Traits of a Successful Real Estate Investor

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Real estate is not for the weak. We all know this. But what makes a strong real estate investor? What is it that makes one person rise above the rest and another fall flat on their face? There are certain traits, habits and characteristics that successful real estate investors have that other unsuccessful investors don’t.

So what are these traits that you should be working be working on? Here’s a list of 10 characteristics you should have if you want to be successful in the real estate industry.

  1. Outgoing: You’re not going to have someone at your side every second of the day telling you what to do or say. You need to take the initiative and put yourself out there. Talk to everyone. Ask for referrals. Be friendly and courteous. The more people you talk to, the more chances you have of meeting someone who is interested in buying or selling a property.
  2. Good Listener: You need to be able to listen to your clients. When they are talking to you, listen. Don’t be sitting there planning in your mind what you’re going to say to them. Listen when they talk. The information they share with you will help you find the right property for them.
  3. Determined: Never give up. You should always have multiple clients and multiple properties. When you are working, work. Stay focused and remember your goals. Even when clients decide to turn down your offers, keep moving forward.
  4. A Thick Skin: You will be turned down. You will have confrontations with people. It’s a part of the business. But don’t let negative comments drag you down. Stay positive. Don’t take things personally.
  5. Organized: Keep track of everything. This includes information about clients, potential property investments, finances, your time, etc. Set up an organizational system that works for you. Plan out your days, have to-do lists, evaluate your productivity and make necessary changes. All of these things will help ensure that you stay on task and keep organized.
  6. Punctual: Always be on time. You never want to be the one everyone else is waiting on. Get there first. On time is 10 minutes early.
  7. Excellent People Skills: You will be talking to people. You will be selling to people. Not only will you need to be able to carry on a conversation with a complete stranger but you’ll need to get them talking about private information. You’ll need to about their finances, their goals, their lifestyle, etc.
  8. Goal Oriented: You have to have a destination in mind. Know where you want to end up and how you’re going to get there. You need to set goals and make plans that will help you achieve you dreams.
  9. Hard Worker: Being a real estate investor will require a lot of time on your part. You’ll have to make sacrifices and push yourself hard.  You can’t be lazy and expect your business to take off. You will have to work hard and make it happen for yourself.
  10. Passionate About Real Estate: You will be making this your life. You need to have a passion for the industry. You have to get excited about finding properties, meeting new people and helping those people find homes.

If you look at that list and think that you don’t meet those expectations, think again. Each one of these traits can be learned. Some people are people are born with these characteristics and others have to be taught. So get out there and become the kind of real estate investor you want to be.

Finding Time for Your Real Estate Investing Business

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You might be sitting at your computer right now thinking to yourself, There’s no way I can get all this done. I just don’t have the time. Stop that negative thinking right now. If you keep that attitude, you really won’t ever have time to get your real estate business up and running.

The truth of the matter is that you do have the time; you just might have to sacrifice certain things to free up 30 minutes here and 30 minutes there.  Think about what you do in the morning when you get up, what you throughout the day all the way till you go to sleep at night.

Do what you need to in order to get your business going.

  1. Wake Up-

How many times do you hit the snooze button? How long do you lay in bed half dreaming half awake? Some people hear their alarm and they jump right out bed and hop in the shower. Others struggle. They lay in bed for another 30 minutes before they finally crawl out and make their way to the bathroom.

Get up when you’re alarm goes off. If you’re one of those people that take 20 minutes to get up, use that time to plan out your day and go over your to-do list instead of lying in bed with the covers up.

  1. Schedule your Day-

Get a planner- use an app or a physical planner, whatever works best for you- and keep track of everything you need to do, due dates, people you need to get in contact with, etc.

Write down not only what you need to do but when you’ll do it as well.

  1. Get Rid of Distractions-

The biggest distraction you will have to learn to control is the one you carry around in your pocket: your smartphone. You have games, social media, you tube, and apps galore all at your fingertips.

You need to learn to control the time you spend on your phone. It’s a time sucker. A quick peek at a Facebook post from a friend ends in you watching animal fail gifs 40 minutes later.

Keep track of the time you spend on your phone. If you are in the middle of working on something, don’t pick up your phone, it can wait. When you’re working put all your focus there.

  1. Cut Out Some of Your TV Time-

A lot of people spend hours a day watching TV. You have a lot of option with this. You can either cut back and watch fewer shows or you could try and multi-task and work while you watch. You need to know that if you choose to work while you watch your attention won’t be fully on one thing so I wouldn’t try and do anything that requires a lot of focus. Instead I would do something that doesn’t require too much thinking.

  1. Reprioritize your Extra-Curricular Activities-

Think about all the groups or organizations that you are a part of. Decide if you should spend less time with some of them or if you could even stop participating in them for a short time.

This could also include time you spend with friends going out at night. Let them know you don’t have as much free time as you used to have, friends and family will understand.

  1. Look While you Travel-

Whether you’re heading home or driving to the grocery store look for investment properties. Keep your eyes open everywhere you go. There are investment opportunities in every city and every neighborhood you drive through.

One of the most important tips I can give you is that when you work, work. If you actually spend the time you set apart for your business on your business you will have enough time to get everything done.

Direct Mail’s Role in the Real Estate Business

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In today’s world of fast paced technology and instant gratification, you might be tempted to say that old-fashioned mail no longer holds its place as a leading form of interaction between a business and their customers. But that is far from the truth.

It’s true that mail has received the nick-name “snail-mail” for a reason; it’s slow, at least slower than an almost instant email. But that doesn’t mean that it isn’t important.

Real Estate is all about who you know, what contacts you have and how good you are at staying in contact with them. It’s your responsibility to use all the tools available to you in order to do your job to the best of your abilities.

When used right, direct mail can have a great impact on your real estate business. If you’re on the fence about using direct mail, here are 4 reasons you should look into it:

1.       Send Them to Your Site

In every piece of mail you send, invite them to your site. Always have information, such as your website, blog, phone number, etc. in an easy to see spot. Have a slogan that is easy to remember and use it.

If you can get people to remember you and get them to your website, you are on the right track to a successful real estate investment.

2.       Cover all Your Bases

So many people are overwhelmed by the amount of emails they receive that they don’t check all of them. I’m guilty of glancing at my email and deleting tons of emails without ever opening them. Everyone does it. Our time is valuable. If you look at something and don’t see immediate value in it, you’re not going to spend any more time on it than you have to.

By sending a post card in the mail, you’re giving your client base a chance to quickly glance at something and see all the important information at once. Sure, some people will still throw it away, but others will take time to read it and even go to your site.

3.       Varies your Contact Methods

You should be contacting everyone on your mailing list at least 5-8 times a year. By throwing in a post card or newsletter every once in a while you’re changing things up. Most people like variety. By using various methods to get in touch with your customers, you are creating more opportunities for them to see your information which can lead them to remembering you.

4.       It Shows you Value them

Every year on my birthday my insurance company sends me a postcard with a coupon for a free ice cream cone at our neighborhood ice cream joint. I know that sounds trivial, but to me it shows that they’re thinking about me. (I know they do it for all their clients, but it’s nice.) A quick note goes a long way. It lets people know that you remember them and that you value their business.

Real Estate Terms you should be Familiar With

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Real estate has its own lingo and in order to be at the top of the pack, you need to be fluent. It’s best to start with the basics and then move on from there. You have to give yourself a good foundation to build on. All of these terms are important to your success. You should know what they mean and why they’re important.

Real Estate Agent: A person who is licensed to advise another person on real estate issues and negotiate real estate deals.

Appraisal: An estimation of the value of the property.

Appreciation: An increase or rise in the value of a property.

Depreciation: A decrease in the value of a property.

Equity: The value of a property beyond what is owed on it.

Fair Market Value: The anticipated or estimated selling price of a property based on comparable sales.

Raw Land: Land that hasn’t been developed yet.

HOA (condos, townhomes, etc.): HOA stands for Home Owners Association. Many neighborhoods with condos, townhomes or even single family houses will have an HOA. The HOA manages the common areas of the designated neighborhood and can even place restrictions or guidelines on property that is visible by the public.

Closing costs: The sum of money that is required to finalize the selling of the property; transferring it from one party to another. This can include appraisal fees, title insurance, real estate taxes, etc.

Seller Financing: The seller acts as the lender and gives the buyer a mortgage.

Contract: A written or verbal agreement between two or more parties.

Bird Dog: A person who finds good investment properties for other real estate investors and receives a payment for their efforts.

Assignment of Contract: Signing a contract to buy a property and then assigning a contract to another party for a fee. To put it in simple terms, this is like taking bird dogging a step farther. You find an investment and sign a contract with the sellers saying that you are willing to buy it. You then sign over the contract to another interested party and they pay you a fee for your efforts. You never have to pay out any money but it takes a lot of time and energy.

Lease Option: A buyer has the option to secure the right to purchase a property in the future by making a down payment along with monthly payments (similar to rent).

Buy and hold: When a person buys a property and instead of immediately selling it, they hold on to it expecting the value of the property to increase. People usually rent out the property when they do this.

Buy and Sell: When a person buys a property for less than fair market value and then turns around and sells it and makes a profit.

Buy, Fix and Sell: When a person buys a property for less than fair market value. They do rehab and repairs than sell the property for fair market value or close to it.

These are just some of the terms you should familiarize yourself with. There are more out there. Start with this list and then move on. You should be stretching yourself and be trying to learn new things every day. The more knowledge you have about the industry, the better off you will be.

Staging a Home

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You can write all the nice things you want to in an ad, but a person’s decision to buy a home all comes down to when they walk through it. When a person is walking to through a home they are picturing themselves living there.

One of the best ways to increase the appeal of home is to stage it. There are always different circumstances when it comes to staging a house; you might have people still living there or not have a lot of resources to go all out. No matter what your situation you have options and ways to get a house ready to show.

These are some general tips for staging no matter what kind of situation you’re in:

  • If you are using your own furniture to stage the house, use new furniture. Don’t put an old stained comforter on the bed.
  • Vacuum all the carpeted floors, sweep all hard floors and mop. You could even have someone come in and shampoo the carpets. Clean floors make a big difference.
  • Wipe down all surfaces such as counters, window sills, etc.
  • Make sure all the light fixtures work. If you need to grab a couple light bulbs, do it. It’s worth it.
  • Open the blinds. Let in some natural light. It makes the house more pleasant.
  • Use plug in air fresheners or spray Febreeze, just do something. Make sure the house smells nice. If there is a bad smell, give yourself enough time to air it out before having people walk through.
  • Make sure all cupboards and closets are empty and clean.
  • Walk through the house and make sure there’s no dust or cobwebs hanging from the ceiling or on the walls.

As I said there are always different circumstances when it comes to staging a home. Here’s a list of 4 different situations you could fall in. (Remember to still do all the things that fall under the “general tips”.)

  1. If you can’t get a hold of any furniture:
  • Try your hardest to get your hands on at least a table or desk and around 3 chairs. This will give you the opportunity to sit down with the people after they walk through the house. You can have them fill out any paperwork you require or just sit down to talk about the house. If you don’t have chairs for them to sit, you have to find a spot on the floor or stand around the kitchen counter. It’s easiest and most comfortable for you to just provide a place to sit down and talk.
  1. If you have access to limited furniture, there are some staple pieces you should bring in:
  • Kitchen table and chairs
  • A couch for the living room. Depending on the size of the room you might want to bring in a coffee table, end table or entertainment center. (Don’t worry about any electronics.)
  • A bed in at least one bedroom. You can also bring in a dresser for the bedroom.
  • Don’t worry if you can’t place decorations all throughout the house, stick with the basics.

 

  1. If you can go all out:
  • Even if you have access to tons of décor and furniture remember to keep it simple. Put the basics in the house.
  • You don’t have to fill every room. Leave some bedrooms open, this lets the potential buyer envision their own furniture and belongings there.
  • If you bring in shelves or bookcases fill them up.
  • As a warning, if you don’t know how to decorate, have someone come in and do it for you. A poorly decorated house can have the opposite effect of what you’re looking for.
  • Bring in some greenery. A few well-placed plants can make the living area look fresh, welcoming and homey.
  1. If someone is still living there:
  • First and foremost you need to talk to the current owners. For now, that is still their home; they live there, try and be accommodating. But don’t be afraid to talk to them about the importance and preparing their house to have someone walk through it. Let them know that when people walk through it, they will be opening all the closets and going through all the bedrooms, everything is game.

If they are hesitant, explain to them that if they want to sell the house, you need to be able to show it.

  • Always set up a time and date and let the current owners know well ahead of time. You could even tell potential buyers that you only show the house on certain days between certain times. This allows the people living there to get the house ready and they know it’s coming up. They can do everything they need to clean up. They can also make plans if they want to go out while you’re there.
  • To make things easier for the people currently living there, you can give them a list of things to clean that will prepare the house for people to walk through. Here’s a few ideas you could give them:
    • Vacuum
    • No dishes in the sink
    • Make the beds
    • Wipe down the bathroom. Focus on the tub, toilet, sink and counters.
    • Clean up any toys, equipment or garbage that might be on the front lawn or porch. Their first look at the house is from the street. Make sure it looks inviting.

Staging a home for clients is necessary in order to sell. It boosts the appeal factor and allows the client to imagine themselves living there. Take advantage of the resources you have and remember that know matter your circumstances, you have options available.

PropTrend Review

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Busy real estate investors are going to love PropTrend. It’s an elegant software package that enable’s investors to identify foreclosures, and even pre-foreclosures, before they ever appear on the MLS (Multiple Listings Service). This is the sort of advance notification that can put an investor ahead of the game, allowing him or her to acquire the right properties at the right price.

We love PropTrend’s ease of use. Users can target the exact type of property they’re looking for at the click of a few buttons by using the refined search options. If a particular investor is interested only in pre-foreclosure properties in Broward County, Florida that were built between 1963 and 1988 where the default amount is between $85,000 and $142,000, the square footage is over 2000, the bedroom count is at least three and there are a minimum of two bathrooms, PropTrend doesn’t merely deliver a complete list of results within seconds – it will also save the search criteria so that the investor can quickly update their search anytime they want at the click of a single button.

As for the results, they give the user access to everything in the public record. In fact, if there is a weakness in PropTrend it’s that the programmers have no way of controlling or updating public records. That’s a county by county function, so in that regard the quality of the results will always be directly related to how well the counties do at updating their information. Fortunately, the vast majority of the counties in the US do a pretty good job of this. For their part, it’s remarkable that PropTrend has been so successful at compiling information from thousands of sources into a single, cohesive program. As we drilled down through the data, we were blown away by how much information PropTrend ultimately contains.

Once we identified search criteria that interested us, we download it into Excel at the click of a button. This isn’t a necessary step, but we like being able to sort our data in a customized order, and even to apply our own formulas to it. This provides the perfect way to do that. The next step, once we identify the handful of properties we’re most interested in, would normally be to go out and visit each of them in person, but using PropTrend we took advantage of the embedded linking into Google Earth first. As a result of seeing both satellite and street views, some of the properties climbed even higher on our priority list, while we also discovered that we weren’t interested in a couple that had previously looked promising. Scratching homes that aren’t going to work off the list before investing a lot of effort saves us a ton of time.

Another very cool function of PropTrend is the ability to locate cash buyers. There are people who are investing big money in real estate in your target markets. Wouldn’t you like to know who they are? These are often the perfect candidates for partnerships. Similar to the foreclosure information, this list is compiled using data from the public records, and it can be custom targeted using advanced search criteria. It can also be downloaded into excel for more complex manipulation and sorting. If doing this resulted in identifying even a single future transaction partner, the minimal effort required would pay for itself many times over.

The bottom line is that PropTrend software enables serious real estate investors to work smarter than they possibly could without such an advanced tool at their disposal. We couldn’t recommend it more highly for investors who are committed to taking their career to the next level.

Shel Silverstein’s Advice

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“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.”  Shel Silverstein

When you’re involved in real estate you will undoubtedly hear stories about financial loss and nightmare investments. It happens. That’s the reality of real estate. But that’s not what happens with every real estate investment. Successes are happening all the time.

If you’re just getting started in the industry you will definitely have to sit through hearing other people’s opinions. They will tell you that you shouldn’t do it; that it’s too hard, too scary or too unpredictable. To those people I say, “Watch me”.

Shel Silverstein is an amazing author. When you read his books it is plain to see that he understands the importance of chasing your dreams no matter what people say or trials come your way. This is true in all aspects of life even real estate ventures.

Anyone who’s ever dipped into real estate knows that it’s not always smooth sailing but the ones who truly want to succeed keep pushing forward because they know it’s worth it. They are willing to take the good with the bad and believe that, as Shel Silverstein says, “Anything can be”.

As with anything you do in life, you will make mistakes, but you can choose if those mistakes beat you down or if you rise above them. Mistakes are a part of life. They happen and you choose what to do about it.

What I love about Shel Silverstein’s advice is that he says “listen”; he doesn’t say ignore what people say. He tells you to listen. Always take into consideration the advice people give. Advice is valuable and you can always take it with a grain of salt, but listen to what others have to say. Learn from the lessons and trials they have been through and then start on your own path.

If we turned around and went the other way every time something got difficult, nothing would ever progress, we would never move forward as individuals or as a society. It’s thanks to people who do hard things that we have smartphones, airplanes and voice activated controls on our AC units. People who aren’t afraid to step up to the plate and do hard things are the ones who make a difference in the world.

You can be one of those people. Real Estate is an ever-changing, always growing industry. There are opportunities to be found. You can be become a success if you have the desire, drive and ambition to make it happen. Real estate is not for the weak.

If you think you can’t do it, then you won’t. You are the one who puts limitations on yourself. You set your standards and limitations. You think you know how much you can expect from yourself. But the truth is, we all have the potential to reach farther than we think we can.

Learn to push yourself. Have goals. Act. Listen to the advice people give you and then move forward.

Once you change your mindset and believe that anything can happen, you will go far. You won’t let trials get in your way, you’ll take advantage of opportunities that come your way and find a way to achieve your dreams.

What is an Assignment of Contract?

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Whether you’re just getting started in real estate or you’ve been in the business a long time, you’ve had those times when you find a great investment, but you don’t have the money to buy it on your own. When that happens, don’t turn down the opportunity because you think there’s no way for you to make any money. It’s times like this that an assignment of contract comes into play.

An assignment of contract is a transfer of a right or obligation of one person to another. For a newbie to the field that might sound confusing, so let’s break it down.

You found a house that looks like it would be a good investment. You approach the seller with an offer and they accept. You have a short period of time here where you can check out the house, think about if this is what you really want or if you want drop it. This period of time is a contract between you and the seller. They can’t sell the house to anyone and you still have the chance to change your mind and back out.

You’ve done your research and you know that the house needs a little work put into it, but once that’s done it could be turned around and sold for more than you put into it. The only problem with the situation is that you’re short on funds. What do you do when this happens?

This is your opportunity to fill out an assignment of contract. One of the first things you learn in the real estate business is that connections are everything. You need to know buyers, sellers, investors, etc. In circumstances like this, you want to reach into your pocket of investors and find one you think would be interested in this property.

Once you’ve told them about it, and they decide they are interested, you can transfer the contract you have with the seller to them. They are now the one buying the property. You have done all the work and you made the deal. In return, the investor pays you. Some people charge anywhere from 3-5% or from $3000-5,000. It depends on you and your investor and how you want things to work out.

By using an assignment of contract, you are still making money on an investment you weren’t able to afford. Before jumping in, you need to know that there are some pros and cons to using this method.

Pros:

You are not closing on the property yourself. You will never appear on public records as having owned the property.

You don’t need to get a loan. You’re not purchasing anything. You’re handing the contract over to someone else and they purchase it.

As long as all 3 parties work together and cooperate, it can be a smooth business transaction.

You get paid in cash. The investor you found to purchase the property pays you in cash. You get your money fast. You don’t have to sit on a property, looking for someone to buy it.

Cons:

Your profit is visible. All parties involved can know how much money you made from the transaction.

You risk being cut out of the deal. If the investor you have lined up isn’t reputable, they might try to go around you. They can hold off until your contract with the buyer expires and then jump in and make the same offer. That way they don’t have to pay you.

Buyers might be hesitant to move forward. If a buyer is not completely sure they want to invest in the property, you might miss the time frame and lose out on the money.

Assignment of contracts aren’t very common. Since there aren’t a lot of people who know about or use this method, some real estate agents might try to portray the transaction in a negative way. Be prepared to answer questions and have all necessary documents filled out. Also make sure you are following the laws and guidelines set by your respective state. Each state varies when it comes to their real estate laws. Know the law and protect yourself.

Creating a Real Estate Sellers List

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In the real estate industry, the more connections you have the better off you will be. It’s through connections that you will find houses to sell and people to sell to.

The more connections you have the more people you will be able to find. But it can become difficult and confusing to keep track of all these people and their information. This is why you need to take advantage of creating a sellers list.

A sellers list is a list of people looking to sell their home immediately. Because of that this list will always be changing and you should be continuously updating and adding to it. These sellers have a special condition or situation that makes them want to sell as soon as possible.

Your responsibility to these sellers is to provide them with a solution. You need to know what’s motivating them, what their situation is and how you can help them get what they want.

Finding Sellers

You can’t just wait for people to come to you. Take an active role in searching out new sellers. There are several methods you can use to find people interested in selling. You can drive through neighborhoods and look for houses for sale or even abandoned or distressed houses.

Take advantage of all online sources such as Craigslist.com and local classified ads.

Ask previous customers, friends, family, coworkers, etc. about anyone they know who is looking to move soon or even in the future.

Advertising

You need to remember that people can’t contact you if they don’t know who you are and what you do. You always need to be getting your name and information out there. Advertise. Advertise. Advertise.

Brand yourself as someone who can help these people find a solution; someone who gets results. You want to make sure that you can help your prospective customers sell their home and still benefit yourself in the end.

You can do this through flyers, direct mail, bandit signs, ghost ads and even vehicle signs.

Starting Your List

You don’t want to risk any opportunities falling through the cracks, so keep track of all your contacts. The best thing to do is to write down all of the seller’s information the first time you contact them. Once you have them on your list you will be able to follow up with them.  Make sure you get their name, home and cell numbers, mailing address and other important personal information.

You also want to find out as much about their house as you can. The more information you have about the house the better prepared you will be to answer questions for interested buyers.

There is also some sensitive information you need to collect. This includes how many mortgages they have and how much they owe on each one, how many payments behind are they, how long have they lived in the home, what their asking price is, etc. In order to get this information, you will have to build rapport with the sellers. It’s private information that most people don’t give out willingly to just anyone.

Follow Up

A key piece of information you need is when they are looking to sell. If they want to sell within the next 1-2 months, you should be in contact with them weekly. If they want to sell within 5-12 months, you only need to contact them once a month.

Remember that you can contact them over the phone, by email or even direct mail. You have several options open to you; just make sure you are taking advantage of your contacting opportunities. Only give them information they would be interested in. Make every encounter productive and effective.

In order to stay organized and keep track of those you have contacted, keep a schedule of follow-ups. Schedule follow-ups weeks, even months in advance so you can be prepared.

Using Your List

You need to make sure you are looking at your list daily. You should always be updating and revising the list. As you do your follow ups, collect information and be active in finding people, this list will help keep you organized so you can make sells. And that’s what it’s all about.

What is a Hard Money Lender?

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One of the most frustrating things in real estate is to find a great property that is exactly the kind of investment you’re looking for and then realizing you don’t have the funds for it. Many people in the industry run into this problem. So, what do you do when you don’t’ have the time or the credit to get a loan? One of your options is to turn to a hard money lender.

A hard money lender can be a person, local business or small lending organization. They lend “real money” when you can’t get it from a bank or other lending institutions. While this may seem like a great idea, you need to know what you’re getting into before you just jump right in.

There are benefits and risks to using a hard money lender. You need to know when to use them and when to back out.

Benefits of a Hard Money Lender

There are several benefits to going through a hard money lender instead of using conventional methods.

  • You work with a person instead of an institution.
  • You get the money faster; it can take less than a week.
  • There is less paperwork when compared to a bank or other financial institution.
  • It is growing in popularity and is widely available.
  • It is good route for fixer-upper homes since many of them don’t qualify for bank loans.

Risks of a Hard Money Lender

So, after reading those benefits, you’re probably thinking, OK, this is great. Why don’t I do this with all my loans? Well, here are the reasons you shouldn’t do that and why you need to be careful when dealing with hard money lenders.

  • Since hard money lenders get to set their own rules and guidelines they often charge 2-10 points on the loan while banks only charge one to two.
  • The interest is higher with these loans.
  • Extensions are difficult to receive.
  • You might get caught up with a loan shark. These are the people who are hoping you fail. They want you to lose the property. Always ask for their credentials and references.

Have an Exit Strategy

This is the key to having a good experience with a hard money lender. You always want to have an exit strategy. You don’t’ want to get stuck with a loan from a hard money lender and no way to get out of it.

When You Should Use a Hard Money Lender

The decision to use a hard money lender should be well thought out. Here are some of the reasons a hard money lender would be a good idea for you:

  • The property would be a quick turnaround but it’s going to be moving fast and you don’t have the time to go all the way through the typical loan process.
  • You can’t get a loan through traditional methods because of your credit or income.
  • You already have a buyer lined up for the property.
  • The property will be an easy sale.
  • You have a quick fix-up job to do that will increase the worth of the property.

Qualifying for a Loan from a Hard Money Lender

When you approach a hard money lender, the process might not be as in depth or difficult as going through a bank, but they still have guidelines. Those guidelines will vary from lender to lender but some things are similar across the board.

  • Present your investment to them. This includes your plans for the property. They need to know whether you are going to sell it immediately, if you have buyer, if you need to make repairs, etc. You should be ready to present them with a detailed plan, not just a list of things you need to do.
  • Be prepared for them to come and visit the property. They might send a representative in their place.
  • If they provide a loan packet, complete it and submit it.

If a hard money lender sounds like the right move for your next investment, then just remember that it’s up to you to meet their regulations and always have an exit strategy.