Another great meeting last night.  We had a fairly packed house to see Anil moderate a panel consisting of private-ish/hard-ish lenders Mike Yalowitz and Karen Fischer, whom I've used numerous times to fund my deals,
Bill Rookstool, everyone's favorite lender and market forecaster, and Bill Shipp, who I had the pleasure of meeting for the first time yesterday and is yet another wealth of knowledge.

When I first got started, I went through the whole “I wanna do it all!” phase that a lot of new investors do. Every new strategy I learned about was exciting, and they all looked so profitable, and I had big goals about money and lifestyle that absolutely DROVE me to buy all the courses, do all the things, and become a tycoon as soon as possible, leave nothing on the table in the way of opportunities.

Where did that land me?

Working 18 hours a day 7 days a week.

Doing a lot of things that didn’t really “fit” me. Like rehabs. Which were profitable but didn’t really fit with my ‘details are hard’ brain.

Stressed out.

Ultimately divorced.

Yes, I made a lot of money, but I had no life.

And I’d love to say that once I homed in on the strategies I liked and was good at, figuring out how to spend my
Read More...

Note: laws and regulations regarding the advertising, registering, and formalization of private loans vary enormously state-to-state. Generally, these rules apply to the borrower rather than the lender, but even lenders should be aware of what the laws in your state say about these transactions. Of course, this article is not intended as legal, accounting, or other professional advice. Always consult with your legal, accounting, or other professional before making any investment.  Further, nothing in this article should be construed as an offering or solicitation of a security.

Private lending is a strategy in which even moderate-income investors can easily get involved.

There are plenty of real estate entrepreneurs and rehabbers who want to borrow your money; if you let it be known you have as little as $20,000 to lend in most markets, someone will be right there ready to put that cash to work.

If all goes as it’s supposed to, it’s a truly hand-off investment; you just sit back and collect checks. And the return is oh-so-much-better than other fixed-rate investments; you can expect to average around 6-8% per year total (because higher rate loans are generally also shorter term; when you loan money to a rehabber
Read More...

Thinking of buying or selling a home?

Even when both sides agree on a price, the deal could fall apart thanks to an under-appraisal.

Here’s the increasingly common scenario: The seller lists the house for $325,000, the buyer offers $275,000 and they settle on a $300,000 sales price. A week before closing, the appraisal comes in at $265,000, the maximum upon which the bank or mortgage company is willing to lend.

Who’s going to make up the $35,000 shortfall?

“This has proven to be a fairly significant problem,” says
Walter Molony, senior public affairs specialist with the National Association of Realtors in Washington, D.C. In the aforementioned scenario, the seller — having already come down — typically doesn’t want to drop the price further. The buyer may not have the available cash or may not be willing to pay more than the appraised value.

Consequently, the wheels often fall off the deal.

Bitter pill

Short appraisals typically arise in a declining housing market because of the lack of recent comparable area homes sales, or “comps,” making it difficult for appraisers to determine the current market value of a property. When home sales slow, good comps “age” fast. Add foreclosures and short sales to the mix and appraisals can run all over the map. The Home Valuation Code of Conduct, or HVCC, that went into effect in 200
Read More...

You’ve made the decision to invest in Real Estate and are going through the process of building your team. However, one thing keeps jumping out at you – your bank account doesn’t have enough cash to fund the $125,000 you estimate you need to buy, rehab and hold an investment property you have your eyes on.

Just like the majority of other Real Estate Investors, you need to find a source of funds to complete your deals.

What you need to do is to sit down and think like a lender. 

If you were lending someone money to invest in real estate, what would you be looking for? Remember, you are putting your hard-earned funds at risk if the person you are lending to doesn’t get the job done. Hence, you will want to look at the situation very carefully before agreeing to be their lender. What are your biggest areas of concern? Before reading further, think of at least three questions you would want your borrower to answer.

Banks and private lenders go through the same practice.

Their goal is to generate a return on their capital while minimizing their risk. You need to prove to your lender that the investment you are asking them to fund is virtually risk-free. The riskier the venture, the higher the cost of capital.

Lenders look at the six C’s of Credit:

1. Character – or perceived integrity
   Read More...