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

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

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

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

IRAs & 401ks

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

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

Partners

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

Traditional Mortgages

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

Transactional Funding

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

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

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

 

 

The data shows that real estate investors still can’t rely on traditional mortgage lenders and banks for their financing. The good news is that there are alternatives.

The latest mortgage lending statistics from Ellie Mae and National Mortgage News show it hasn’t gotten much better for real estate investors over the past year. These are just some of the challenges that demand investors use alternative financing sources for their house flip and wholesale deals.

Time

The time it took to close a purchase loan grew by almost 10 days last year, to nearly 50 days on average. When more sellers and agents don’t want to sign a contract for more than 30 or 45 days, this type of financing just doesn’t cut it.

Credit Scores

If you do use your own credit as a real estate investor, you know that the system is notoriously rigged to penalize you the more you do. Instead of getting extra credit for experience they punish you for having taken out more mortgages. 58% of completed loans still have credit scores of 700 to 799. 71% have credit scores above 700. Taking out one loan on your personal credit can knock you off of that tier and derail your plans to scale.

Loan Costs

Conventional loan costs are still high. Even despite all the technology which is making it easier to obtain and process loans. A lot of it is made up of miscellaneous third party fees and mandatory purchases to get the loan.

No Common Sense

There doesn’t seem to be any more common sense in underwriting mortgage loans. It’s one of the downsides of artificial intelligence and going too big too fast. Just between Google and Facebook lenders should have all the data they need to approve more loans. They can even tell if you made it to work today or called in sick with a hangover.

Completion Rates

Far fewer mortgage loan applications may make it to closing than you think. Last year barely 65% of VA home loans, and 70% of all mortgage loan applications actually made it to closing. Those are not good odds to build a business on, have your income rely on, or to gamble deposits on. If you put down a $2,500 deposit on average, you’re already losing $7,500 to over $10,000 for every 10 properties you put under contract. That has to be deducted from any profits you do make on other deals.

A Better Way To Fund Your Mortgage Deals

Hard money is an alternative. Though still often an expensive one which is far more like dealing with a traditional bank than it used to be. Private lenders can be an option, but can be a huge distraction from just making money on real estate deals.

Transactional funding is different. No credit score requirements, no losing the deal over an appraisal and funding available in hours. Try it out on your next deal.

 

It’s a great time to be wholesaling real estate. Yet, many investors could be doing far more volume, and could be turning deals far faster.

There’s one sticking point where many property wholesalers are getting jammed up. A factor that could lead to more successful house flips, faster turns and much more volume. So, what is it, and how can making one relatively simple adjustment help triple your deal volume and income?

Most wholesalers don’t have a strong stable of cash buyers they can sell multiple deals to each month. If you had just 10 repeat buyers that could pick up 2-10 deals a month from you, you would probably be making more money than you imagined, easier than you ever thought possible.

Unfortunately, most wholesalers are still just trying to build a list and are throwing out ads for their deals in places where very few cash buyers are. As of January, Realtor.com reports just 22% of sales were cash investors. That’s probably even lower now. Yet, wholesalers are blasting endless deals on Craigslist, but insist they will only take “cash or hard money.”

There are some obvious reasons for this. Most often because the property condition may not cut it for conventional mortgage banking underwriting. However, that doesn’t mean there aren’t more ways to finance these deals, or for buyers to come up with cash creatively. Yet, most are just dismissed. If you’ve been running ads like this, and have had to deal with dozens of buyers you’ve turned away because of this, it may be time to rethink your strategy.

With the best transaction funding, you can secure all the deals you can find. It’s just a matter of the exit. Why not help connect all of these potential buyers with capital or creative strategies they can use to buy your properties?

You may not want to gamble on them getting a conventional loan. They may not either. Yet, there are still plenty of options. This includes, paying you for the property with a credit card via PayPal, obtaining personal or business lines of credit, private mortgage lenders, rehab lenders, and small local banks and credit unions.

If you can give potential buyers 5 more ways to buy your deals, and connect them with some of these sources, how much more could you grow your deal flow and income?

Remember, it’s not just about this one deal either. If you aren’t following through on your wholesale contracts with your sellers, word is going to get around. That’s going to make it a lot harder to do deals in the future, rather than easier. Now, if you take a few minutes to provide a list of potential lender contacts to your buyers (which will still effectively be cash deals for you), then they may become steady repeat buyers with you. They can use those funds to come back every month to get deals to flip or renovate and rent out. That’s the beginning of a very strong buyers list. Once they do a few deals with you, they should also have enough cash to pay cash for your future properties too.

 

How does access to credit and various types of real estate financing affect recovery and growth?

Availability to capital and credit has proven to be critical for working through crises, fueling the economy, and growing the housing market. We saw this before and after 2008, when comparing US growth and economic strength to other countries, and we’ll see it again in the next few years. There may be additional challenges given the recent hurricanes and Equifax data hack, as well as the affordability crisis the US housing market has been dealing with. Access to these four types of credit may prove to be instrumental in where we see the best recovery and growth next.

Affordable Housing Loans

Fannie Mae has said it expects to blow through its lending caps this year, primarily thanks to backing more affordable housing loans for multifamily properties. While not all the units in these new and redeveloped buildings will be affordable rentals, and rents are sure to keep going up, we should expect more growth where these loans are being made.

Airbnb Mortgages

With housing costs so high, and short term rentals in so much demand, a lot may demand on where Airbnb landlords can operate and get specialized financing. We are already seeing some lenders begin to tailor programs to buyers of short term rentals, or like in Seattle; down payment assistance programs for those who will list part of their new homes for rent.

Hard Money Rehab Loans

Between the millions of vacant and foreclosure units in the US, and the millions impacted by the recent string of hurricanes, access to asset based rehab lending will be critical and pivotal in which locations are able to rebuild and bounce back.

Transactional Funding

Even with all the above, there is still a significant gap between the supply and demand. Those with best access to the supply may not want to engage in rehabbing or hold long term. Those that do want that may not have front line access to the best deals. This is where real estate wholesalers come in. With continued access to transactional funding they can connect the supply and demand chain, and help both sides in greater volumes, faster.

Keep an eye on the markets where these types of real estate financing are becoming available. They could offer some of the best opportunities, be first to rebound, and provide investors the best growth prospects.

 

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.

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…

 

The perfect home buyer app that lets you record notes and pictures as you tour a property. Review and share your reports with others from your Android, iOS device or computer.

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Access all your property reports from iPhone, iPad or computer

HomeNotes is free for the first 3 properties.

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Subscribe now to HomeNotes and get $1 off the first month with code "BEST"!

 

There is more than one way to fund your real estate deals this year…

It is great to master a system and model for funding and flipping properties. Of course we all know that this business is constantly influx, and that every deal is unique, and can have special quirks. In order to stay consistent in deal flow, income, real estate marketing ROI, and to get the most out of every lead and contact, it pays to have a few different funding strategies and capabilities. That way you can stay agile and keep deals alive when curve balls come, and find a way to get every deal done, even if it isn’t your main MO.

Put these types of funding in your pocket this year, do more deals, and stay on top…

Transactional Funding

Grab this dough for a day and enjoy flash funding your real estate flips with low risk, less hoops, and for big profits. Obtaining transactional funding is ridiculously easy for those looking to wholesale and flip houses in 1-3 days. Check out just how easy it is here.

Hard Money

Some properties just aren’t ready to be flipped in 3 days. Perhaps there are necessary repairs to make, or your buyers may need a little more time to juggle their capital and close. There may even be more profit in taking the property to better performance over 6 to 24 months, and then reselling. This is when hard money can be incredibly powerful. It offer ease of funding, but with longer terms, even on properties other lenders won’t finance.

Working Capital & Lines of Credit

Real estate projects notoriously frequently cost more than expected, or funds get held up for a few days or weeks longer than expected. It is critical for real estate investors to stay liquid in order to pay their bills and team, to keep landing new deals and keep the pipeline full, as well as to consistently push out marketing to attract new leads. PayPal, banks, alternative lenders, and others now provide very easy access to working capital and lines of credit to bridge this gap. The key is putting this in place before you really need it.

Joint Venture Capital

Sometimes alternative cash sources are necessary. It may be a few thousand dollars floated to cover closing costs or minor repairs, or it may be partnering up to gain a larger sum to take down a big opportunity you just can’t pass up. Savvy investors all the way up to Warren Buffett and Berkshire Hathaway embrace this type of deal. It could come friends and family, local private money investors you meet at investor groups, or even from real estate crowdfunding portals. Constantly grow your access and knowledge of these funding sources so you are prepared in advance.

 

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 will you super-charge your real estate business on World Guerrilla Marketing Day?

Monday November 2^nd is World Guerrilla Marketing Day!

This new power productivity day introduced by Direct Marketing Hall of Fame member Seth Godin is the perfect opportunity for real estate entrepreneurs and investors to really kick-start and catapult their businesses and incomes forward.

Guerrilla marketing is ideal for real estate, and especially real estate wholesalers. It’s all about finding ninja style tactics to boost your business. It’s about gaining more results with less money. About resourcefulness, and making things happen. But as Seth and Jay Levinson remind us; it’s also about being generous. Gaining people’s attention isn’t that difficult, it’s what you do with it once you’ve got it that matters. So make this Monday a massive day for reaching new customers, and wowing them!

Not sure where to start? Here are 13 quick guerrilla marketing ideas for real estate investors:

1. Host a Walking Dead viewing party
2. Post a video of you getting your real estate brand logo tattooed on your neck to YouTube
3. Self-publish press releases
4. Unleash a new real estate blog
5. Turn your properties into 3D billboards
6. Arrange a pop-up event to raise visibility for your brand, or need for affordable housing
7. Hold an open house event featuring local artists
8. Create an awards event or list of local individuals that are doing the most to innovate in real estate
9. Pay a struggling homeowner’s mortgage payment for them
10. Use Craigslist (all of the categories)
11. Host a contest with a prize for local entrepreneurs
12. Launch a real estate crowdfunding campaign
13. Circulate this blog with you Twitter handle attached, and benefit from the hashtag activity

Want more ideas? The Guerrilla Global Summit is on in Orlando, FL from November 2^nd to 4^th with many great thought leaders in this creative marketing space, and it’s one of the most affordable events of the year.

Let us know about your World Guerrilla Marketing Day adventures…

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.

If no money down real estate investing still really works in 2013 is it really possible that it could wind up less appealing than strategies?

There is no denying that no money down real estate works today between transactional funding and creative deal structuring, but can it actually end up being less profitable and more expensive than putting money down?

The promise of no down payment real estate deals has drawn thousands of new investors to the housing market year after year for decades, but while it has worked well for some, others have been caught off guard by ‘deals’ that weren’t really deals at all.

So what’s the main issue?

A lot of no down real estate investment education programs and gurus hone in on seller financing as a solution for those with no cash of their own to invest and poor credit.

Owner financed property might be a great idea for first time home buyers, those now purchasing a new residence after foreclosure and even some investors but it does come with its complexities and challenges for serious investors.

Seller financing is commonly offered by slick and amateur investors and desperate homeowners. Often they want above market prices in exchange, or demand terms and fine print that make properties much more expensive; shrinking profit margins and making them difficult to resell.

There can also be problems with transparency and seller ability to commit. Sometimes they aren’t actually able to sell on the terms they agreed to knowingly or not. This requires quality due diligence to ensure seller solvency, become aware of any additional liens and potential clouds on title.

All it takes is getting stuck with one dead weight deal you can’t get rid of to begin bringing down your house of cards.

All this can be avoided by sticking to wholesaling and using private, hard money or transactional funding.

This still offers all the advantages of leveraging other people’s money and the potential for zero down payment deals, but without the complexities, risks or digging into profit margins.

So line up your funding and you’ll be able to get out there and make a lot more offers, do a lot more volume and enjoy more income, bigger payday with less stress.

There is a major market shift coming that could end the majority of real estate investor’s businesses as fast as the last bubble bursting if they aren’t prepared for it...

Regardless of what the banks and government are doing or proposing to stem the flow of foreclosures a seller’s market is on the way and if the wave hasn’t hit your area yet, it could be a tsunami sized slap to your cash flow.

Real estate investors have enjoyed a free ride for the last few years with endless deals at ridiculous discounts to choose from. Many have never experienced a bidding war or know what it is like to be told not to make an offer unless it is full price. However, this is already happening in many areas of the country. There aren’t weeks or even days to think over whether you should put a property under contract, demands for bigger deposits and Proof of Funds are increasing and even trying to get a return call about an available property is going to be pretty difficult. If you business model isn’t structured right you could be in for a big wake up call and a stall in your cash flow.

Real estate investors need to be building better relationships with wholesalers and agents, be improving their negotiation skills, be prepared for tighter spreads as sellers push up their asking prices and focusing on attracting more buyers.

The one big difference between now and the last boom is the lack of availability of financing. There are lots of cash buyers out there to flip to but with sellers becoming tougher o the window to close and hard money a lot harder to get than ever before transactional funding is going to be crucial to your success. Start preparing for the shift now...