Hard Money Loans

When it comes to financing a home, the options are surprisingly large. In this article, we take a look at whether you should consider going with seller financing.

Seller financing is one of the more unique methods for financing a home purchase. As the name suggests, the seller of the home offers to give you a loan to make the purchase on the home. The loan is usually represented as part of the purchase price. If the seller offers to finance thirty percent of the purchase price, you need only get a 70 percent loan from a traditional lender. The seller’s loan is usually recorded as secondary to the primary lender loan.

Seller financing may sound like a slam dunk option to take advantage of, but is it? The answer depends on whether certain factors are present. Let’s take a closer look.

A seller offering financing may be a sign of a problem with the home. Almost all homes have small problems, but those with big, expensive problems should be avoided like the plague. A seller offering a lot of financing on good terms may be indicative of a big problem with the home since most lenders will refuse to provide financing on such a home. Make sure you get a thorough home inspection before biting on such an offer.

Seller financing often comes with a hidden cost that you is right in front of your face, but you might not realize it. The cost is in the increased sales price of the home. The seller may have over-improved the home and can’t sell it at fair market value. They will try to hide this fact by offering financing. More than a few buyers will consider this a good deal and forget to evaluate whether the overall price of the home is reasonable. read more…

The verdict on the press is unanimous: We are currently experiencing a scary subprime mortgage market meltdown and it will affect everyone from Wall Street to Your Street. Certainly, the subject has gotten sufficient (ok, maybe a little excessive) coverage. However, I wanted to look at it from a different perspective. More specifically, how is this current crisis affecting (or going to affect) the real estate investment market. Are the subjects even related enough to be discussed on the same post?

I believe that the subprime mortgage crisis will affect real estate investment in two major ways (one more obvious than the other):

1. Put quite simply, there will be fewer buyers available to purchase the fixed-up homes. With some of the biggest players in subprime lending going under, many buyers with spotty credit and not much money to put down will find themselves unable to purchase a home. Home flippers have counted quite religiously on offering $0 down deals to prospective buyers to entice them into purchasing their investment homes. They’ll still be able to do that but to a much lesser degree as they will be limited to buyers will good credit. On the other side of the coin, whenever a buyer is found, chances of the deal falling through will be lesser as well. read more…

Aren’t you always curious about what these late night real estate gurus are talking about when they mention “Zero Down” investments properties? Haven’t you wondered about how the heck you can buy investments with no credit? If so, read on.

We’re going to dive into a topic that’s very dear to my heart, the art of taking over payments. It’s the absolute best way to purchase homes, and it’s what has allowed me to amass a very large number of properties.

The official name for this method of acquiring homes is called “subject-to”. That’s because you buy the property subject to the existing financing the seller already qualified for. Many investors struggle trying to get sellers to go along with this. But once you get the first one under your belt, your comfort level increases dramatically, and the next ones come with ease. When you buy a home like this, you are responsible for the payments on the loan. The seller will deed the property over to you, so you’ll officially own the home,but the mortgage will stay in the seller’s name.

It’s important that you explain to the seller that the loan will remain intact until you find a buyer. You should NEVER give a time limit on how long the loan will stay with the seller. For example, some investors who are so hungry to find a deal will tell the seller that he promises to find a buyer to pay off the loan within a few years. read more…

When I am looking for real estate what makes my mouth water. Huge cathedral ceilings? Updated kitchens? Recessed lighting? Nope. I love big lots. The bigger the lot the more I get excited. Why do I love big lots.

Over time large lots tend to appreciate faster. In real estate one of the cardinal rules is that generally land increases in value and general structures decrease in value. Why does a structure tend to decrease in value? As a structure gets older it tends to get farther away from safety codes. But generally properties tend to increase in value because the rate at which the land appreciates outpaces the rate at which the structure is decreasing in value. When you are hoping to sell your property for more in a few years its best to look at the dirt and not the house.

Because land tends to appreciate I usually prefer properties that have more of the current value in the land than in the structure. This means that a property in a new subdivision where the structure account for 70% of the value and the land is 10% of the value is not appealing. For instance properties close to a city center can have 65 to 70 percent of the value is in the land. Of course what is even more appealing is a centrally located 5 acre lot with say a 500 square foot house.

Lets run the numbers on a few scenarios to see what I am talking about. Lets assume that land appreciates at 7 percent a year and structures depreciate at 2 percent a year.

First let us look at a property where 70% of the value is in the structure.

Year Structure Value Land Value Total Value
0 70 30 100 read more…

Do you have ‘financial breathing room’. Most don’t, I know I didn’t but here’s how I changed my mindset from working and ‘getting by’ to doing business and ‘getting ahead’.

Like most people you may be used to working a regular job at a pretty much fixed level of earning. I did for 15 years. But by understanding that there are opportunities to make fantastic money in real estate without having to BUY properties is an amazing revelation to most, it was to me.

I specifically learned (and am continuing to sharpen my skills) to ‘assign ‘ real estate contracts.

Assignment is basically finding properties below market value, locking in a purchase agreement with the seller, and then selling the contract to another investor. You will simply collect a finder’s fee for ‘sourcing and locking in the sales price’. My commissions over 2 years ranged anywhere from $750 – $13,600 depending on how the deal was structured.

Knowing that you can get started learning the required skills to execute assignment real estate transactions, while continuing your full time job, is a great advantage for many. Believe me after I received my first check (about $5,000) for assigning my first contract, my eyes opened to the possibility of being wealthy. I was finally enlightened to the concept of ‘doing business’ rather than ‘just working’. What a feeling!

What do you need to get started making offers on properties and then assigning the contracts ASAP?

You need a good training method that teaches you STEP BY STEP to do these 3 things : read more…

Real estate investing is all about perception. Your perception of where the market is going, in conjunction with where it’s actually going. The aim, as always is to buy low and sell high.

You want to buy a cheap tract of dirt and sell it as a high priced piece of developed real estate, after it’s appreciated enough to turn a tidy profit. Selling the property is an art in and of itself.

Buying an initial tract of dirt lends itself to some solid, rational guidelines:

First, look at trend lines for housing prices in your area. While most housing markets are in decline (and the housing markets in Florida and California are adjusting from more than a decade of over-valuation), there are markets where the housing prices are going up. This is a decent leading indicator that there’s a market for expansion.

Second, look for job related news. Home purchases require a steady source of income. New employers moving into a city, or a government branch office opening up are a strong indicator that good, well paying jobs are likely to come up. Where well paying jobs roost, home purchases follow.

Related to this, talk to your local city planning office. Are there recent purchases of “right of ways” to lay down sewer lines? Is the local telephone cable making plans to run out fiber optic lines – a “must have” trend in new home construction. These things point to areas where home growth is immanent. Other big tip offs are school bond issues (found in your local news paper) and new parks being opened up.

Before you look at the land, check out the adjacent commercial real estate usage. Look for “family friendly” or “residential friendly” commercial properties: Houses that are close to grocery and clothes shopping tend to fetch a higher price than ones that are farther away. If there’s a movie theater nearby, or plans for an elementary or middle school, factor that into the size of the homes you build, and what their amenities will be; buyers looking for those features are looking for “mover upper” homes – with a bit more floor space, and two (or three) bedrooms for the kids. Other spots to look for are anchor stores, like Wal-Mart and Best Buy. These companies spend millions on surveys of purchasing patterns before buying a store location; if they’re buying a plot of land, you’ve got about a year to a year and a half window to look into nearby real estate for single family residential and rental residential properties.

You can even flip this on its side – if you can talk to a group of commercial real estate investors, building a shopping center as the nucleus for home development is also a viable combined strategy. This also applies to highly urban areas. Many downtown areas that have been abandoned by businesses can be converted to apartment buildings, and some of the older housing projects are being torn down for mixed-use spaces with combined commercial and residential areas. In particular, you can often get block grants to help with the financing on projects like this, and there are programs from HUD that can help out a great deal with “urban renovations”. read more…

With globalization and liberalization at their zenith, the world is witnessing a rapid transformation towards a global village. The trend of ‘think global, act local’ (glocal) is also catching up pretty fast, whereby, the big and small business houses are increasingly looking to expand to offshore locations. The bringing together of all the nations closer has an interesting fallout. Now, no country seems far off in terms of investment or tourism purposes. With the prices of services crashing due to increased global competition in almost every country, investing in property abroad has suddenly assumed much more importance in the portfolio of the small time property investor.

Why Invest in Property Abroad?

The past decade has witnessed a paradigm shift in terms of the way people view the investment opportunities abroad. The opening up of international markets has a major role to play in this surge of demand for the overseas property market. Businesses are on an expansion spree, and the developing economies are welcoming the financial conglomerates with open arms. Globalisation has also led to a major increase in the spending capacities of the average man in the street, which in turn, means lots of disposable income and limited local resources to invest in. Resultantly, there is a clamor for investment in property abroad.

The reasons for investing in property abroad vary from individual to individual. But the bottom line is that everyone prefers real estate property investment overseas due to it being a relatively safer option to channelise the surplus funds nowadays. Most developing countries are witnessing a property boom and judging by the long-term policies of governments and the predictions by financial experts, the real estate sector is one of the safest bets to invest your money in.

Here are some of the factors that contribute to the surging demand of property for overseas investment.

The availability of credit options has opened up a world of opportunities for the overseas investors. The financial institutions have been offering attractive products to lend the required finance for investors, since the property mortgage is mostly dealt as a secured loan and much safer bet for the defaulters-wary banks and financial institutions.

The lure of an improved retired life in a country that offers much better standards of living is too good to resist. Finance is not much of a problem for this segment of investors. read more…

A successful dealer or a real estate investor solves other people’s problems; this is how a real estate investor becomes successful. The more experience and knowledge you have the better solutions you can provide. It is always good to have large number of contacts and resources; it helps you to get better deals in real estate market. Today there are lot of competition and one need to understand marketing. This means that you need to understand in which area you will specialize in. You can choose from wide range of options like vacations, apartments – residential duplex, triples and single family homes, commercial properties such as restaurants, motels, hotels, stores, malls, office complexes, parking lots, storage units, hospitals, schools and theatres. Taking up farms and industries is equally good now days; you can even choose factories and manufacturing plants.

Here are some ways where you can actually get great deals. Always look at local newspapers, small independent publications and bulletin boards. Try to get the first copies from the press. You also need to look at the legal section of the papers. Try contacting heirs and attorney’s. Look for garage sales, because about 20 percent of the people who have garage sales will soon move. Remember your success increases when you look at properties in large area of population. Check for vacant houses which are run down, abandoned and damaged by fire. You may talk to the neighbors and gather some information who owned the property. Do watch out for foreclosure auctions and tax sales. read more…

Purchasing a home that needs to be fixed up can be a great investment if you know how to find the ideal house that needs work. This takes not only research, but knowledge on which type of home is the best choice to fix up. There are usually two home options that can be fixer uppers candidates.

First, you have the home that only needs minor repairs, such as painting, new fixtures, and overall cosmetic changes. Then there are major project fixer uppers, which means you might have to deal with house structural issues by replacing the roof, major plumbing needs, or general repairs that are likely to be more costly. Minor fixer uppers will cost considerably less, therefore affording you greater room for profit than the major fixer upper. Although they can still be a good investment, major fixer uppers will likely result in less of a profit, depending on how inexpensive is the price of the house.

When you find the house you want to fix up, determine exactly what you plan to do with it. For example, you may prefer to keep it to rent for a monthly income, or you may decide that you are going to “flip it,” which means reselling it immediately after all the renovation. Each has its benefits. Flipping gives you an immediate return on your investment, while renting will provide you a profit over a longer period of time.

Before you choose either option, weigh the following considerations. You first should check the property market value. By digging out this information before you buy, you can determine how much you stand to make after the fix up and resale. You also should verify all the costs involved in renovating the home. This includes every little improvement you plan to make on it. read more…

There has been a lot written about winning property investment strategies. After many years of investing I’m convinced that there are only two strategies that a property investor should employ.

These strategies are basic, but fundamental to your investment selection.

When evaluating any investment property you should ensure that it clearly meets one or the other criteria. In doing this you will ensure that you have a clear focus and investment rationale.

My winning strategies

The two winning strategies relate to the types of property you are investing in and the relationship between capital growth and income.

We are all aware that you derive a return form property investment in two ways.

Firstly, through capital appreciation and secondly from rental income.

Property investment is practically unique amongst investment products in that it is part funded by borrowing; in other words you employ loan capital to effect your investment. Traditionally property investors have utilised rental income generated from rent to repay their debt leaving them with an income and a property asset at the end of the loan.

My two winning strategies are derived from successfully focusing on the source of your potential returns: capital growth or through the maximisation of income & in order to repay your debt.

The danger is that you try and do both and in so doing lose your investment focus thereby failing to maximise your potential returns on either count. Therefore, when considering your investment you should first ask yourself; do I want to invest in either a: read more…