LOANS FOR REAL ESTATE INVESTING, STRIKE GOLD WITH OPM OTHER PEOPLES MONEY
The best way to fund your deals is with loans for real estate investing. Never use your own money. Let other people's money,OPM work for you. Hard money funding, REITs, & Private financing all bring home the gold. Or better yet,
become the money person
in your area. At the next meeting, tell the real estate investors,"I want to give you all the money you need for your deals."
Can you Proof UP? It just means can you show proof of funds or where your money is coming from? Be Ready for business. Dramatically increase your buying power when you get your money set up first. You'll be prepared to negotiate like a pro and make offers that won't be turned down.
Before you find the property it is important to establish relationships & contacts with a variety of funding sources.
MANY LOANS FOR REAL ESTATE INVESTING FOCUS ON 2 MAIN FACTORS:
creditability of the investor and their company or the loan to value ratio on the real estate. Understanding each lenders guidelines, and by adding some of your own, you'll be well armed with a strategic plan to get loans for real estate investing.
Hard money funding Is one of the easiest loans for real estate investing. It is quick- 3-7 days to close. The property must qualify- NOT the investor or their company. The loan to Value Ratio (LTV) must be between 50-65% depending on the condition of the property & the location.
This is
zero down real estate investing
at its best, especially when there is enough of a spread so that you get a check at closing when the property is purchased. Buying low enough to include all the rehab or other costs. Remember, they say, "you make your money when you buy."
Transactional funding is a specialized type of loan for real estate investing it is also referred to as bridge financing. It's quick, easy, and reliable. Cost is a straight fee and around 2-5 points upfront. Best used for short term (24-48 hour) financing for flipping properties and
back to back simultanious closings.
Angel One Investors
fill the gaps with their type of loans for real estate investing-they finance deals that no one will touch but they require a
sound business plan
to support the loan, documentation, and a lengthy review period. It is worth the trouble because once you are accepted by the Angel investor, your next loan for real estate investing will get the green go light quickly.
Loans for real estate investing can be made with funds from an
IRA
plus, the funds can be from your IRA or someone else's account. Just think of it as another way of using other peoples money. Utilizing the funds from a self directed IRA is a clever way to gain tax advantages while growing the money. And it also offers an extra layer of asset protection.
Using other people's money can be as simple as asking for owner financing -seller-carry hybrid deal or it can be a high finance loan for real estate investing with
REIT syndication (Real Estate Investment Trust) both ways it is reliable money at a moderate rate.
A Syndication which creates REITs- is a pool of capital for purchasing real estate properties. Best for large scale projects,
apartments
and
bulk REOs
foreclosures and bank owned properties.
LLC or LLP are the most popular for the sponsor managementdue to the legal & tax benefits. REITs are also governed over by the SEC with strict rules & regulations. However, once established, this is one of the most flexible funding source for real estate investments.
Corporate, Multi- Partners, and Joint Ventures are popular sources for loans for real estate investing because they reduce the amount of risk by distributing it through out the groupand usually, no payments on the loan are due until the end of the project. Plus rates are low.
It is best to use safe investing strategies so that you never use your own money for real estate investing. Look at it like this - if you were to use only your money then you are limiting yourself and your scope of investing by the amount of funds that you have available. But if you use other peoples money (OPM) your amount of available funds are unlimited.
OPM, other people's money- Don't enter into a real estate deal without it. Educated investors know how to leverage other people's money (OPM) to access their own private Fort Knoxx. All these different types of loans for real estate investing give you the ability to find gold for all your real estate financing needs so you will never invest using your own money again.
