Getting Hard Money Lenders to Fund Your Property Deals
Successful real estate investment? is dependant upon the law of averages. Making more offers increases the likelihood that your offers will be accepted and acquiring more properties under contract increases the odds of getting your deals funded and closed. Private hard money lenders are looking for solid deals. They want to develop relationships with serious investors who take in the fundamentals of the real estate investing game with hard money lenders. Real estate investors receive private hard money loans when they submit loan packages to private hard money lenders on a consistent basis .
Everyone knows who Babe Ruth was, even though we never got to see him play. One of the greatest baseball players ever. Babe was known as the “Sultan of Swat”. His home run record of 60 home runs stood from 1927 to 1961. His 714 home run record stood until 1974. Even in 1999 he was remembered as the third greatest sports figure of all time, behind Mohammed Ali, and Michael Jordan. His most amazing record is still a record. . Babe Ruth still holds the coveted record of the greatest slugger of all time. .
The slugging percentage is a player’s total number of bases reached on hits divided by official times at bat, expressed as a three-digit. In other words, Babe reached the bases on hits more than any other player in the history of the game. The point of this story is to remind us that it isn’t necessary to always hit a home run to be a profitable investor whether in commercial or residential property and whether with private hard money or rehab hard money .
All serious realestate investors should be getting those “hits” using a combination of strategies. Some properties may go under contract and be assigned to another wholesale investor and make you a smaller lump sum of cash. perchance anywhere from $500 to $5000, or more just to assign a contract.
Many investment properties receive funding by a transactional support lender just because you already have a buyer. Some properties may get funded by a traditional private hard money lender and quickly be “flipped” for profit. And some properties may get funded, rehabbed and resold. These types of properties are funded by rehab hard money lenders. Some properties may be taken over on “subject to” contracts with owners, leaving the original financial support in second positiont
Controlling properties is possible using Option Contracts where you control the property for a certain period of time. Some properties may be taken over using an option or lease option . Option contracts where you generate each month cash flow by putting a tenant in the property and collecting a lump sum of cash as “option consideration” and later on when the tenant/buyer finances the property you get a bigger lump sum founded on the selling price .
Some properties may be acquired through owner financing where notes are used in lieu of cash or down payments. Often time, property is purchased by buying tax deeds and tax liens and then earning an first-class percentage return guaranteed by the state and then if not redeemed you wind up getting the property. Some properties may be acquired by putting together simultaneous deals and trading equity between properties.
Some properties may be acquired by using seller financed 2nd mortgage notes that you created when you sell a property. Some properties may be acquired by working with a partner who puts up the down payment money while you find the properties and put the deals and rehab hard money lenders together. Private hard money lenders valuate each element of a loan package that will give it strenghth and reduce risk, whether it be your exit strategy or even adding a partner to the deal. It could be a carpenter, a pipe fitter, an electrician, or evenyour dentist! Good investment property may be acquired using cross-collateralization of other special use properties owned .
Deals can be put together by with partnerships with rehabbers or contractors who will contribute their work while you find the deals and put together the funding.
As you can see. There’s more than one way to “get on base” with real estate. Babe Ruth may have been the “Sultan of Swat”
and he did hit lots of home runs but he also made sure he made lots of hits. His slugging percentage record is a testament to that.
By evaluating each property and it’s equity independently , there is always more than one way to monetize it. It doesn’t seem like much to assign to another buyer of a contract for $500 until you realize that you may only have a couple of hours of your time into the whole deal and it gives you cash flow. And many assignments go for $2500, $5000, $10,000 or more .
Have fun with your real estate investing. Be creative. Put together win-win transactions. You will always make more money taking this
approach. Successful investors in both residential and commercial know the secrets to success in baseball and it worked for him. And along the way, he also made the “home runs”. You can too.
Consider some of your recent properties. Were there additional ways you could make money on them? And are there additional ways you can make money on the deals you have now? We talk about having “pocket buyers”, including home buyers and investors. These “pocket buyers” can also be people with $5000 or $10000 cash down, ready to make an option or deal with seller financing .
Having “pocket buyers” is so of import because it gives you MORE flexibility. And having access to the very great property deals–that is utterly vital. Carry your Loan Packages with you. Be ready to do deals where ever you go! Deals attract money. Build your net worth and control more assets and lenders take a more serious look at your projects. Keep up the good work and keep your attitude high. Getting your residential investing property and commercial investment property funded by a hard money lender can be accomplished if you concentrate on Following the required steps of funding a hard money loan.