David Lindahl's 60 Second Insights - Property Income

5 Unique Ways To Find Funding For Real Estate

Despite the current slump in the housing market, it can be an attractive time to acquire funding for a real estate property. I made my move into the real estate business at a time when it was “risky” and not a sure thing, but I have comprised systems that allow me to not only survive the slump, but profit from it. We all know the time to buy is not when you hear everyone saying it a great time to get in the market. We want to get in before that. I had a mere $800 to my name when I decided I to make real estate work for me. There are many ways to go about funding your next real estate deal, but today I would like to focus on grants, private investors, sellers, liquefying assets, and loans. 

Grants:

The government dishes out millions of dollars each year in grants to those seeking funding for real estate ventures. This is mainly because one of the government’s main duties is to provide housing for U.S residents. Not only are the grants there to help the brokers, but also acts as an outsourced entity for the government. There are not only federal grants for which you can apply, but also state level grants as well. 

Private Investors:

If you can be provided with an opportunity to sit down with someone who is willing to entertain putting forth a little investment capital for a possible venture, wear your best suit and tie. Have a professional proposal detailing your outlying costs and show the bottom line of your profit margin. Chances are your investor will be looking for a faster return on their money than a financial institution will. 

The seller (can you believe this?):

Yes, you can possibly obtain the money needed for a property from the seller. It may benefit the seller more to finance your purchase than to maybe face foreclosure. In some instances the seller is willing to add additional money to the price of the property to account for the down payment and the closing costs. This additional money may need to be covered in a certain time period such as a deferred down payment. It will increase your interest to carry that extension on your balance; however it will buy you some time to earn more capital. 

Liquefying any assets:

If you feel strongly about entering in to the market and have tried other avenues to obtain capital; you may think about liquefying any available assets. You can cash in any stocks, bonds or other savings. Also you may contemplate turning over your 401K in hopes that you can replenish your retirement fund with a much more lucrative investment in larger sums. Especially if you can invest then into a CD account which yields higher interest. However, seek professional guidance before making this move. We always need to think through our investments from how to get a deal to the proper exit strategy! 

Loans:

If all else fails, it is still possible to obtain an investment loan from a bank or credit union. You may be required to possess a higher credit score and/or have substantial collateral to convince the bank to fund your venture. In this instance you may or may not receive the full amount necessary, and will also need to consider the interest rate that will be assessed above the loan. This will be essential when completing a bank proposal. The right way to fund a deal is different for each circumstance. As a professional investor it is important to be able to use all the tools necessary to get the deal done. Understanding all your options enables you to be the investor that gets the deal done. Once you establish yourself as a closer the deals will start to run to your door.

Investing With Limited Capital

One of the most common questions I hear is can I invest in Real Estate even if I have very limited capital. The answer is YES. In fact, I started out with no capital nearly 20 years ago. I completed my first Real Estate Investment by using credit cards. And in the end, I was able to pay off my credit card balances. More importantly, I set myself out on the path to learn all about Investment Real Estate. I started to find answers to my questions and I began to eliminate my fears. Educating myself made it a lot easier to make my next Real Estate Investments. Fast forward 20 years—I’ve raised more than $33 million to fund my Real Estate deals. I now control over $260 million in Investment Real Estate. 

Rather than sitting around worrying about your finances and wondering how to get into Investment Real Estate, set yourself on the path to financial freedom by developing the skills and expertise needed to successfully invest in real estate with no down payment, or without using any of your own financial resources for the down payment. Take advantage of my nearly 20 years experience and learn my systems and strategies.

Even though I completed my first Investment Real Estate deal using credit, you don’t have to. Instead, you can buy Real Estate without utilizing any of your own financial resources. There is “private money” and/or “hard money.” You just have to know how to find it. Many Real Estate Investors start out with “hard money” because it’s easy if you don’t have any capital or if you have bad credit. The only thing you need, to get “hard money” for your deal, is a qualifying piece of property (which you’d have to buy for 65 cents on the dollar or better to qualify). 

Then there is “private money.” The sooner you get “private money,” the sooner your Real Estate investment business is going to grow. And it’s not hard to get. When individuals with great financial resources give you their support to complete your Real Estate deal, you have “private money.” You will have either a debt partner who is someone who walks away after the deal is done, or an equity partner, who is someone who gets part of the profits. Either way, you are investing in Real Estate without any of your own financial resources down. 

If you would like more detailed information on investing in Real Estate without using your own capital as a down payment or Real Estate Investments using other people’s financial resources, please contact us.

Is There a Lot of Competition in Real Estate Investing?

Yes and No. There are many people out there who buy and sell Real Estate. However, there really aren’t that many who have a good strategy for being a successful Real Estate Investor. If you do not have a solid strategy, and if you restrict yourself only to your local Real Estate market then yes, you could find yourself with a lot of Real Estate Investing competition. If you have a strategy in which you examine markets throughout the country, and where you have access to safely and easily search for properties nationwide right from the comfort of your own home then no, there’s almost no competition. 

How to Beat the Real Estate Investing Competition

For example, if you happen to live in an area where foreclosures skyrocketed in the past few years or perhaps if your area happens to have a big renter vs. owner population, then there may be limited opportunity there due to a lot of competition. 

Conversely, when you open up your Real Estate Investing strategy to encompass a nationwide scope, you can live in that same exact area, but now you have access to properties and opportunities with no or very little competition. 

For example, you can reside in a small town in rural Texas, yet you can become a successful investor in suburban Ohio, northern Florida, or in the city of Chicago—the possibilities could be endless. 

Why would you want to do this?

Discover Hidden Opportunities Others Don’t Notice

There are many incredible Real Estate investment opportunities located in various regions throughout the United States that go completely unnoticed or are found only by the most savvy investors. 

There are a few reasons why this happens. One big reason is that properties might be located in what seems to be undesirable areas, and many investors do not know enough about how to do the proper research to find such properties. Therefore, many potential investors lose out on opportunities to invest in hidden gems.

Earn Big By Thinking Big

In conclusion, if you have a strong strategy in which you look for Real Estate investing opportunities all across the United States, you can beat the competition and achieve Investment Real Estate success. 

It might seem daunting but in reality, it’s not difficult to do once you understand the process.

Is “Flipping” Homes Illegal?

This is a common question from novice investors just looking into investing in residential Real Estate for the first time. The answer is NO—Flipping, also known as wholesaling, is a very legitimate, lucrative and LEGAL business practice.

Simply put, flipping houses involves a Real Estate investor who purchases a property in need of some repairs, who then makes the repairs to improve the property and increase its value. Then, due to the property’s increased worth, the investor is able to sell the property for more than he or she purchased it.

The other, even quicker form of wholesaling involves some different processes the investor can use to complete his or her Real Estate deal. The investor could wholesale a property by selling it directly to another investor by assigning the contract. Or, the investor could simultaneously purchase and sell a property to another investor who sells to a final buyer.

It is important to note that there are dishonest Real Estate investors, agents, appraisers, lawyers and/or mortgage officers out there who do illegal things to make money illegally in Real Estate. Watch out for appraisers who inflate home values; investors or loan officers trying to pass funds “under the table” in order to get unqualified buyers into the transaction; or lawyers who are willing to falsify documents necessary to complete a transaction. All of this is illegal.

Take the necessary steps to ensure you have as much knowledge as possible before stepping into your first Real Estate investment.