In this episode of The James Orr Show, you will find the following:
- First, James reminds listeners that you can find Wednesday’s show, which was about subject to and the due on sale clause, at the Learn To Be Rich website. He also reminds listeners that they can find up to the previous fifty episodes of the show available on iTunes as a podcast.
- The next reminder is for newer listeners to check out the resources for new real estate entrepreneurs, which include dozens of articles, videos, and free downloads.
- After the reminders, James reveals the new Affirmation for the Day. James also talks about a deal he had that related to the affirmation.
- James then goes over a listeners deal, and talks about money that will be needed for repairs and other property maintenance costs. James also talks about how much money the listener will make on the deal. In addition, James discusses the ways he could sell the property.
- Next, James explains why a lot of hard money lenders want deals that are around 70 cents on the dollar.
- James also discusses the advantages of buying houses subject to. Some of the advantages he talks about are tax benefits and limited expenses.
- After discussing the advantages of buying subject to, James goes over using a trust to buy properties subject to, and talks about a common misconception of being able to avoid the due on sale clause with a trust.
- Near the end of the show, James answers some listener questions on subject to deals.
- To close the show, James reminds listeners to join the Private Money Mastermind Group.
If you want to listen to this episode of The James Orr Show, you may download it below, or, you may find this, and many other episodes, on iTunes available as a podcast.
I just had lunch with an friend of mine that is also a real estate investor yesterday and we were discussing finding hard money lenders. It was not too long ago that hard money lenders were everywhere and it was relatively easy to find ones that would do 100% of purchase price and repairs based solely on the property. Today, it is a bit different.
I am going to share with you the slow way and the faster way. First, the slow way: if you go through the phone book, search on the internet and call a hundred plus hard money lenders I think you can still find one that is flexible enough for the right deal.
However, there is a huge shortcut… what if instead of doing all that legwork yourself, you go to your local investor club and call all your investor contacts and ask for recommendations of hard money lenders they’ve used that are still doing that. Don’t have a ton of contacts? Consider using an Absentee Owner list and doing a voice broadcast or postcard to them to get together and network.
Until my next post,
James
P.S. To get access to our extensive training library of over 100 real estate courses plus much more, upgrade to Real Estate Investor Bronze Membership today.
The following article was submitted to me about using hard money lenders (links are for our Real Estate Investor Bronze Members). Personally, I feel there is a limited number of situations where it is appropriate to use hard money.
Hard money lenders provide short-term “Bridge Loans” that provide funds to based on the real estate that is being used for collateral. These companies have much higher interest rates than traditional loans, and there are many other things to understand before getting into these types of loans. Among them are the risks, collateral and market.
There are significant risks to hard money loans. These lenders and investors and not protected from high default rates by credit guidelines. In addition, they do not require income verification, which causes higher default rates. This is another reason that there are higher rates of interest for these loans. Because these loans have higher risks, consumers generally seek them because they cannot secure a typical mortgage due to poor credit or other reasons.
Although hard money lenders usually require the real estate on which the loan is based, it can also include other collateral. One can secure a smaller loan based on a lower “Loan to Value Ratio,” which allows a loan of up to 65% of the property value. Many real estate investors offer additional collateral to secure a larger loan amount, which is known as “Cross Collateralization.” Be sure to balance the money you need with the amount of collateral you are able to put up.
Different hard money lenders serve different geographical areas, from regional to nationwide. You might consider asking your mortgage broker for recommendations. Some lenders are represented by brokers, and some deal directly with applicants. In addition, you should consider other various charges which you might incur such as application fees and prepayment penalties.
If you have decided to apply for a bridge loan, make sure to research your Hard Money Lender. Make sure that you’ve considered all of the risks and decided what collateral you can put up and you’re on your way.
There is a time and place for using hard money lenders. For more information read about the advantages of using hard money loans which covers strategies when it may be appropriate to use hard money.
Until my next post,
James
Sorry to burst your bubble, but there is no secret list of No Money Down Houses, but I can share with you some insights on how to find deals that you can structure with no money down (links are to resources exclusively for our Real Estate Investor Bronze Members).
First, you can find some deals in the Multiple Listing Service (often abbreviated MLS) or through a competent Real Estate Agent or Real Estate Broker. Many, but not all, of these will require great credit and the ability to document income to get anything near financing that involves no money down from you. Of course, with good credit and a flexible seller, you might be able to structure a deal where you provide most of the purchase money with a new loan and the right seller may be willing to carry back some of the down payment.
Second, you can try to find motivated sellers that are much more flexible in how you purchase their properties. A seller that has a property they can no longer afford is much more likely to allow you to purchase the property in such a way that you have to put no money down and can often make payments on their very attractive financing. Spending a little time/resources finding these motivated sellers can prove to be an excellent investment.
Third, using a combination of hard money lenders, private money lenders and flexible owners willing to structure owner financing deals you can find deals both in the MLS and outside that you can buy houses with little or absolutely no money down.
Until my next post,
James
