around in the next few months. That can be blown on frivolous retail items and entertainment, or invested in real estate. Those getting rebates can use that money to buy homes, set up self-directed IRAs, and invest in income properties. That is all business for real estate wholesalers that put themselves in the right position.

Catch the Windfall of Referrals

Consider working with tax preparers and accountants to gain more referrals. From December through April they are looking for strategic referral partners, and are spending a lot on advertising. Help them add value to clients and refer them business, they’ll send you deals and investors with cash.

Authored by Best Transaction Funding

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

Where can you find the investment property financing you need to fund your real estate deals fast?

While consumer mortgage credit can still be tough to find for regular homeowners there are an increasing number of options for investment property financing. Here’s a quick break down of where real estate investors can find the funding they need for their deals…

Transactional Funding for Wholesaling Properties

For those real estate investors needing to close fast, and who are serious about wholesaling properties with the least risk, for the maximum returns, Transactional Funding is absolutely the answer. Best Transaction Funding offers rapid 100% financing that checks all the boxes for wholesalers.

Hard Money Loans

While transactional funding may be the most appealing option for savvy real estate investors today there are scenarios in which slightly longer holds may be justified. Perhaps there are appetizing must-have deals you just can’t pass up on but don’t have an end buyer for yet. Maybe there are substantial profits to be had from taking few months to fix and flip, or bring a property to performing before reselling or refinancing. In this case hard money loans can provide easy qualifying and fast funding. Yes, we do hard money too, just ask.

Bulk Portfolio Financing

Commercial mortgage lenders have opened up the doors for for bulk income property portfolios acquisitions and refinancing. Some provide non-recourse loans, foreign investors financing and even stated income options. Some of these new lenders include B2R Finance, FirstKey Lending, and Rental Home Financing.

Government Backed Loans

Investors acquiring new personal residences might find FHA, VA, and USDA government backed home loans the best way to go for low and no down payment mortgage loans. They can also be great resources for investors to refer their retail buyer clients to. Local governments also offer a broad array of assistance programs, including well into six figures helping buyers with down payments in high cost areas.

Real Estate Crowdfunding

Crowdfunding can be great for filling in the gaps and launching new developments. However, as the space grows increasingly crowded real estate crowdfunders need to be aware that successful fundraising through this medium can require extensive strategy, marketing, time, and budget.

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.

Is beauty in design and long word counts for real estate blog posts really essential for successful property wholesaling blogs?

Despite the hype, the hard data might show that real estate wholesalers should be focusing on a completely different set of criteria…

Now that real estate investors and wholesalers have access to virtually unlimited working capital via BestTransactionFunding.com and hard money loans, all they really need to crank up the volume is the end customers.

Real estate blogging for end buyers, and even renters, motivated sellers, and investors is one of the best ways to reach them and build a high volume business. Unfortunately there are many myths holding investors back from seeing the results they desire in this area. Two of the biggest right now are real estate blog design, and word counts for higher traffic levels and Google rankings.

Designer Blogs vs. Craigslist

How beautiful do real estate wholesaling blogs and websites need to be, in order to be successful?

Craigslist has proven that you don’t have to be beautiful to be successful. However, few investors and real estate websites have found the same level of traffic and traction without investing in some beautification. In fact, many completely fail because their online appearance lets them down.

For real estate website and blog owners that haven’t been seen the results they hoped for yet, check out SkyFive Properties Blog. SkyFive founder Kaya Wittenburg has applied years of working with top international fashion designers like Versace and Armani to real estate. The result; selling over four billion dollars in property.

Those that recognize their online assets could use a bit of a facelift might find this is the optimal moment to move over to stunning responsive HTML5 website and blog design for WordPress. Give your content the chance of being read, by not turning off visitors as soon as they land on your page.

Dueling the Search Engines for Rank, with Word Count

A post on Inman News recently argued that real estate professionals need to be writing 1k+ word posts to get noticed by Google. While slowly showing up in more Google search results 2k+ word ‘in-depth’ posts they haven’t necessarily been delivering better results for real estate bloggers. Often the results are only served up from high level news publications, and are very aged, not new posts.

Bloggers should carefully measure ‘time-on-page’ before making all of their posts this long. They may find no one takes the time to read them. On September 25^th, Google announced another Panda algorithm update, following on from the August 2014 ‘Pigeon Update’, meaning quality is more important than ever. However, bigger certainly isn’t always better for generating online traffic and real leads.

Our results in testing shorter posts is definitely testimony to that. Our piece on the Google pigeon update scored more visitors and Facebook likes than most real estate related bloggers’ long form content.

While industry brands like CT Homes LLC seem to have gone with all long form posts recently, and are apparently doing well with it, best-selling author Seth Godin rarely publishes blog posts over 100 words. Then just look at Pinterest and Twitter which have achieved content marketing fame with 140 characters or simply images.

What Really Matters for Creating a Real Estate Wholesaling Blog that Works…

What really appears to matter most for building real estate blogs that deliver real results is:

• Valuable content
• Interesting content
• Digestible content
• Consistency in publishing regular blogs

Do this and it will grow, and readers will share, come back, and do business with you when they need help.