Did you know the biggest profits come from financing real estate deals?
Want to know where the real money is in real estate investing? It?s in the financing of the real estate deals. ?Read the following article to find out how to make the most profits in financing real estate deals.
Own all the real estate you want without ever going through the front door.
Private money lending can put you on the fast track to real estate wealth. As long as people have staked claim to land, real estate has been a great investment. So it makes sense that the first market investors seek to invest in is real estate.
Considering that land is a finite commodity, in other words the land we have is all that we?re going to get, even when the market is down, real estate investing is still a great bet.
However many people are rather shortsighted when it comes to entering the field and only look to buy parcels of land or become landlords ? that?s too bad because the real money in real estate is not in ownership of land or building ? it?s in the control of the financing that lays beneath it.
If you really think about it there is a reason why banks are not landlords, it?s really too much work. You have to find and qualify tenants; there are day-to-day maintenance issues, personality conflicts and a host of other details that can really suck the enjoyment out of your investment. Furthermore, it may take years before you realize any return on that initial investment.
As a private money lender, you will lend money to other investors and realize an immediate return of 15% or more immediately. These loans can yield a return of 15% or more within six months. I know that may seem too good to be true and in any other field it may be.
However as a short-term lender serving other real estate investors, these deals are structured to be quick and profitable to both you and the investor by saving the time and expense of going through traditional conventional lenders you are rewarded with a swift and attractive return. Private money financers have been supporting the real estate market for years.
By providing the financing for the deals that don?t qualify for conventional financing these private lenders are in the position to inject money into the real estate market and get things moving again while increasing their own net worth. The market opportunities right now has never been better.
Realize a hefty ROI as a Private Rehab Lender
Many investors are wondering if there is any good money left in real estate investing. Of course there is as a private rehab lender!
Due to the recent housing downturn there are an abundance of properties that can be snatched up for less than half of their value. Unfortunately, many banks aren?t lending money and the ones that are lending have strict requirements that automatically disqualify many distressed properties. This is where you as a private rehab lender can realize a very attractive yield on your investment dollar.
Private rehab lenders, also called hard money lenders, lend money to other real estate investors, contractors and flippers to purchase these distressed properties.
Getting started is actually quite easy since you will be lending money to investors and not the civilian retail market you may be able to bypass many of the state regulatory requirements. And bank?s tightfisted lending practices have made finding clients very easy.
There are so many distressed properties available now that investors are able to pick up properties usually at 65% or less of the current retail value, rehab them and still sell at rock bottom prices. I know with the economy still in shambles, it may seem ludicrous to invest in real estate. However nothing was ever gained by hiding in the shadows.
As a private rehab lender I have several things working in my favor no matter the current state of the economy, is, I need not worry about interest rates, unemployment, GDP, the price of gold, etc.
First, private rehab loans are short-term loans that are usually repaid within 6 to 9 months. Second even in a shaky market, I structure the deals to allow plenty of room between what my investor/rehabber has borrowed and what the retail price of the property will be when it?s completed.
Third, if worse comes to worst and I have to take the property back, I have a property at a very low loan to value ratio that I can rehab myself or make a deal with another of my rehabber clients to get done and split the profits.
To be successful as a private rehab lender you may want someone show you the ropes so you can avoid some of the pitfalls and minimize your risk.
Kathy
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