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Financing Real Estate

Financing Real Estate

The Interest-Only Loan “Extend and Pretend” Strategy

by Florence Foote | November 10, 2009

One of the worst kinds of sub-prime loans was the infamous “pick-a-pay” (Payment Option ARM) under which borrowers had the choice of how much payment to make each month, with the lowest options being negatively amortized, i.e., reducing the equity in a property every month. These loans took the concept of house-as-piggy-bank to [...]

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Financing Real Estate

Is Fannie Mae Killing the Golden Goose?

by Florence Foote | November 3, 2009
Thumbnail image for Is Fannie Mae Killing the Golden Goose?

One study of mortgages during the Great Depression found that almost half of urban, owner-occupied homes (on which there was a mortgage) were in default by 1934. The government’s answer was to sponsor the creation of Fannie Mae in 1938 (or as it is really called, the Federal National Mortgage Association), which was, and [...]

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Financing Real Estate

How to Get Seller Financing for a Mobile Home Park

by Frank Rolfe | September 15, 2009

One of the great advantages of buying mobile home parks is the ready supply of seller financing. No other form of real estate investment offers as much seller carry, and at as favorable terms — with most of these loans being non-recourse and at below-market interest rates.

So how do you get a seller to finance the mobile home park?

One of the first strategies is to “bond” with the seller. A seller will not offer financing if he is not comfortable with the buyer and their ability to make a success of the park. If they are not feeling good about the buyer, then how can they lock up their investment and their future with them? Clearly, before there can be seller financing, there has to be a period in which the seller gets to know the buyer and develops confidence in their abilities.

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Financing Real Estate

How to Generate Private Money, Steps 5 & 6 of 6

by Ryan Moeller | September 15, 2009

Finding financing is one of the biggest challenges for most real estate investors. I previously wrote How to Generate Private Money, where I broke this process into six steps; here I will break down the 5th and 6th steps (See: Steps 1-2, Steps 3-4) of dealing with private lenders.

Step 5: Handle objections, ask for referrals

Goal: Overcome objections to optimize success and get referrals

Solution: Anticipate objections and have a solution to handle them. You will find that the same 2 or 3 objections come up 75% of the time and you have to be able to handle them. Common objections are: What if the deal flops, how is my investment secured, what is in it for me, why real estate, etc.

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Financing Real Estate

How to Generate Private Money: Steps 3 & 4 of 6

by Ryan Moeller | September 8, 2009

Finding financing is the biggest challenge for most investors. I previously wrote How to Generate Private Money, listing the 6 steps in brief. Over my next few posts I will break down each of these steps in detail; I will cover steps 3 & 4 today.

Step 3: Find a great deal, illustrate a win-win, the deal and the risk

Goal: Inform the potential investor about the deal, the risk and the opportunity

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Financing Real Estate

How to Generate Private Money: Steps 1 & 2 of 6

by Ryan Moeller | September 1, 2009

Finding financing is the biggest challenge for most investors. I previously wrote How to Generate Private Money, listing the 6 steps in brief. Over my next few posts I will break down each of these steps in detail; we’ll start with the 1st and 2nd steps today.

Step 1: Pitch your opportunity to everyone

Goal: Get face to face meetings, get referrals, lots of them!!

Solution: Use an effective elevator speech, get prospects salivating to learn more and get the meeting. Always ask for referrals.

Solution 2: Give out free quality information. Giving out free information via articles, seminars, conference calls, webinars, etc is a great idea as it will build credibility, people will come to you and it makes it much easier to build trust. Set up the meeting and ask for referrals.

Elevator Speech: An elevator speech is simply a 15-30 second speech that tells what you do, what is in it for an investor and gets them salivating to learn more or refer others who might be interested. You want them to ask questions, but do not under any circumstance answer them.

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Financing Real Estate

How to Generate Private Money for Real Estate

by Ryan Moeller | August 18, 2009

Let’s face it, money does not disappear, it changes hands.  So where is it?  There is so much money sitting on the sidelines or in investments making little or negative returns.  Many of these individuals would love to have a double digit return backed by real estate.  

For many investors, financing deals is the challenge.  Here are some steps to get more Private Money then you could ever need.

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Financing Real Estate

Understanding Private Lending – Part 3: How to Find Private Lenders and Get Funded

by Justin Pierce | August 16, 2009

Oh have faith yea disciples of the deal; it is possible to find a lender who will loan every penny of the purchase price of a property. Just like it is possible to find a property that can be bought with no money down, but know that both endeavors can be laborious. Real estate is one of the few business games where the ante is affordable to anyone with a little gusto, and success is possible for those with a lot of diligence and perseverance.

Where to Find Private lenders

  1. Classifieds advertising sites such as Craigslist.com. Look under services and financials.
  2. Do an internet search using any search engine type in “hard money” or “private money loans” etc.
  3. Check your local newspaper classifieds under money to lend or finance.
  4. Go to your Real Estate Investment Groups meetings.
  5. Patrol real estate investment websites like BiggerPockets.com
  6. Network with other real estate investors to see who they use.
  7. If all else fails you can even call mortgage brokers.

Researching Lenders

Search far and wide and you’ll find a couple of good private lenders. There are no certifying bodies for private money and there is no central association. Anyone with a lot of money can essentially lend it out, so sometimes you may run into a lender who is not legitimate.

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Blogs

When A Lender Reneges On A Pre-Approval

by Richard Warren | April 27, 2009

                                          
It has become common for builders and real estate agents to require a pre-qualification or pre-approval from a lender prior to working with them on the purchase of a home. This is done so that the builder or agent doesn’t spend a lot of time with someone who will not be able to get a [...]

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Economy

Latest Real Estate Market Data Showing a Whisper of a Bottom

by Steve Heideman | March 23, 2009

Existing home sales rose 5.1%  in Feburary to a stronger than expected pace of 4.72 million units.  This is the latest in a series of tiny whispers or as Larry Kudlow calls them “mustard seeds”  that we may indeed be in a bottoming process. The other signs include:

Homebuilders are breaking ground on new homes again
First-time jobless [...]

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Financing Real Estate

Should you Pre-Pay your Mortgage?

by Steve Heideman | February 9, 2009

To pre-pay or not to pre-pay that is the question!
Whether ’tis nobler in the mind…okay, I am not a huge Shakespeare guru, but I do fancy myself a mortgage finance guru.
Today I want to talk about whether it is a good idea to prepay your mortgage or not. I will be using some information from [...]

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Economy

Are we Moving Further and Further from those 4.5% Mortgage Rates we’ve Been Hearing About?

by Steve Heideman | February 2, 2009

Consumer confidence reached an all-time low and 100,000 Americans were issued layoff notices last week, each playing a role in the mortgage market’s relative worsening.
For the third consecutive week, mortgage rates rose and average loan fees increased, too.
Amid all of the negative economic news, however, there were two bright spots worth identifying and discussing. They [...]

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Economy

Outsized Economic Stimulus Packages can Cause Long Term Harm to Mortgage Rates

by Steve Heideman | January 20, 2009

After a strong start Monday and Tuesday, mortgage markets suffered alongside stock markets in the latter half of last week, leaving mortgage rates higher on the week overall.  Market losses were especially steep Friday and mortgage rates headed into the long weekend on a strong uptick.  Regardless, the reasons that mortgage rates rose last week [...]

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Economy

How are Mortgage Markets Responding to the Largest Job Loss since 1945?

by Steve Heideman | January 12, 2009

In 2009’s first full week of trading, mortgage bond markets traded back-and-forth, eventually closing the week improved overall.
Weekly mortgage rates fell for the first time since mid-December.

The most anticipated news of last week was Friday’s jobs report. According to government’s press release, the economy shed another 524,000 jobs in December, raising 2008’s total job losses [...]

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Financing Real Estate

For Real Estate Investors, Finding Good Loans Is Tougher Than Finding Good Deals

by Steve Heideman | December 29, 2008

With home prices falling across most parts of the country, investors in real estate are finding good value in certain rental properties. Unfortunately, they’re also finding it harder to get approved for a home loan.
After getting stung by defaults, conforming mortgage standards for non-owner occupied home loans tightened dramatically last quarter.
One major change was the [...]

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