This week on the Fund, Fix and Flip Real Estate Investment series, Trainer Trevor Evans teaches How to Invest in Real Estate with No Money.
In this segment Trevor teaches our listeners on the following:
1. What are some strategies to purchase real estate with little or no cash?
2. What does Hard money lenders look for in a good deal?
3. How do you make your deal attractive to a Hard money lender?
Strategies to use other people’s money to fund your real estate investments:
1. Using your credit cards to fund your deals. The more credit you have the better off you are!
2. Hard money Lenders. Hard money lenders look at the asset and not at your credit score.
3. Borrow money from friends and family. You convert them into Hard Money lenders and pay them a good interest rate.
4. Borrow from your Whole Life Insurance policy.
2. Take a loan from your 401K.
3. Take out an Equity line of credit on your personal house.
The commonly used strategy in real estate investing is the use of a Hard Money Lender.
So, if the Hard money lender does not look at your credit, what does he look for?
1. Your expertise. Most Hard money lenders want you to have 3 investments under your name. This does not include your personal residence.
2. The ARV or after repair value. The property must have equity before the deal is made.
3. How did the property come on the market. Eg is it a Foreclosure, short sale or probate.
4. What is your exit strategy? Are you buying to hold or buying to rehab and Flip.
5. How long you need to complete rehab work.
6. How much is the estimated cost of repairs.
Tip of the week:
Confessions of a Hard Money Lender -And Why We Hate Hearing “I Need 100% Financing”
Make no mistake, hard money lenders need borrowers to deploy their capital and get a return on investment for their capital partners. They often enjoy repeat business – real estate investors aren’t typically one-time borrowers, so asset-based lenders like hard money lenders or private money lenders value the business relationships they develop with quality borrowers.
One way to invest in real estate with no money down or little or no cash is to borrow from Hard money lenders who charge high interest for short term loans. When hard money lenders provide a loan, they want to be confident that the borrower is able to repay the loan on time. If the borrower isn’t able to pay back the loan, this creates a great deal of extra work, stress and potential financial loss for the lender. A strong borrower with a significant down payment (or equity in the property) and cash reserves has the best chance of obtaining a hard money loan and succeeding with their real estate project.
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Looking for a Hard Money Lender? Here is an article from Connected Investors on how to get bids on your project.
Connected Investors, the world’s largest real estate investors network and marketplace, today announced the launch of the first centralized real estate investment funding portal, CiX.com. The technology allows real estate investors to quickly and easily submit their deals to a network of asset-based lenders, ensuring the best terms for loans on their investment properties.