Finding Money For Real Estate Deals

Author: Michael Moreno

Real estate investing can be a surefire road to financial freedom -unless you lack the capital to do deals! This one item -albeit a major one, holds back investors from achieving their dreams more than any other. Most people think that lots of cash on hand is required in order to do deals, but this is simply not the case. There are many other sources of cash for real estate deals available -even in this down market.

One source of funding is called Hard Money. This funding is usually provided by private individuals who will fund the purchase and rehab of investment property. Loan terms are usually 6-12 months. These lenders will charge anywhere from 3-8 points and 10-18% interest for making the loan. (Hence the term “Hard” Money) Care must be taken when using this type of funding, as the property must be rehabbed and sold within a relatively short period of time. The lender is not required to provide extensions, and may simply foreclose on the house at the end of the term.

Wholesaling real estate is a technique where the investor places a house under contract with the seller, and then “sells” the contract to an end-buyer. The investor has none of his own cash in the deal. This technique can be repeated over and over in order to raise cash to purchase real estate to rehab or hold for rental.

Another source is to utilize a home equity line of credit from a bank. These interest rates tend to be lower, and there is no specific end date on the loan term.

Converting an IRA into a self-directed IRA would allow one to borrow money from their IRA to use in real estate transactions. The benefits of this technique include the ability to defer taxes on capital gains, and the possibility of earning far more return on your retirement money than in the stock market.

Borrowing from friends, family, and private individuals is another way to raise the cash for your deals. Most people would be thrilled to earn 8-10% return on their money. If you have experience and can show them some positive results, they would be happy to lend. This technique is similar to using hard money, but there are typically no points paid and the interest rate is usually lower. There are plenty of courses and boot camps out there teaching investors how to raise private money. Because of the difficulty in obtaining bank financing nowadays, this technique is very important.

Seller financing for your deals is a terrific way to get in with no money down. A desperate seller might be willing to finance 100% of a purchase or even delay monthly payments until the deal is rehabbed and sold. Be creative in how you structure your deals with seller financing!

Websites like Prosper.com and other peer-to-peer lending sites can also be great sources of money for deals. Many people are interested in real estate but do not have the knowledge (or courage) to attempt to do a deal. Sell yourself and your real estate prowess on these sites, and people will be interested in lending on your deal.

These are just a few of the possible sources of money for your deals. Real estate investing is all about creativity. Don’t give up just because you do not have the cash!

Michael Moreno
www.cashflowdealmakers.com
mmoreno@cashflowdealmakers

WHAT ARE YOU AFRAID OF?

Author: Annetta Powell

I admit, with all the negative coverage on the state of real estate investing today, it is easy to fall in line with others, thinking that the market is just too risky right now. However, we take risks everyday; most of which we do not even realize. Think about it, when we get in our vehicles each morning and maneuver along the city streets on our way to work, we are taking a risk. Each time we hurry to the airport, settle in and buckle our seatbelts, anticipating our long awaited and well deserved family vacation we are taking a risk. The bottom line is we place our safety, well being and even our futures in the hands of others every day. It is time to take control of your future, cash in on foreclosures and get on the path to financial freedom today.
There are a few reasons people do not invest in real estate; the greatest is fear. There is an acronym for fear that I love: False Evidence Appearing Real. Fear of the unknown, fear of failure and even fear of success can stand in the way of the life you always dreamed of. The only solution to fear is facing it head on. When I first told my family my plans of retiring from corporate America to become an entrepreneur, they thought I was crazy. We have all been taught to obtain the American dream, we have to get a college education and work for thirty years. I realized at a young age, I was never going to become a millionaire working for someone else, so I faced my fear of the unknown, took a leap of faith and trusted that my future situation would certainly be an improvement from my current situation.
At the same time, there are those who are afraid of failure. I surrounded myself with others who also craved success, building a dream team of professionals. I immersed myself in research and have dispelled the current myths about real estate investing. There is a plethora of information available to anyone who is serious about changing the course of their life forever. Do not buy into negativity, horror stories, and the many “what ifs” regarding real estate investing. Sure, I made costly mistakes, but with time, I perfected the techniques of finding, fixing and flipping properties for profit. Now as an expert, I am training others the art of my craft.
Finally, there is the fear of success. For those of you suffering from this, all I can say is take a look around. If real estate investing was such a risky venture, why are investors from as far as Hong Kong coming to the United States in droves buying homes at wholesale prices? Take note of the constant corporate downsizing, there placement of human labor with robotics, the rising cost of fuel and cost of living. We cannot wait for the economy to improve or gas and food prices to decrease, we must make more money. I have sold over 500 properties totaling over $50 million in real estate sales. If you are interested in learning how to effectively make money in real estate using proven strategies, I suggest you go to my blog at http://www.annettapowellblog.com
Annetta Powell
Queen of Real Estate