Real Estate Investing Blog - DiscountedProperties.com

Real estate investing is basically a tug of war between profit and loss. Once you’ve found a property you think has the potential to help you reach your financial goals, reality sets in. If this investment is going to pan out the way you have it planned, you’re going to need to locate a good residential hard money rehab loan. On this front, there’s good news and bad news.

First the bad news: Residential hard money rehab dollars don’t grow on trees, and there are fewer lenders today than there were just a year ago. Hard money lenders – like the more traditional institutional lenders – have tightened lending restrictions and many have gone belly up.

Now the good news: While there are fewer residential hard money rehab lenders, the ones that remain are stronger than ever and are more committed to sticking around for the long term. They have cash to lend, so if you have a winning project and you can demonstrate a solid plan for turning a profit – and you can back your plan up with solid numbers – you stand an excellent chance of being approved for your residential hard money rehab loan.

You’ll pay more in interest and points than you might like, but the important thing is that your project can still be funded, even in these challenging times. So do your homework, find the most lucrative investment properties you can, and take your proposal to the residential hard money rehab lender of your choice.

The time to seize your future is now, while prices are low, and other investors are afraid to pull the trigger on investing. Conditions are ripe for massive real estate profits. Are you ready?

For those of you who are thinking about getting into real estate investing, you are in for an exciting time! You also may very well be in for a making a pretty good profit if you know what you are doing. Real estate investing can be really lucrative but you need to know how to maximize your profits. For some tips for investing real estate money, people who have experience will give you good advice.

Never underestimate the value of networking with your peers in the industry. Networking for tips for investing real estate money is a great idea. Also, do research on the Internet and in local real estate magazines for tips for investing real estate money and use your common sense above all!

To get you started, though, here are the top five tips for investing real estate you should pay attention to if you want to be successful…and who doesn’t want to be successful?

1. Do your homework. You have to be familiar with your industry to make a profit from it. Understand the various options for real estate investing including flipping houses, wholesaling, fixer upper homes, rentals and commercial spaces.

2. Make sure you know your area and the prices associated with your particular transaction. For example, know rental prices, current market conditions, repair costs, etc. depending on the type of investment you are considering.

3. Don’t get emotional. This is a business opportunity and a financial investment. Don’t get too caught up in the process or invested in a particular house for emotional reasons. There are always other houses. Know when to walk away when it won’t be lucrative enough.

4. Understand various financing options. Some financing options are better than others and some are better suited to different situations. Understand the ins and outs of mortgage loans, IRA investments and hard money loans to determine which option is best for you.

5. Secure your financing first. You don’t want to find the perfect house and then have financing fall through. Get pre approved for loans or have our financing options readily available to you when it is time to act.

Those are the top five tips for investing real estate but there are certainly many others. A lot of the tips for investing real estate will come to you as you gain experience in the investment game. If you prefer a particular investment niche the tips for investing real estate can become much more specific also. You will need to be familiar with all the aspects of investing from finding the house, to securing the sale to advertising and selling or renting in order to maximize your earning potential. However, once you start researching and getting some experience, you will have all the tips for investing real estate you will need to make a successful venture.

Hard money finance can be a means to an end for some people and it can be beneficial. But, it really should be thought of as a last resort and not something to bank on for a long term solution. There are a few advantages to hard money finance but there are a ton of risks. Before discussing the pros and cons of hard money finance, let’s first define what, exactly, it is. Hard money finance is a loan that uses your real estate as collateral and is generally given to those who are in a position to be unable to get a traditional loan. Usually these loans are offered by private companies not banks.

So, you can’t get a traditional loan but you can get hard money finance. What’s the problem? Sounds good, right? Here’s where we discuss the cons:

First, hard money finance loans are usually secured with your real estate which means your home or property. This in itself is risky but not more so than a traditional mortgage which basically does the same thing. But, the loan itself is usually set at a much lower loan to value ratio than a mortgage. For example, say you have a home worth $100,000.00. The maximum amount you would likely get from hard money finance is $70,000.00 or 70% of the value. Often the ratio is even lower than that.

Next, the interest rates on hard money finance are exorbitant. Where a mortgage may have varying rates depending on your credit score, hard money finance starts high regardless of how pristine your credit is. While an estimate for hard money finance interest rates can not be accurately made because it varies greatly depending on the real estate market, most will start no less than fifteen percent. That’s a pretty high interest rate to get into!

So, you know what your risks are: you will likely have a huge payment, high interest rates and a low LTV rate. Are there any advantages to hard money finance? Yes. Is there ever a time you should use hard money finance? Sure.

Hard money finance is easier to get into. Credit is not usually an issue. You get your money faster also so you can spend it on what you need to. So, there are certain situations where hard money finance makes sense. In the case of getting into a fixer upper property or in bailing yourself out of a possible foreclosure, hard money finance can be just the ticket. But, hard money finance is beneficial if only used as a short term solution.

For example, say you are about to have your house foreclosed on because you lost your job. You can get hard money finance and save your home. If you gain employment and are able to refinance in a traditional manner, while you may have paid extra for the creative interim financing, you still have your home and the bulk of your investment. Or, if you have a fixer upper home a traditional mortgage company will not touch, you can get hard money finance if you believe you can flip the house or rent it and turn a profit quickly to pay off the loan.