WHY USE PRIVATE MONEY LENDERS?

 

WHY USE PRIVATE MONEY LENDERS?

1. Private lenders for real estate are offering competitive interest rates

Since a loan on an investment property is secured by a recorded Deed of Trust, private lenders can offer interest rates that are competitive with the open market.

Additionally, since private lenders for real estate are looking for investment properties, they are more likely to offer these rates on properties without a current cash flow than traditional banks, which are still restricting lending.

2. Private Money loans are faster and more flexible than other loans options

Since private lenders use the same investing principles as you do, they can make a quick decision, allowing you to avoid the long process of traditional bank underwriting.

3. Private lenders’ debt service coverage ratio is less strict

Since private lenders do not have the same underwriting process as traditional loan servicing arrangements, they have more flexibility to look at other factors influencing loan repayment.

4. Offer shorter terms

Working with private money lenders offer shorter terms to allow you to secure the property, avoid prepayment penalties, and look to traditional financing once the property is stabilized if necessary.

5. Real estate provides you better access to loans

While keeping traditional loan benefits. With private loans, you still have the same protections as with traditional bank loans, but are able to take advantage of a hard money loan process that moves more quickly and is inherently more flexible than conventional permanent financing.

6. It is less frequent for private loans to be packaged and resold

For real estate, they look specifically at you and your property to make an investment decision, and once they have found a good risk they are unlikely to sell their investment. This allows you a measure of confidence which you will still be doing business with the same partners for the life of a loan.

Even though cash buyers are a great resource for funding and buying real estate, Private Lenders are able to provide investment resources above and beyond what a typical cash buyers may be able to provide.




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PRIVATE MONEY LENDERS - REAL ESTATE SOLUTIONS

 

PRIVATE MONEY LENDERS - REAL ESTATE SOLUTIONS

The coronavirus pandemic has thrown a monkey-wrench into all facets of life, including paying rent or the mortgage for some which includes real estate investors.

The real estate investment outlook prior to the coronavirus pandemic was looking pretty good with low interest rates, and new home construction still doing well. Fix-and-Flips were on the rise and rentals, though increasing, still were becoming occupied.

However, since the coronavirus pandemic, real estate businesses have either accelerated the growth of their real estate businesses or have watched their real estate businesses decline.

The coronavirus pandemic has impacted all businesses, with smaller companies being hit harder, especially companies with fewer than a couple dozen employees. Why?

Because a small business with fewer than a few dozen employees typically lacks cash flow and capital. Those companies were the first to reduce hours for employees or lay off employees. Those businesses were also the first to stop hiring subcontractors.

With the U.S. officially in a recession, millions of people are suffering.

And acting with compassion over the next 6-12 months is key, whether it is towards homeowners or landlords in trouble or renters having issues making payments.

However, for individuals who are properly positioned as real estate investors, the next few years will spell out O.P.P.O.R.T.U.N.I.T.Y

Even if the extra unemployment benefits and eviction moratoriums currently sun-setting get extended, they will expire eventually.

Between landlords having trouble collecting rents and homeowners in forbearance accumulating a pile of debt, there will be more distressed sales coming online.

Rentals will become cheaper…

And fix and flips will have less “newbies” competing for them.But…because of our housing shortage and continuing low interest rates, people will still buy your fix and flips (if you’re still in business).

The question is, are you going to be positioned to take advantage of these opportunities? Unfortunately, when the housing market softens or does anything resembling a crash, traditional financing dries up.

Hard money lenders go out of business left and right because they have lent to the wrong investors and banks get scared. So they pull out of lending on anything that’s not deemed “very safe”… They cancel credit lines, stop lending on construction or rehabs…And generally just crawl into a corner in a fetal position…(try to picture a “bank” in a fetal position…pretty funny).

That’s the hilarious thing about “Times of Opportunity”:

Most people get scared exactly when they should be entering the market in full force! So how do you ensure that you can still close on deals when all the dummies run for the hills?

Answer: Private Money Lenders

If you have solid private lending relationships, you will be able to pull the trigger on any deal you want. No matter what the market is doing or how many hard money lenders are filing bankruptcy.

1. Private money is personal.
2. Private money is flexible.
3. Private money is crash resistant.

If you BRRRR deals (Buy, Rehab, Rent, Refinance, Repeat), private money is crucial for short-term funding.

If you do fix/flips, private money is a FAR cheaper alternative to hard money and less risky. And if YOU are a good, honorable steward of that money, it will keep flowing to you.


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5 Steps to Win the Negotiation Battle

5 Steps to Win the Negotiation Battle

RECBL - Real Estate News

We’ve all been there. Whether it’s negotiating a deal, a repair request or price, both sides are at an impasse. What’s your next step?

Agents recall themselves being in this situation many times, and have been tempted to simply kill the deal. But ultimately, the goal is to put the client’s interests ahead of our own interests and feelings and to create a win-win-win scenario. Are you capable of doing this, or does your temper get the best of you?

To make sure you can avoid the loss of temper and ultimately the deal, here are five ways to win your next negotiation.

1. Take a deep breath and walk away from the computer or phone and change your mind set. Get back on the phone or send an email asking the other agent what would make the deal work for his or her clients. This change in mindset may be enough to win your way into working out the deal.

2. Consider being a bit more transparent to the other agent. The conversation may go something like this: "I wanted to open up and let you know that this is a tough one for me. My buyers/sellers see things a little differently, and I’m simply trying to live up to their expectations. Can you help me out?" By telegraphing the fact that you’re being transparent and not giving away too much information, you may shift the negotiations back into your favor.

3. Try to get into the other agents head by asking for their thoughts. A perfect example is a deal I’m currently working on. We have an appraisal problem, and there’s a difference of $23,000 between the contract price and appraisal. I had a heart-to-heart with the buyer’s agent and found out that his buyer agrees with the contract price, but doesn’t have the money to come up with the difference. I also learned that the buyer is a widower and has four kids. That gave me enough information to go back to my seller and explain what the buyer is up against. They’re considering a price drop of $10,000 in an effort to meet the buyer halfway.

4. In a tough deal with an agent you’ve never worked with, your goal should be to create the same feeling you get when working with a friend or agent you’ve had a good cross-sale experience with. How? Social media. The goal is to learn as much about the other agent as possible. Maybe you have friends in common or attend similar types of social events. Making a connection like you would with the client could help you win the negotiation.

5. Slow the negotiations down. Instead of getting back to the other agent in an hour, wait until the next day (unless you’re under deadline). This helps keep the momentum on your side and timetable. It may not mean much to you, but if you tell your client what you’re doing and prepare them for the slowdown, the other side is caught off guard. The other agent may not care or have a clue what’s going on, but the other agent’s client may start having second thoughts. It may be enough to move the other agent’s client to a different position.

Bob Sokoler is the owner of a team in Louisville, Ky., which has ranked No. 1 in the city for sales volume six years in a row. His team sold more than 404 properties in 2016, and more than 340 properties in 2015. Contact him at Bob@WeSellLouisville.com.

For more information, please visit www.workmansuccesssystems.com.

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