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Brokers Make More Commissions by Learning the Wrap!

admin — Sat, 13 Mar 2010 21:46:35 +0000

By: Attorney William

As a real estate agent, you can increase your commissions by learning how to structure wraparound transactions. You will undoubtedly come across dozens of listed properties with high loan balances and little chance of selling by conventional means. Your knowledge of wraparounds will be your ticket to increased commissions in a competitive market.

Once you understand the transaction and have all the pieces of the puzzle in place, you will have more deals than you can handle.

Follow this formula:

1. Learn the Business. Learn and understand wraparounds well so that you can explain the process to even the most unsophisticated person. Essentially, a wraparound is done by selling a property on an installment basis using a land contract or contract-for-deed. The buyer makes payments of principal and interest on the purchase price. The seller collects these payments and makes payments on his underlying loan. The seller holds title as security until the balance is paid, at which time a deed is delivered to the buyer. A neutral, third party (such as an escrow company) is often used to hold the deed in escrow and service the payments.

2. Line Up the Players. Find a good attorney, escrow company, insurance agent and mortgage broker. Discuss these issues and make certain they understand the business of wraps. If agents prepare contracts in your state, have an attorney prepare a “standard” addendum that can be added to the Real Estate Commission-approved contract.

3. Find the Investors. Having the “wrap” tool in your arsenal is effective, but it works best when you make it happen. Locate “investors” who are willing to “buy, finance and wrap.” This involves an investor buying properties a little below market price, financing with a low interest-rate loan then reselling on a wraparound at a higher price and higher interest rate. Show them the benefits of the wrap and the incredible monthly cash flow that is possible (do not forget to disclose the risks!). Introduce them to mortgage brokers and bankers who can pre-qualify them for financing.

4. Find the Owner Finance Buyers. Advertise in the paper “No Credit Required,” “Owner Carry Homes,” and similar teasers. Make a list of buyers with a chunk of cash who are not able to qualify for conventional financing (we call them “no-credit” buyers). Show them houses that are listed for sale. Have them pick out a few they like.

5. Contact the Investor. Once the investor has financing and a buyer lined up, he can make offers (through you) on the list of properties that the no-credit buyer picked out. When one is accepted, he (the investor) signs a contract to sell the property on a land contract to the no-credit buyer, contingent upon the investor closing on the property himself. Once everything is lined up, the property can be purchased and re-sold almost simultaneously. The agent gets a sales commission on the purchase of the property.

All you need as an agent are a dozen or so clients who regularly engage in wrap transactions in this fashion. Rather than chase down new clients, you can have “repeat” business. Every agent knows how to do things the “conventional” way. Set yourself apart, create a niche and before long your reputation will precede you.

Click Here for more info for Brokers – Make More Commissions by Learning the Wrap

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

How To Win At The Foreclosure Game

admin — Sat, 13 Mar 2010 21:33:43 +0000

By: P. Mike Larson

     The foreclosure market has changed considerably since I first started investing and flipping properties. I started out in the early 80’s. At that time there was probably only 2-3 foreclosure sources and they were only vague generalities. Today foreclosure publications and sites number well into the thousands. Practical, down to earth, real life experiences were very rare and mostly non-existent. I had to learn everything by trial and error and making a lot of mistakes. Back then buying foreclosures was an inside game for bankers and their friends. There were roadblocks at every turn. Fortunately persistence paid off and allowed me to buy my first foreclosure and here is the technique I used, which is still very relevant today.

     First thing was to make arrangements for capital. (This was the avenue I chose, if you have problem credit and/or little money, there are many strategies you can use to accomplish the very same thing, so don’t worry). My plan was to set up a business account capitalized with enough money to pay cash for a house. I did not want the loan process to take 30-60 days as was customary. I wanted to act fast when an opportunity presented itself. The bank I chose was pro business. When I outlined my plans to buy foreclosures for cash, rehab if needed, then resell them; the banker said he had no models for this kind of business and therefore wouldn’t be able to honor my request. After a little more persuasion on my part, he agreed to look at my deals on a case by case basis.

     When I left, I thought all I needed to do was bring him a fat deal (lots of equity) and one that his bank had a stake in. After searching at the courthouse, I found what I thought was the perfect candidate. I drove by the house. Nice neighborhood, two family, needed cosmetics, but best of all, this house was worth in my opinion approximately $100 thousand(were in the early 80’s don’t forget). The owner owed only $55 thousand and the bank was ready to take possession in two months.

     I scribbled out a simple note and put it in the owner’s mailbox. The next day the owner called and we talked for a few minutes and set up a meeting. I met with him and viewed the house. Condition was very good, only minor interior cosmetics and the exterior just needed some paint. We agreed on the price of $55 thousand and I arranged for him to rent the second floor while I did the needed work on the house. He was eager to get this debt of his back and still live in the house.

     I approached the bank with my offer. The banker was stunned. He couldn’t believe I was back in only a few days! Not only had I found one of his problem loans but he could readily see this was a great deal for him, for me and for the homeowner. The owner would be able to salvage his credit as the foreclosure would not appear in his file as he had satisfied the loan. This was a winning situation for all parties. The banker then said “let’s do it and we can close in 15 days”. We set up a ninety day note with no payments and the note was renewable for another ninety days if needed.

     We closed without incident 15 days later. The owner moved upstairs and I commenced the repairs and painting. I put the house on the market with a small ad in the local paper and a for sale by owner sign with an open house that weekend. I sold the house in just two days time, as I priced it under the market. Thirty days later I put $40 thousand in my pocket for a few hours work. I was an inexperienced real estate investor. This was my very first deal! This is something anyone can do if you set your mind to the task and formulate a step by step plan. Everything you need to do the very same thing is waiting for you FREE here: www.foreclosurefolio.com

P. Mike Larson has been in the foreclosure business for over

twenty years. He has written past articles on finance, real estate

and tax credit investing. He can be reached at this address……

support@foreclosurefolio.com

What Goes Up Must Come Down

admin — Sat, 13 Mar 2010 21:04:52 +0000

By: Rex Arlington

What goes up, must come down. This is an old saying with common sense results. Generally in life, what goes up, does come down. This is what happened to the Real Estate market. Several years back, the real estate industry created risk loans that allowed many to qualify for home ownership. The problem was that these loans had payments that were set to increase over time.

I think its fair to say that although we might point the finger at the industry for allowing these loans to get approved, some responsiblity of course lays with the buyers and accepters of these special loans. Either way, the temptation was to great for many to resist and many walked away with home deals. As the years rolled by, many of these loans started to default because the home buyers simply could no longer afford the monthly payment. These defaulted loans eventually became and are becomming foreclosures.

Now we have a market that is flooded with properties. This is whats known as a buyers market. A buyers market is simply a housing market that has more properties for sale then normal which like any other industry, drives prices down. This increases the amount of deals on the market and competition between sellers increases.

The good news for buyers is that this means prices will be low and attractive. Real estate coaches will be able to assist those who need help. When purchasing a home in this type of environment, a good move is to make sure you pay a low price for the property. For those interested in flipping houses for profit, same thing goes. Buy low, so when you hit that buyers market and you want to sell your house, even if you have to sell it for a low price, because you purchased the property at a low price, you can make your profit.

Real Estate Coaching.

Read Before you Sign!

admin — Sat, 13 Mar 2010 20:55:07 +0000

By: Attorney William
Too many investors go to closing and sign documents without ever reading them, taking the word of the “professionals” involved in the closing. This is a huge mistake, unless that professional is your lawyer, and he or she has read and understood the loan documents. Don’t presume that the lawyer you are paying represents you.

Too many investors go to closing and sign documents without ever reading them, taking the word of the “professionals” involved in the closing. This is a huge mistake, unless that professional is your lawyer, and he or she has read and understood the loan documents. Don’t presume that the lawyer you are paying represents you. Many banks have lawyers that represent them and charge that fee to the borrower.

Mortgage brokers and lenders are not by their nature dishonest but there are enough shady characters that try to slip things by on borrowers. In some cases, it is a mistake by the lender or a miscommunication between the mortgage broker and the lender, both of which result in the borrower getting a different loan than what was promised.

The most common things that are incorrect on a loan are:

Prepayment Penalty—The most common “hidden” clause is a prepayment penalty that the lender does not disclose or that was supposed to be omitted. The only way to know for sure is to read your mortgage note to see if there is a prepayment penalty clause. In some cases, a lender may say there is no prepayment penalty, but has inserted a “soft” prepayment penalty (applies to . In addition, read carefully how much the penalty is, and how long after the loan is originated the penalty applies.

Fixed versus Adjustable Rate—If you pay for a fixed-rate loan, you may end up with a surprise at closing in the form of an adjustable-rate loan that is fixed only for a certain time period, such as two years. In some cases, you may be promised a five-year fixed rate and end up with a three-year fixed rate. Moreover, read carefully about how the loan adjusts. Some ARM loans can only be adjusted twice a year, others can be adjusted monthly.

Finally, look at the amount the loan can adjust each time, and the maximum rate the lender can charge over the life of the loan. All of this will be spelled out in the mortgage note. (Hint: if the note is titled, “Adjustable Rate Loan,” it’s a dead giveaway that you don’t have a fixed-rate loan!)

Owner-Occupied Loan—If you apply for the loan as investor, the mortgage broker may submit it for approval as an owner-occupied loan, either by accident or on purpose. Read the documents carefully. Do not sign your name to any document saying that you promise to live in the property if you aren’t actually going to do so. In most cases, the mortgage or deed of trust will have a rider (addendum) that says you do not intend to occupy the property as your principal residence.

The bottom line my friends, is READ before you sign. Once you sign, you are out of luck, because there’s no three-day right of rescission for an investor loan!

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Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

How to Get Every Penny you Need to Invest in Real Estate

admin — Sat, 13 Mar 2010 20:16:55 +0000

By: Trisha Dingillo
If you’ve tried the traditional mortgage broker route for investment financing, you know how hard it is to get a ‘no money down’ loan for real estate investing. Deals take a month to three months to close, sellers get angry at having to continuously extend their contracts, or pull out of the deal altogether, interest rates at close aren’t what you were quoted. I can tell you from experience, it’s a total mess, and a downright miserable experience. 10-20% down is more likely to have a smooth outcome.

Regular banks view investment loans as a higher risk. They reason, if the owner is not living in the property, in times of trouble they believe, an investor will opt to pay their own home mortgage first, with less consideration to the investment mortgage. This puts the bank in a very bad position. 100% financing for investment property is difficult to come by to say the least. VERY few lenders will even consider it.

If a lender will consider 100% financing, the requirements are hefty. You need top notch credit, access to at least 6 months of mortgage payments in liquid funds, 2 years full income documentation, and that’s not mentioning the property requirements.

That being said, real estate investors still are not advised to use their own money to do their deals. Even if you have 10-20% saved for specifically for a down payment on your investment property, most real estate guru’s warn, NEVER spend your own money on real estate investments. Most beginners start their investment career saving up for a down payment, but the fact is, a serious real estate investor does not use his own money to do real estate deals.

There are a couple of reasons for this.

1. Savvy investors always want their money somewhere where it’s working for them, yeilding interest and making more money.

2. If you are serious about investing, you’re going to be buying multiple properties, higher priced properties and eventually apartment buildings or commercial property. The fact is, if you’re paying 10-20% down on every deal, you’re going to run out of money fast, even if you have A LOT of money. When you’re ready to move on to the next good deal, and all of your money is tied up in your other property(s), and you’re going to lose out on possibly a really good deal.

So HOW THE HECK do you buy a property without a down payment, if its so incredibly hard to get a loan???

Buying real estate without using your own money IS possible, and it’s not difficult. With the right kind of deal, investment property can be purchased without a single penny of your own money.

Enter the world of Private Lending…

There are private lending companies that will give you every penny you will ever need for your real estate investments. Imagine having all the funds you need at your fingertips. If you’re finding the right kind of properties, you should never have to miss out on a deal again. After learning how to use a private lender to fund your deals, your business will flourish. Whether you’re brand new at investing, or a seasoned investor, all investors should learn how to use a private lender to fund their deals.

There are a few tips to getting financing from private lenders:

You will need to make sure your deal conforms to their standards. There are specific property requirements that will need to be met. But you’ll be happy to find that a privatelender cares mainly about the value of a property, and not how high of a risk you are. This means that you could have mediocre to poor credit, and you will still get your financing and knab that incredible deal.

Note: You will however, want to stay on top of your credit, as good practice. You’ll also want to keep some of your money in a bank account, where the lender can see it. (Privatelenders usually have a ‘just in case’ standard in terms of available dollars on hand) This makes you look more responsible. In general, good credit and a decent amount of money in the bank is a sign that a person takes care of their responsibilities. It’s a matter of trust. They want to know that you have the ability to get the deal done the way you have agreed to, and they will be repaid at the end of the loan term.

Private lenders offer short term loans for investment, usually six months to a year, possibly longer for larger projects. They lend at 65%-70% of the properties after repaired value (ARV) from the appraisal. If you are serious about investing in real estate, you really need your deals to be within this range for maximum profits. Here’s and example, if you’ve found a property for say $40,000, but it’s really worth $100,000 either right now, or after it has been rehabbed, a private lender will give you $65,000 to purchase and repair the property.

Most likely they will also roll closing costs into the loan, so you’re coming to the table with no money to close. The lender typically will charge points which is included in their closing costs (a fee paid to the lender for doing the loan, calculated in a percent of the loan amount. 1 point = 1%) Interest rates range from 13-18%, which is really not very high for a short term loan.

Points and high interest is a very small price to pay for having all the money you need right at your fingertips any time you find a good deal. Every investor knows time means money. The good deals go fast, and you need to move on them fast, or they will be gone in the blink of an eye.

If you plan on keeping the property as a rental, it’s incredibly easier to refinance into regular bank financing, and pay off the short term loan, than to try to get all the money upfront from a regular bank. There are usually no prepayment penalties to paying off a private lenders loan before the end of the term, so in any case, private financing is the way to go for a real estate investor. Hard money loans are quick and easy, and can really get your real estate business off the ground.

Trisha Dingillo is a licensed Illinois Mortgage Broker. She works mainly with real estate investors. She offers private financing at http://www.pleaseclose.com/trishadingillo

Using a Home Equity Line of Credit to Buy Properties

admin — Sat, 13 Mar 2010 20:16:47 +0000

By: Attorney William
A home equity line of credit (“HELOC”) can be an excellent financing tool, if it is used properly. A HELOC is basically a credit card secured by a mortgage or deed of trust on your property. You only pay interest on the amounts you borrow on the HELOC. If you don’t use the line of credit, you don’t have any monthly payments to make. You can access the HELOC by writing checks provided by the lender. In most cases, it will be a second lien on your property.

HELOCs are being advertised on television as a way to consolidate debt, but can be used much more effectively by investors. When you need cash in a hurry for a short period of time, a HELOC can be very useful. For example, if a seller tells you, “give me $75,000 cash on Friday and I’ll sell you my house for a song,” you need to act in a hurry. Another example of cash in a hurry is a foreclosure auction, which, in many states, requires payment at the end of the day of the auction. When you need cash in a hurry, there’s no time to go to the bank.

While the HELOC may be a high interest rate loan, it is a temporary financing source, which can be repaid when you refinance the property. Do not use your HELOC as a down payment or any other long–term financing source – it will generally get you into financial trouble. If you don’t pay the HELOC, you can lose your home!

Some institutional lenders will not lend you the balance if you borrowed the funds for the down payment. However, smaller commercial banks that “portfolio” loans have more flexibility and may allow you to use HELOC money as a down payment. Once again, I must caution you about using borrowed money in this manner – only do it if the deal is a steal and you can pay off the HELOC money within a few months.

DEDUCTING HELOC INTEREST

There are limits on the deductions you can take on your personal tax return for interest paid on your HELOC. Generally speaking, you can only deduct that portion of interest on debt that does not exceed the value of your home and is less than $100,000. But, if you do your real estate investments as a corporate entity, you can always loan the money to that entity and have the entity take the deduction as a business interest expense. This transaction must, of course, be reported on your personal return, and must be an “arms–length” transaction (i.e., documented in writing and within the realm of a normal business transaction). Consult with your tax advisor before proceeding with this strategy.

USING CREDIT CARDS

You may already have more available credit than you realize. Credit cards and other existing revolving debt accounts can be quite useful in real estate investing. Most major credit cards allow you to take cash advances or write checks to borrow on the account. The transaction fees and interest rates are fairly high, but you can access this money on 24 hours notice. Also, since credit card loans are unsecured, there are no other loan costs normally associated with a real estate transaction, such as title insurance, appraisals, pest inspections, surveys, etc.

Often, you will be better off paying 18% interest or more on a credit line for three to six months than paying 9% interest on institutional loans, which have up front costs that would take you years to recoup. Again, use credit cards carefully and only as a temporary solution if the deal calls for it.

Click Here for more info for Using a Home Equity Line of Credit to Buy Properties.

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

Help With Foreclosure?

admin — Sat, 13 Mar 2010 19:41:31 +0000

By: Bill Guerra
President Bush today announced the feds will help some homeowners who have adjustable and or high or otherwise unaffordable payments. Its called FHASecure. He said “there have been some exceeses in the lending industry” uh, duh, you think?

The program is to help folks who are 90 days late, yet still in there house. It will help them refinance at better rates so they avoid foreclosure. We know if several foreclosures continue to happen, then the home improvement industry like Lowe’s Home Depo ect will lay off folks etc, etc, and the hits would just keep coming.

Bush also will ask Congress to suspend, for a limited period, an Internal Revenue Service provision that penalizes borrowers who refinance the terms of their mortgage to reduce the size of the loan or who lose their homes to foreclosure.

His thought is also to identify people who are in danger of defaulting over the next two years and work with lenders, insurers and others to develop more favorable loan products for those borrowers. Many homeowners believed they could refinance their loans, but that has become much harder as lenders tighten their standards in the face of defaults and foreclosures. Sound familier???

In another move, Mr. Paulson and HUD Secretary Alphonso Jackson have instructed their staffs to begin working with mortgage lenders and others to identify borrowers who are in danger of defaulting. They also are trying to work with private lenders and mortgage giants Fannie Mae and Freddie Mac to develop loans for borrowers who will likely face default if they can’t get more flexible terms.

So, all that said, help could be on the horizen, Bush said he is not looking for a bail out of our problem, but a way to assist people who are facing these crisis. I willl keep the blog updated as this unfolds.

For more information visit Las Vsgas flipping real estate blog or our flipping real estate website

Bill Guerra resides and invests in Las Vegas, Nevada. He’s been a part of the real estate market in both up times and down, and has proven he knows how to make a profit even when “the cheese moves.”

When Bill began his life-altering path into real estate investing, he was dead broke and steeped in debt. The very idea of buying houses costing thousands of dollars seemed absurd and unrealistic.

But after a lot of personal research and a good bit of soul searching (not to mention some good old trial and error) Bill invested in his education, by purchasing some real estate investing courses. But rather than just letting them collect dust on the shelf as many do, Bill actually applied them in his own local market.

Amazingly, Bill has Bird-dogged, wholesaled, partnered, rehabbed, or purchased a total of 133 hours in 36 months – in a sellers market!

Homes for Sale Kefalonia

admin — Sat, 13 Mar 2010 19:17:09 +0000

By: David Smith
In the recent days, housing market is slowly shifting towards the buyer and as a result of which, many of the realtors are making good revenue by flipping real estate. The term “flipping” is very new for buying homes, which stands for renovating them, fixer-uppers, and then selling them at a profit margin. Flipping real estate system is fetching good revenues but not as huge as they once were. Regardless of knowing all the facts beginners are still entering this flipping arena to get success out of it.

Now a question will arise concerning such property is, “How much I need to pay for it?” The answer is diverse for all homes for sale and is not an exact science.

The most common method of calculating MAO [Maximum Allowable Offer] that gives you an idea of the cost of homes for sale after renovation are as follows,

MAO = ARV – Renovation Costs – BSH – profit margin

Repair After Value [ARV]

ARV is the possible price you may get on the sale of the possessions. The ARV [After Repair Value] is the cost of the homes for sale after renovation.

Points to remember

To determine this cost, your realtor may be able to help you to compare the prices for homes sold during the period of last 6-10 months.

The comparable homes should be located within 1 mile of the preferred property.

The comparable homes must be similar in characteristics to the home you desire to purchase.

The total area (square footage), features, age of the buildings, architecture and types of rooms presented must be similar.

Ignore the difference in the homes for sale conditions.

Renovation Cost

Renovation cost is the cost of renovating the property in order to turn a profit.

Points to remember:

Examine the property with your realtor and take remarks.

What are changes required in order to compare the property with the other homes for sale?

Calculate the expected and unexpected renovation cost and discuss with your professional realtor.

Calculate each renovation requirements; add them and you will probably get the renovation cost.

BHS (Buy, sell and hold)

After flipping few homes for sale, you will able to calculate the percentage of ARV to compute these expenses. Buying and selling of home will incur fees like debt collection, appraisers, title search and insurance, attorneys, loan origination fees and many more. Whereas, the holding cost will incorporate insurance, lawn care, utilities and others that you will incur during the purchase of properties and closing of properties.

Profit Margin

MAO or Maximum Allowable Offer is the maximum amount that you will offer on homes for sale. To ensure higher profit margin, you need to offer the lowest amount to the seller to accept on our venture. It is the deal breaker.

If you need more information on Homes For Sale Kefalonia, please feel free to get in touch with AEC-Group.

He has a natural writing flair and an eye for trends,based on his extensive background and recognised training in
the writing world.

Easy Steps on How to Flip a House

admin — Fri, 12 Mar 2010 11:58:28 +0000

By: Cedric Welsch

Accomplishing the task of how to flip a house involves a series of calculated steps. Ironically, while this property business venture uses quick selling methods, the process that facilitates its beginning is more complicated. Actually it is not that complicated in terms of technicality. But those who have extensive experience with real estate and property developments would be the ones to surely succeed in this endeavor.

But what if you are neither of those people? What if you are an average person who wants to venture into the flipping business?

Here are some practically smart steps you can follow on how to flip a house, especially if it will be your first time to do so:

1.) Learn all about the real estate. Know the process involved in buying different types of properties like condominium units, furnished houses, bungalows, and duplexes-just about anything that can be qualified as a home establishment. This will provide the basic knowledge corollary to flipping a house. It would even be good to try buying a property without the intention of flipping it. You can also consult realtors about the ins and outs of property buying by attending open house events where sales people would be more than happy to share with you their thoughts on real estate.

2.) After or even during the first step, you must also learn about the real deal when it comes to the real estate industry. Keep yourself informed of the latest news and issues surrounding this particular business venture you wanted to enter. It’s not enough that you know how to buy houses, what’s even much better is that you know the current condition of buying houses. This will give you a better idea on how to play the field. You can take some time to read the newspapers or browse magazines about home and living.

3.) When you have your basics in check and the current industry situation to guide you, you are now ready to face the next step in flipping a house-looking for your property. When it comes to flipping houses, it’s not enough that you settle based on price alone. Keep in mind that house flipping usually involves making repairs too because you obtain the property at the fastest time possible at its lowest selling price. Look at the areas for improvement and the key selling points of the house that you are planning to buy. It would also be wise to consider buying mid-range type of house that average families will be able to afford.

4.) And last on our how to flip a house, is about obtaining a loan if you have to for making repairs. Just avoid repairing the house from your own expenses as much as possible. If your budget won’t fit then it’s better to take a loan so you can separate business from personal finances. Some experts say that you should even consider getting a loan that costs more than it took for you to buy the property because you can eventually cover this with the selling price you will use upon turnover to your own buyer.

Discover how to flip properties or houses and make huge profits doing that?

Venture into the wholesaling real estate business and turn this year’s real estate meltdown into your biggest opportunity ever as you generate huge profits for you and your family.

Hard Money High Interest Explained

admin — Fri, 12 Mar 2010 11:45:20 +0000

By: Samantha Dawson

The interest rates given by hard money lenders are usually twice that of traditional lenders such as banks. However, successful investors still prefer using hard money over other forms of loans whenever they flip or wholesale houses. Why? Because a good investor looks at the rate of return, not the interest rate.

The logic behind this “creative financing” is that the profit in flipping houses should be huge. For instance, if you will earn a 50% rate of return from a deal, would it still matter if you pay back an 18% interest rate?

For those who advise against this practice, it would seem as if it is a crazy idea to opt for an 18% interest rate over 10%. That is, if you don’t consider the time element. Hard money loans are released in just days, compared to traditional loans, which may take weeks to process. Take note of the word “process,” which means its approval is not always guaranteed.

Unlike banks and other lending institutions, hard money lenders usually operate on their own. That means that if you manage to convince the lender, then you get the loan. This swiftness element makes it more appealing, if not suitable for wholesaling and flipping houses, a business that operates on a relatively fast timeline.

Hard money is also ideal for those who have low credit scores but have a knack for good deals. Lenders in this business assess borrowers based on the deal they have and not on their credit scores. So if a lender approves your application, that means you bagged a good deal and the house you will flip or wholesale indeed has a potential to give you profit. Otherwise, hard money lenders would not approve that property as collateral for the loan.

Hard money lenders are scattered across the country. You can check RehabHardMoney.com. The web site offers loans for investment properties. www.RehabHardMoney.com also serves as a meeting place for thousands of hard money borrowers and lenders nationwide.

RehabHardMoney.com is a sister site to our flagship website RehabList.com. We have been hard money lenders in our local market for over a decade.