real estate investor
Finance Your Real Estate Deals with Private Money Lenders
100% financing still exists!
Private money lenders don’t often take a down payment from you and may fund both your purchase and restoration of the property, or more! In many instances , investors have purchased a property for so much less than market value that their lenders have actually funded not only the purchase of the property, all the renovation costs, AND allowed the investor to receive cash at the purchase closing to put towards their ongoing expenses and receive an initial profit up front .
This sounds great, but where do I find these lenders?
Private money lenders can be family members, friends, business partners, professional or personal acquaintances, attorneys, accountants, business owners, or strangers. Individuals that you come into contact with could be a potential private money lender for your real estate deals. Realize that people you see on a daily basis may be open to an investment opportunity if you have a solid plan.
What’s in it for them?
Fixed returns on their money providing larger profits than almost all other investment offerings , secured by real assets at below market value, insured against fire, theft, vandalism, and natural disasters, and the power to do all of this completely tax-free within their retirement accounts if they desire. Need we say more ? Retirement accounts are an wonderful source for private money lending. Individuals who have suffered through the erosion of their retirement accounts in recent years are likely to be enthusiastic when you ask them to be a private money lender.
Where do the funds come from?
There are a variety of sources that private money lenders can tap into in order to take advantage of timely investment opportunities. Individuals with self-directed IRAs can now use those savings to build future wealth through real estate investments. The flexibility of a self-directed IRA has enabled them to have control of their investments and allows them to take new paths to wealth management andrewarding growth within their funds. Finding these people and matching them with your real estate deals is a way you can complete your deal without using any of your own cash and credit.
Mortgage Brokers Role When Buying Investment Properties
As a real estate investorunderstanding what a mortgage broker can do for you only makes sense. A mortgage agent, specialist or consultant are all honestly the same thing. Unless you arepurchasing the property with cash or you are fashioning a deal with the vendor for one hundred percent financing the mortgage process will probably come up .
A mortgage broker usually owns the company or franchise while the above work under the mortgage brokers license. Mortgage agents have access to the same mortgage products as her or his broker.
You are limited by the mortgage products that the bank offers when you visit a traditional bank. If you do not meet the lending qualifications of that particular bank you will have to look elsewhere . What most real estate investors do not recognise is thateach time they visit a another bank, a credit check takes place . The effect is that each time a credit check happens your Beacon or Fico score goes lower. This may affect the rate you could get or stop you from being able to get certified for a mortgage at all.
A mortgage consultant checks your Beacon or FICO score one time and can have access to 40 or more lenders and their products. Traditional banks are limited to only their own products.
A mortgage consultant takes the intimidation out of the mortgage process. They will negotiate aggressively with lenders on your behalf. That is what they do every day. If you’re buying an investment property you should have a mortgage consultant pre-qualify you. It’s a smart idea to know how much you could qualify for if this turns out to be your only financial option.
The entire mortgage process will be simlified by your agent, negotiate the best conceivable products and lowest rates on your behalf. They do the paperwork and provide you with the peace-of-mind that you are acquiring the best outcome possible for your investment properties. All of your questions will be answered from the beginning to the end of the process and you will be given an explanation of the entire process. It is very common to have a mortgage broker show up at your house for a 9:00 p.m. appointment for your convenience (try to get a banker to come to your house). They will provide uttermost flexibleness in financing choices and steer you on mortgage and credit qualifications.
A mortgage broker gets paid from the lender that the mortgage was arranged with called a finders fee. Sometimes there is a brokerage fee which is paid by the borrower, depending on the circumstances. Mortgagespecialist also have access to profit lenders in which case a brokerage fee is added. More frequently than not the lender pays a finders fee to the agent and there is no brokerage fee.
As a property investor working with a mortgage specialist will be a fantastic asset when purchasing investment properties.
Short Sale Investing – Potential and Profits
Short sale investing has become a very lucrative niche for the real estate investor working and prospecting in this weak economy. There are thousands of properties in a state of pre foreclosure, and a small amount of time before foreclosure proceedings begin where a short sale can take place and benefit all involved parties. The bank does not want to be in the real estate business. Financial institutions need to recover the loss and avoid an expensive foreclosure proceeding. The property owner , unable to keep current with the mortgage payments, needs to pay off his debt, dodge the credit hassle of a foreclosure, and keep some of the equity built up in the property . The real estate investor wants to find a decent house at a discounted cost and resell it for a profit. Short sale investing can help all of these diverse interests. For the financial institution , the short sale can allow them to free up money for investment that has been tied up in the mortgage, since financial institutions are required to reserve enough money to cover the loan if a foreclosure occurs . They also save on fees and effort by not having to proceed with the foreclosure process. The owner is anxious to sell rather than having to go through the foreclosure and seeing his credit severely compromised. The short sale can sheild the credit rating, save some of the equity in the house , and allow the homeowner to move on from a bad situation. The real estate investor has an opportunity to purchase a good home at a bargain price and assure himself of excellent profits at resell. Short sale investing is a unique opportunity for all the players to come out of an unhappy situation feeling satisfied. The key to short sale investing is finding the ideal property early, before it is foreclosed on, and making an appropriate offer so that the deal can be closed quickly.