Have you ever stayed at a hotel that doesn’t have a good elevator experience?

If you have a 400 room hotel, resort, and conference center, and just two working elevators that fit 5 customers, it’s not going to be a good experience.

Your customers will be upset and frustrated. Even if everything else is 5 star worthy. In turn, they will upset your staff. Who will then disappoint you, or leave you scrambling for replacements.

If you’ve ever suffered through an experience like this, there are many literal and metaphorical takeaways for many parts of your real estate investment business and portfolio.

Short Term Thinking = Short Success

Do you only want short term success?

The above is the perfect example of short term thinking that not only makes for a frustrating business that isn’t fun to operate, but which fails soon too. At best it means limping along with thin profit margins until a smarter competitor takes you out of the game.

The elevator example applies to all of your real estate marketing and deal making processes.

You can blast out a million marketing pieces or pile up 1,000 units in your inventory, but if you don’t have the capacity to efficiently handle those leads and deals, most of them will be wasted, along with your company’s reputation.

Are The Stairs Where They Should Be?

If the technology (elevators and automation) aren’t working, then customers will run to the stairs right? Especially in an emergency situation. Well, imagine the stairs aren’t there right next to the elevator, at the end of the hall, with a sign, just as you expect.

In a fire, or business emergency, that would be a literal death trap.

Believe it or not, there is at least one hotel that has made this mistake. Many more real estate businesses are making it by not thinking through acquisitions, or by failing to have phone or human support as a back up when their new technology fails. Which is happening more often than ever as companies try to jump on the automation and AI bandwagon.

In the automotive business this has become so bad, that new regulations are coming to require old school, manual controls, rather than just touchscreens for everything.

Whether you are wholesaling houses, office buildings, or hotels, make sure your business has enough elevators, and it's obvious where the stairs are.

There is a lot of confusion and misinformation out there on the current state and direction of the economy. Still, the bottom line is that selling your houses faster is still better. If not absolutely vital.

How do you do it?

Price It Right The First Time

All properties will sell if they are priced right the first time.

Do not assume that you can just lower your price later and get the same traction. It will likely be ignored by the best buyers. If it attracts anyone a second time, they are going to see you are desperate, and low ball you.

Terms

Selling and selling a house fast is always a balance of price versus terms. In this environment, terms may be even more important.

Including not only seller financing, but accepting lower earnest money deposits, and being open to negotiating other factors in the deal as well.

Incentivize Agents And Referral Partners

Make sure that you are their best paying customer or partner so they prioritize selling your properties above all others.

Further incentivize them with bonuses for selling your properties within a certain time frame.

This can be far more profitable than having to deeply discount your price later. It enables you to optimize profit, and compound your gains into more deals throughout the year, with far less risk.

Pre-Sell Your Properties

The battle is 99% won already if you’ve built a waiting list of buyers in advance.

This way you can wholesale them in hours, and already have a solid exit, before you even buy.

Be Sure That You Are Marketing To The Right Buyers Now

The market is always changing. It has certainly changed a lot this year already. That means your ideal buyers, and most likely buyers have been changing as well.

Marketing has also changed dramatically due to technology and AI.

Be sure you are keeping up and staying ahead.

This may require getting some unbiased external perspective from a professional real estate marketer. You certainly need to reevaluate your marketing strategies and target customers.

This may require embracing new strategies and channels, and revamping your offers, and site content.

Home sales contracts are falling apart at the highest rate since the depths of the COVID lockdowns in 2020.

Why are all of these pending home sales failing? What does that mean for you as an investor? How can you most profitably navigate this phase of the real estate market?

New Record High Number Of Contract Cancellations

According to new data from Redfin, the number of home sales contracts has hit its highest levels in two years. From back in the pit of the lockdowns when nothing was moving.

Both June and July saw increases in contracts being canceled. Nationally, that stands at 16% of all pending deals falling through. With some markets in Nevada and Florida seeing almost 30% of deals failing.

There may be a variety of reasons for this. Including lenders changing their minds after providing loan commitments, as well as rising interest rates which can kick buyers out in the middle of the process.

Buyers may also be canceling if they fear values may come down. If lenders see declining markets it can lead to a spiral in re-appraisals, lower LTVs, and even fewer contracts making it to closing.

Managing This Factor For Real Estate Investors

The number one thing this means for investors is that they need to build in these ratios to their numbers. If you put 10 deals under contract next month, only expect 7 of them may close. Or if your goal is to sell 20 properties a month, you may need at least 30 under contract to hit that goal. Expect this failure rate to increase as well.

One of the best strategies to beat this is to focus on real estate wholesaling. Meaning you don’t close on the buy side until you have it sold. This way you won’t get stuck with properties. Additionally, this strategy enables you to finance your acquisitions using transactional funding that doesn’t rely on appraisals to close.

In order to keep your ratio of contracted to closed deals strong you want to be extra diligent in vetting buyers and their offers before locking into them. Prioritize cash buyers, big down payments, higher credit scores, and faster closings.

You may also build in steeper financial penalties for those buyers that do cancel. For example, larger, non-refundable deposits, to compensate you for your time and potential losses if they cancel the contract.

You can also prevent issues by pricing your deals lower. Instead of pushing the peak of the market, list under market value to give them a better deal, and remove the risk of financing issues.

While newer investors may still be very bullish on growth in the US real estate market, those who lived through 2008 are certainly having some traumatic flashback moments.

There are certainly many, many similarities in the data from the run up to the Great Recession. We also know that a soft landing is almost impossible to pull off. Markets invariably overcorrect before they recover.

This can not just put a huge hole in your savings and capital, but can wreak havoc on income as well. So, if a crash or correction is possible, then how can you save yourself, and continue to make money through it?

The Consequences Can Be Extreme

Failing to act, or even just acting too slowly to changes like these can have serious, and long term consequences.

2008 sent many CEOs and multi-million dollar producing real estate players lining up among hundreds of others begging for minimum wage jobs in restaurants. Many lost their families, and spent a decade or more to build back.

It’s true that a few made it, came through COVID, and are prepped for what's next. Those are the ones most focused on shorting the real estate market right now.

Short Or Long?

There are two choices at this pivotal time in the market. You can play this phase of the cycle short or long.

You can hold for cash flow and until the market rebounds higher. Though rentals may not be as reliable as you hope.

Remember that it may take 10 to 14 years for the market to come back to where it is today. If you don’t want to be holding those assets that long, or risk losing them, then you should be shorting the market. Getting out faster, with the expectations of prices coming down.

If you haven’t already made these adjustments, don’t just go short, you may need to extreme short to get out fast enough. If you haven’t already missed your window of opportunity.

So, what are some of the things that you can do to do this?

Sell Your Home

Preserve that equity and capital by cashing out now. It is better to regret selling and have money in the bank, than regret holding and have nothing. Just like going to Vegas, you’ve got to know when to cash in your chips and step away from the table.

Exit Those Rehabs

This may not be a great time to be fixing up and flipping homes. Don’t finish or begin on any more line items if you don't have to for a certificate of occupancy. Save that cash, sell a little cheaper, and exit.

Exit Rentals

Sell off any rental properties that have peaked for this phase of the cycle. You can buy them back cheaper later, if you want to.

Make Money By Wholesaling

Real estate is still going to be the best way to make money. You just have to play the extreme short. Sell before you buy it, and use 100% leverage by wholesaling properties using transactional funding.

 

As many have been fearing, eviction bans and foreclosure moratoriums could become the new normal. What does that mean for real estate investors?

Despite the real data suggesting that mortgage loan borrowers and renters are performing great, with few defaults, bans and moratoriums have continually been extended. Even despite being ruled unconstitutional.

Current layers of rulings seem to effectively make these bans run into at least 2022.

The Federal Disaster Housing Stability Act of 2021

This one new bill that is being pushed toward becoming legislation could drag out eviction bans and foreclosure moratoriums, and make them much more commonplace.

The bill aims to automatically trigger these bans any time there is a federal disaster declared. FEMA says a disaster can be declared for almost any reason, including storms, floods, fire, high water, etc.

Other talk around this topic raises concerns over what could be called a disaster in this context in the future. Could it be poor tenants getting a flat tire and having to pay for a car repair? What about high rents, the eviction itself, homelessness, or climate change?

How long would those bans run for after an event? It is easy to see how they could run consecutively forever.

Ironically, around 90% of the taxes collected to finance relief funds for renters and landlords have not been paid out. They seem likely to continue to be diverted into other political pet projects instead.

What Permanent Eviction & Foreclosure Bans Mean For Investors

While on one hand it seems unfathomable that this has happened to this extent already, investors need to embrace this possibility. At least that it will frequently be the new status quo. You simply won’t be able to count on evicting or foreclosing.

The first and most obvious step for most investors and real estate businesses is to switch to the wholesaling model. Be in and out and paid. No problem.

Find end investor customers who will be high volume buyers. Flippers continue to do well in this hyper inflation environment. Though there are landlords with a track record through covid lockdowns and recent bans. Keep an eye out for those switching to short term rentals, and other creative options to stay ahead of this, and to keep up their volume long term.

 

Wholesaling is a preferred real estate strategy for a variety of very obvious reasons. Yet, there also some very important benefits both new investors and veterans of other strategies will find make this play irresistible.

You are probably familiar with wholesaling being the low risk, no hammer needed, fast way to get paid in real estate, and enjoy large lump sum gains. Then there are the tax benefits and supersized returns.

However, the benefits don’t stop there. In fact, for wise entrepreneurs and experienced investors the following reasons may be even more vital and urgent drivers to choose wholesaling.

Scale

Wholesaling is not only an easy strategy to scale up, but also down. This can be incredibly important during rotating cycles. Done right, you don’t have to worry about laying people off, defaulting on office or storefront space, or carrying too much overhead.

You can also scale up and down on-demand, whenever you like. Do more when you want to boost your income, and scale down when you just feel like taking it easy.

Vacation Time

Landlords never get the luxury of vacations. Rehabbers certainly can’t afford to take time off in the middle of a project. They aren’t even getting nights and weekends off. As a wholesaler you can choose to hit pause any time you want. You can pause your offers, and take a long weekend staycation. Or pause for two weeks and go to Hawaii with the family. All without really putting much of a dent in your income.

No People, No Property Management

You can certainly hire a small army of remote staff to really scale your wholesaling business. Though you can also make some pretty good money doing it by yourself. You don’t have to be recruiting and managing a lot of people. You don’t have to deal with all of the headaches of property management or have to step in when they let you down.

Never Be Worried About The Market

Almost everybody is concerned about the market and where it is headed next. It is stressful, and 90% of the time leads to bad decisions. Wholesalers don’t have to worry about that. They are always in and out and paid before anything changes on them. When things are ugly out there, the deals get even better and more plentiful. When the market is on fire and accelerating fast it is easy.

Easy 100% Financing

Sure, there may be ways to get really creative with the paperwork and deal structuring and blending funding options to finance buy and hold rentals and fix and flips with no money down. Though it will always take a lot more work and energy, and is never guaranteed to close. In contrast wholesalers can finance 100% of their purchases with the easiest financing available. Even with no appraisals or credit checks.

 

So, are you wholesaling yet?

 

Looking for more deal flow?

It’s competitive out there. Some investors may want to expand the property types they are flipping and wholesaling to maintain their volume and incomes and to grow while the market is ripe.

If you aren’t already, consider these types of properties…

Rental Condos

The president has now extended the national eviction moratorium until the beginning of April 2021. NY has already stretched that out until May. Even without any further extensions it could be years before many landlords can expect to evict occupants.

That doesn’t mean that there aren’t legal ways to get them to move, or start getting income coming back in. It just may be beyond what most landlords want to deal with.

You can flip these units to other investors willing to put in the extra work. Or help vacate them and resell them to retail buyers or convert them into short term vacation rentals.

Suburban Single Family Homes

There has been a rush to the suburbs and rural areas over the past year. It makes long term sense for many buyers. Though there will be plenty who realize it just isn’t for them. They will find it too quiet and boring or too wild. As they move back to the city, especially as lockdowns fade, expect to be able to flip these deals that motivated sellers are eager to get rid of.

Vacant Land

There are many reasons land is in demand now. Some want to acquire neighboring properties to retain their privacy and expand their space. Others want to build new homes or have their own getaways where they can park RVs. Some are looking at the long term and are happy sitting on land indefinitely. Meanwhile many realize they have extra land they never use and which is costing them money to hold every month, and could use the cash.

Commercial Real Estate

While many are finding a hard time envisioning a future in which office or retail makes sense at all, some big developers are bullishly pushing ahead with building big projects and hoping tenants come back. In other cases redevelopers are converting these buildings to warehouses, distribution centers, or more residential units. It is another space in which there are lots of motivated sellers, and the potential for big gains on the flip side.

 

How risky is real estate investing really?

Investing in real estate is often promoted as a super low or zero risk business or investment. All with many great benefits. Yet, many would be investors get stuck on the sidelines, worrying about risk. It paralyzes them into inaction.

So, what are the real risks? How can you eliminate and minimize them?

What’s The Real Risk?

The truth is that there is no such thing as a 110% risk free investment. They don’t exist. Just like there is no guarantee you won’t slip and fall getting out of the bed in the morning, or a plane won’t crash through your roof and get you in bed in a freak accident if you don’t get out of bed each day.

In real estate there is a risk that property values will fluctuate, that malicious tenants and employees will try to sue you, that scammers will sue you for your website features, that tenants won’t pay, or even there could be an earthquake, wildfire or global pandemic virus that prevents you from collecting rents.

However, small the chances, these are potential risks. The most important question that investors should be asking is whether the risks outweigh the rewards or vice versa? Or even more critical, does failing to invest in real estate bring even more risk than doing it?

What if you don’t invest in real estate? What if the money under your mattress gets stolen or is devalued due to inflation? What if your own home catches fire and burns down? What if your bank goes bankrupt or leaks your information and you lose all the money in your checking and savings accounts? These may actually be more serious risks than investing in real estate.

What if none of those things happen, but you one day simply can’t work anymore or are laid off, and don’t have enough money for you and your family for 30 years of retirement? All because you didn’t invest in real estate.

When you dig in. what’s really scary is NOT doing it.

Ways To Reduce Risk When Investing In Real Estate

It seems far less risky to take action and invest in real estate. Yet, it would be foolish to completely ignore the potential risks either. Fortunately, there are several ways to minimize these risks, and boost your upside potential.

The top risks of investing in real estate seem to fall into these buckets:

• Falling values of properties you are holding onto

• In ability to collect consistent rents on properties you are holding long term

• Malicious business and personal injury lawsuits

• Exposure to losing any money you have tied up in properties

 

Here’s how to crush that risk…

Get Insurance

Insurance can help defend and against direct loss and damages to properties, as well as potential lawsuits.

Use Financial Leverage

If you don’t have any of your own money tied up in a property, then you can’t lose it. If you pay all cash for a property and sit on it, you are a target for lawsuits. So, what if you were able to use other people’s money to fund 100% of your investments? You’d have nothing to lose and everything to gain. That’s exactly what Best Transaction Funding does for you.

Secure Your Profits & Exit In Advance

The smartest, wealthiest and most successful investors don’t put out a penny unless they know they have a dollar coming in. They don’t buy inventory unless it is already presold. You can do the same thing with real estate through wholesaling and reverse wholesaling too. Find the end buyers, use transactional funding to finance the deal, and you are in, out and paid right away. You know you are going to profit before you buy a property, or spend an hour looking for one.

 

The coronavirus is here. How will you ensure your real estate business survives and thrives in the days ahead?

Spreading panic isn’t helpful to anyone. Yet, it is wise to stay informed and ready. The CDC has taken the bold move to warn that the coronavirus is likely to begin spreading through America on a local community basis. San Francisco has already declared a state of emergency That could begin affecting daily life and routines.

Preparation Is Key

Like any natural disaster, terror threat or economic downturn, it’s all about being prepared. Prepare for the worst, hope for the best and you’ll be much better off.

Rushing to build a great real estate business is fun. Yet, it is equally important to protect your gains. At least if you don’t want to have to start over from scratch again.

Have plans to keep your business going and revenue coming in, no matter what happens.

Make plans early, and be sure all of your teams, family, vendors and clients know what the procedures are.

Coronavirus: The Potential Side Effects

The number one responsibility of real estate business owners is really to make sure the business can keep on running. If you don’t, how long can you survive without any money coming in? What will the impact be on all of those around you?

The most obvious impact is you or your staff and loved ones getting sick. That means not being able to work. With no symptoms for 14 days, it is impossible for you or others to tell if they are infected until you’ve got it and spread it to all of those you interact with.

Other challenges could include travel restrictions, quarantines, contaminated properties, lack of desire to interact in person, and declining access to basics like groceries and medicine, as they are facing in other countries.

Then there are the financial challenges for all of the others who are not prepared. School and business closures could create significant financial challenges for homeowners, partners, tenants and others.

Ensuring Business Continuity: What To Do Now

Have A Good Online Business:

Make sure your website and online assets can handle all of your business over the internet remotely. Be sure you can flip, wholesale, manage teams, collect payments and complete real estate closings online.

Staffing:

Recruit extra staff to be on call now. Stay ahead of needs in case of sickness. For example, creating your marketing materials six months out, not at the last minute.

Protecting Others:

Disinfecting properties to give others confidence, keep teams, tenants, and buyers healthy and performing just seems like a smart move.

See the Opportunities:

Be ready to step in and help those struggling with strong and fair offers for their homes and properties.

 

2020 is looking like another fantastic year for most real estate investors. If you have even bigger goals for deal volume and profits this year, here are the financing options that can help you achieve them.

1. Transactional Funding

Wholesaling is about speed and volume. Conventional mortgages and types of funding just don’t work when you need to go fast. Yet, with the right leverage, you can be working a virtually infinite number of deals at the same time, skyrocket your cash on cash ROI, and lower your risk at the same time.

Transactional funding is the optimal solution for this. Get 100% financing for your deals, without any of the hassle of other funding channels.

2. VA Home Loans

While many real estate wholesalers focus on flipping to other investors, selling retail has huge advantages in this market too. You can get a lot more for your properties. A recent change in mortgage lending could really help open up this opportunity even more.

VA home loans have been great for veterans and their families. They provide 100% financing with no down payment, and the ability to financing in closing costs. All with pretty lenient underwriting.

Finally, the VA has just removed their loan limits. That means no cap on how much veterans can finance on 1-4 unit properties. So, they can be used for 100% financing on small multifamily properties for $1M and up. This will also help many veterans start getting into real estate investing.

3. Personal Loans

Many wholesale properties are so cheap that the problem is no end buyers can find a mortgage loan small enough to finance them. Banks don’t want to do mortgages that small. Though they might be just out of range for an all cash purchase.

Fortunately, many banks, lenders and credit unions are being very aggressive with unsecured personal loans. In many cases buyers can go get a $20,000 or $40,000 or more personal loan and pay cash for a property.

4. Business Lines Of Credit

If you are wholesaling to other investors who have a lot of their capital tied up in other deals, you might want to let them know about merchant cash advances and working capital loans. If they’ve been doing business and flowing money through their accounts, they could get tens of thousands of dollars or over $100k to act as a cash buyer.

The more you help your end buyers get financed, the more deals you can sell, and the more of an indispensable partner you become.

 

These companies could have the power to change the real estate industry.

For better or worse, these companies could be shaking things up in the real estate market. Know who they are, how they can help, and the risks they can bring.

1. Zillow

Zillow is a big beast. They’ve been one of the most controversial companies and websites in the real estate market since they launched their horrible flawed Zestimates. Now they’ve bought a mortgage lender, are trying to take over renting and property management, and are now trying their own hand at flipping houses with Zillow Offers. They say they plan to buy 5,000 houses a month. Or at least use this as a powerful lead generation tool to feed leads to their agents.

Aside from manipulating values, the biggest risk Zillow represents is if it fails. They already report they are losing over $45M every three months on Zillow Offers.

2. Opendoor

Opendoor is one of those new giant iBuyers or online wholesalers. They are armed with hundreds of millions of dollars in venture capital and have forged a partnership with real estate brokerage Redfin. Just like OfferPad has done with Keller Williams. They aren’t buying everywhere, or every type of property. It’s a great example of what you can do as an individual wholesaler when you have unlimited funds to buy and flip fast. You can do that using Best Transaction Funding to finance your deals. Again, the real risk here isn’t the competition, it is if they aren’t buying at the right numbers and fail and turn off Wall Street and the big funds behind them.

3. WeWork

WeWork is a great example of what’s possible in terms of going big, and also how to fail hard by overstretching and having an unsustainable business model. Worth close to $50B a few weeks ago, the office giant’s valuation has just been revised down by about 75%, to less than the $12B they’ve borrowed.

4. Zurixx

You may not have heard of them, but Zurixx is behind the education programs recently promoted by HGTV star Tarek El Moussa. They just got hit with an FTC investigation and order to stop due to being misleading, and charging high fees for training that may not produce the promised results. That could end up shaking up the real estate guru space. More notable personalities in this side of the industry are going to have to find new ways to market if they are going to stay in business.

5. Google

For real estate investors who are relying on PPC ads and SEO, Google has all the power to shut the flow of business off overnight or hike the costs of lead generation. The same goes for Facebook. Be very careful about betting everything on third party platforms.

6. Amazon

Amazon has been looking for its angle to take over the real estate market for a long time. It may have already found that in selling homes online.

7. Haus.me

Haus has created a whole new generation of houses. They can withstand earthquakes and hurricanes, and are reportedly even zombie proof. They produce zero carbon emissions, can run completely off the grid, and you can take them with you when you want to move. They are also highly autonomous and packed with new smart home tech. It could completely change what we expect from housing.

 

Wholesaling just seems to be getting hotter and hotter. There are a lot of educators promoting virtual wholesaling, and droves of new investors seem to be taking to it. Some are making $100k a month. Others are still spinning their wheels and trying to make those first dollars.

No matter what scale you are operating at, here are some of the most frequent mistakes wholesalers are making now, and how to beat them to really get deals done, put more dollars in the bank and keep things flowing smoothly.

Taking the Long Route

There are so many marketing funnel and channel ideas for trying to get leads, find sellers and push out to buyers and raise money today. Some are great. Most are just really long detours and excuses not to just pick up your phone and do some prospecting and make some offers. Make money, then you can get fancy.

Follow Up Fails

The number one plague on the real estate industry today is lack of follow up. Realtors and wholesalers are getting plenty of inbound leads, even without a big investment or beautiful materials. They waste the majority of these by not following up. Sellers and buyers and lenders shouldn’t have to follow up with you. If you want the money, deals and sale, you’ve got to follow up relentlessly and fast. If you can’t respond to leads in the first all important 5 minutes, then you need to hire some kind of help.

Not Considering Other Exit Options

Finding cash buyers is great. There may still be many out there. Best Transaction Funding would love to fund your back to back closings on these deals. Though if you are getting a lot of other types of offers, don’t just waste the opportunities. Every lead should be treated like gold. Respond well. If they aren’t a fit for this deal, put them in your database for upcoming deals. If you are getting a lot of buyers wanting seller financing, maybe it’s worth taking some of those. Don’t get stuck in your model. Be flexible.

Not Analyzing Pricing Well

Whether it is greed or being out of touch, many resellers just seem to be asking for a lot today. They aren’t doing the math as a wholesaler, and what it will take for an other investor to acquire, renovate and exit that deal. Some ‘wholesale’ deals are being priced like new construction. Think about it. If someone can build a brand new place on a similar lot for what you are asking for a beat up rehab project, why would they? Especially if you are demanding all cash?

Not Knowing What You Are Selling

It is completely possible to flip houses sight unseen. Yet, if you don’t know the condition or what’s on title, you can’t price it right or pass that info on to your end buyer to make a good decision or offer. The more you can get a handle on repairs and the equity, the better you can present to your buyers, de-risk it for them and streamline  the resale transaction. All with far less likelihood of the deal blowing up.

Getting Cut Out of Deals

Unfortunately, there are a lot of greedy people out there. Both Realtors and investors keep finding buyers and sellers try to cut them out. Wholesalers are especially vulnerable when trying to do assignments or simultaneously closing using the buyer’s funds. Instead, do two transactions using transactional funding, so you become the owner and are the only path for them to get the house.

Not Empowering Your Team

If you are hiring people, and then micromanaging and spending more time managing than it took to do the job in the first place, just do it yourself. Save the time and money. Of course, it is far smarter to hire help and then get out of their way so they can do what they are the experts at.

Steve Jobs said. “It doesn't make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”

 

Wholesaling is pitched as one of the easiest and fastest ways to get into real estate and get paid. Finding deals and finding buyers in this market may not be too difficult. If the price is right, the property will sell. That just leaves the question of how you’ll fund your deals.

More and more investors are finding that sellers and buyers try to cut them out when they attempt to assign contracts, and aren’t closing on the buy side first. Here are five ways to finance your wholesale deals, and some of the pros and cons of each options.

Cash

You can use your own cash to finance deals like this. It can be extra cash on hand, retirement savings in a self-directed IRA, etc. It may be the cheapest option. The downsides of this are you’ll never be able to fulfill your full potential. You will be limited on the number of deals you can do at a time. You are bearing all of the risk or getting stuck with a deal. You won’t be maximizing your full ROI potential by using leverage.

Conventional Mortgages

If you’ve got awesome credit, plenty of assets, and a perfect income profile, there’s a chance you can walk into a bank or mortgage lender and get a conventional type loan. The problem is that few will close fast enough for you. It may take 30 to 60 days to close. Far more than the 1-2 weeks most sellers will expect. You are also going to need appraisals and maybe an inspection. Repairs and low loan amounts can quickly trample your loan application. Not to mention the high closing costs.

Hard Money Loans

Hard money is great for house flippers and distressed properties. It’s typically fast. Though you’ll still need skin in the game with your own cash, and likely the money on hand to prove you can afford the rehab. It’s expensive money, though that may not matter too much if you are in and out before the first payment is due.

Private Money

Private money is highly desired by real estate investors. True private money (not hard money lenders advertising ‘private money’) can offer great fluidity and flexibility in funding deals on the fly and on great terms. Once you start doing great at wholesaling, you’ll eventually find these people wanting to fund you and put their money to work to share in your profits. Just be wary of taking the long detours and getting distracted with trying to raise money instead of getting right into investing.

Partners

There are many potential benefits of partnering up with others, especially if they are bringing all the capital. Just be sure you get everything in contracts and writing to minimize the damage of future partnership breakups. Do the math carefully on your returns and how that compares to other options. Having a partner who will fund 100% of your deal is great. Though, if you’re giving up 50% of your profits, that may be far more expensive and less profitable for you than financing it.

Transactional Funding

Transactional funding provides 100% financing for real estate wholesalers. All with no appraisals or any of the underwriting hoops you’ll find with hard money lenders or conventional bank loans. It can be a lot cheaper than you think too. While giving you the ability to close in just a few days. That means you’ll be able to beat the competition with better offers, and keep all the profit.

Get in touch with Best Transaction Funding today and get your free proof of funds letter to make your next offer...

 

Is real estate investing a race of speed, or is it more like an endurance race or decathlon?

You can approach real estate investing any way you like. Some may be inclined to rush and be highly motivated to go all in at full speed. Others take a very slow and long approach. Which works best? What are the pros and cons of these mindsets? What’s it really like?

The Sprint

Taking big and swift action is required if you want big and quick results. If you are throwing yourself all in to wholesaling houses or fixing and flipping and need it to put money back in your pocket by the end of the month, you had better hustle. You can do it, but you’ll have to go flat out, make decisions quickly and make no excuses.

Just 30 days could change your life. Yet, there are potential pitfalls and downsides of only being a sprinter.

It can make it tempting to take shortcuts and make unsustainable moves. Just like those marathon cheaters taking an uber to the finish line or Lance Armstrong in cycling. This is even true for those in buy and hold real estate and multifamily. These are the people trying to sprint, when they are really in a marathon.

You may burnout by going too fast. Or you might wake up and find you’ve smashed your 5 year goals in just 2 years, but didn’t make a plan for how to maintain it after that.

The Marathon

Others see real estate as a marathon. A really, really long race. One which requires a lot of stamina and endurance, patience and a lot of repetitive tasks.

If you end up living more than 5 years, then real estate really is a marathon. Quick results are great and possible, but once you are in the lead, you need to stay there. You don’t want to burn out after the first mile and throw in the towel. Yet, if you get too comfortable in the lead, there are plenty of people behind you looking to pass you.

There are some ways that real estate investing is not like a marathon at all. It’s not just one smooth track. Opportunities are always changing with the market and economy and other trends. There may be times to sprint, slowdown and pace yourself and to pause or leap.

The Decathlon of Real Estate

In reality real estate investing is probably much more like a decathlon or Spartan race. Days of both sprinting and long distance, as well as specialized skills in jumping, throwing and pole vaulting.

It requires many different skills. You’ve got to find the deals, fund the deals, flip the deals, and train in between.

To master it for quick progress and staying a champ for the long term, you’ve got to know when to do what, and where to focus. It’s smart to choose what to excel in, and it takes wisdom to know when to sprint or pace yourself.

If you live in a very seasonal real estate market this should be pretty obvious. Though in addition to larger real estate cycles, every year can bring its time to sprint, and cool down.

One of those coming up is back to school season when families are hyper motivated to sell and buy and move before the new school year starts. Ready, set, go...

 

Underwater mortgages and negative equity homes are back again. Just how bad is it? What does it mean for real estate investors?

The latest statistics from ATTOM Data show a resurgence in underwater homes in 2019. ATTOM’s latest report measures this metric by the number of properties that has serious negative equity, and owe at least 125% of their home’s value on mortgages.

Seriously Underwater

There were at least 5.2M homes in this situation as of Q2 2019. That’s about as many homes that sell in an entire year in a strong market.

This does not count all of those who just have zero equity or too little equity for a conventional sale using a Realtor. If you added in, all those that owe 90% to 124% of their property value on mortgages this number could be dramatically higher. It will get higher every day as prices float down again.

Then if you count other debt and liens that may mean owners have even less equity, that number may already be at crisis level. Think past due property taxes and code violation fines.

Some zip codes are already seeing negative equity properties return to 2012 levels, with upwards of 20% of properties in trouble. In at least 32 zip codes more than half of properties are seriously underwater.

Equity Rich Properties

The good news is that there is a large number of equity rich properties out there as well. These are those with a loan to value of 50% or less.

While this number is shrinking, and has been since 2017, nationally, 25% of homes were considered equity rich in Q1 2019. Most of them being in California.

What it Means for Real Estate Investors

While there do still seem to be speculative buyers willing to pay 150% of the real value out there, many more property owners are finding themselves stuck. They simply can’t sell conventionally. It’s going to take seller financing and creative financing to make it happen.

The great news is that all of these equity rich properties are really ripe for wholesaling. Those equity cushions will shrink if the market keeps contracting, but wholesalers who act fast still have plenty of potential properties to pick from.

 

 

Still grappling with taking the leap into real estate wholesaling? Here’s how to do it, and why you shouldn’t waste another minute…

Real Estate Wholesaling

Wholesaling is still one of the best ways to get started in real estate. It’s considered the lowest risk method, and fastest for generating large profits. As a wholesaler you get to be your own boss, build your own company, set your own schedule and enjoy the free time you crave, and can make more in a month than most people make in a year.

Of course, despite all of those benefits, many individuals still struggle with actually taking action and getting started.

Option One: Start Slow & De-Risk as You Go

Even though this is likely the lowest risk form of real estate investing and business to get into, new things can be scary. You never know everything about a new venture before going in. It is usually self-doubt and the unknown which really holds people back.

One way to overcome this is to begin with small, but swift steps. Take the risk out, one day at a time. Prove to yourself you can begin building a buyers list. Prove that you can find deals out there. Line up your transactional funding. Outsource anything you need help with if you are still working another job. Close that first deal, and then go all in.

This is the slower path, but one which may be more comfortable to you. Just note that a lot of people who have done it this way ultimately wish they would have gone faster from the beginning.

Option Two: Just Go All-In Now

The other choice is to just jump in with both feet. Quit whatever else you are doing, stop holding yourself back and get the most benefit from wholesaling sooner.

This way you have to make it work. You’ll enjoy more focus. You’ll have more time to dedicate and get faster results.

Stop dreaming. Just start doing.

Why it Shouldn’t Take Much Courage to Get Started

The truth is that not doing this is much, much riskier. Even if you are currently in a job you like with a good paycheck, that’s risky. Your entire future is riding on someone else. A lot of other people probably. You’ll never really be free. You’ll have to live with taking a pass on your full potential and living the best life you could have.

You really have everything to gain from getting started in real estate wholesaling. More time, money and opportunity to help others. You can get all the cash you need to find deals with Best Transaction Funding. If you go all-in, then neither time nor money is a hurdle. You can learn everything else as you go.

 

There’s no question that the real estate market is changing. They say there are always opportunities. So, where are they now?

These four property types are becoming ripe for real estate wholesalers, and could offer the profit margins and volume investors need to keep up their cash flow in the year ahead.

1. New Construction Condos

There has been a speculative building spree brewing in some hot cities for several years. It’s now apparent that is catching up with some builders who have mountains of inventory they’ve been unable to offload. Even despite offering upgrades or paying association dues for years. In many cases their lenders simply won’t allow them to reduce public asking prices. However, they may be bought off market in bulk at deep discounts. Developers want to cash out of projects and focus on their next move. If you can score deep enough discounts, you can have beautiful product, and still move them at a bargain price that is attractive to end buyers.

2. Multifamily Apartments

Many single family home investors have been trying to step up to apartments. Yet, many are still struggling with their funnels and finding the deals. By building relationships, and with better marketing wholesalers can serve up these deals on a platter. In some cases, whole buildings designed as condos could be ripe for reverse conversions for those seeking buy and hold deals for cash flow.

3. Rural Homes

There are disadvantages of going too rural. Smaller buyer pools is a good example. Yet, with prices so high in urban centers, and little house for the money, expect more buyers and landlords to be hunting for properties on the outer suburbs. There is less competition for now, and the cheap prices could produce big spreads.

4. Ultra Luxury Homes

A new home sales price record was just set for over $230M. Other listings could push that record to $500M and even $1B before long. Even though there may be some concerns over a new recession, the ultra wealthy are normally unfazed. They can lose a billion and still be doing very well. In fact, softness in other markets can drive them to invest more in brick and mortar assets.

What will you wholesale this year?

 

What types of properties are ripe for real estate wholesaling now?

Whether you are just looking to scale and diversify what you are doing now, or you are just now looking to begin wholesaling real estate to diversify from other strategies and income sources, these five property types are worth exploring.

1. Homeowners with Equity

More and more homeowners are becoming ‘distressed’ as they feel more uncertainty about the market. Most now have more equity than they’ve had in years. No one wants to lose that. They don’t want to see all of those tens and hundreds of thousands of dollars evaporated by a declining market. Yet, there are others who still want to buy and are not worried by any temporary fluctuations in home values. Get in the middle here. Help equity rich homeowners cash out their equity and secure those gains, and connect the property to another buyer.

2. Underperforming Multifamily Apartments

Multifamily apartments have become more and more in demand. More buy and hold investors have stepped up to enjoy the economies of scale these properties provide. Yet, there are many small and medium sized apartment buildings which remain underperforming. They may be ready for renovations, have been managed poorly, or just having aging owners who don’t want to deal with it any more. Add value as the connector.

3. Retail Property with Higher Vacancy Rates

We’ve seen a huge correction in the retail property sector over the past couple of years. There has been a big restructuring. That has left many retail units empty. Yet, there are other retailers who are ambitious on growth. They need more floor space, more locations, and they have the capital to expand. Some will even be potential buyers of their own real estate. Bailout landlords with these vacancies and put them in the hands of better managers.

4. Land

From raw acreage to infill lots, there are plenty of opportunities to flip land deals. With land and new construction still being the more profitable route to profits in many areas, expect there to be more demand in this sector over the next few years.

5. Builder Close-Out Deals

Builders in prime areas like Manhattan are noticeably struggling with over supply. They’ve hit the peak of the market, and would love to cash out and finalize some of their condo projects and new home communities. With the right marketing to the right audience, these deals can still be very attractive to buyers. Especially international investors and buyers. Builders may be willing to negotiate a range of incentives from upgrades to discounts, and deeper discounts for bulk purchases that help them exit a project.

Whatever you’re wholesaling, Best Transaction Funding is here to help you fund your deals...

 

How can property wholesalers beat all of the deafening marketing noise out there today in order to close on more acquisitions and flips?

The amount of advertising noise out there is at epic proportions today. It’s coming from constantly blaring screens, in vehicles, on signs, and is being beamed into our palms and on our wrists. Soon smart glasses will pop up ads literally right in front of our eyeballs so we can’t ignore them. That can make it tougher and tougher (and more expensive) to stand out, get noticed and compete. Even if you repeat everything you did last year, your results may be way down due to the rise in noise. So, whether you are a real estate education guru or brand new investor focusing on wholesaling, how do you break through it?

Make it Personal

The tendency today is for marketers to just blast, blast, blast messages out. There is far less focus on handling the incoming. Too many drop the ball on replying and following up with leads in those most valuable first five minutes. It’s not just hot leads either, but the growing amount of interactions that are happening online. Maybe you can’t compete on content and volume on social, but you can do better at really engaging and strengthening personal ties. If you tried to compliment someone or speak to them in the street and they ignored you, would you buy from them? How would you relay your feelings about them to others? Yet, real estate investors and brands frequently fail to respond to likes and comments on Facebook, Instagram and other social platforms. It’s no different. Spend less time firing at them, and more time in real conversations.

Make it Real

So much is happening virtually online. Yet, that is only making real life engagement, relationships and activities scarcer. Stand out by getting together in person and building real connections whenever possible.

Make the Most Noise

If the above doesn’t appeal to you, then at least make the most noise. It may be easier and more affordable than you think. At least if you use the data available and target well. You can achieve great market saturation with a dense and targeted multimedia approach. You can hit them with mail, email, Facebook ads, signs, and be there every time they search the internet.

Make the Most of Your Marketing Team

Many businesses are still struggling to get a handle on the new remote working environment. You can now affordably recruit the top talent in the world and get just what you need from them on an on-demand basis. Yet, so many are still trying to micromanage their operations. That’s like signing Lebron James and then keeping him on the bench. Or insisting he shoot your way if he is ever on the court, even if you’ve never made a half court shot or dunked. Sounds crazy, but that’s what the bulk of brands are doing. They don’t know what they don’t know about the game. They don’t have the level of expertise in the details that their players do. Yet, they wonder why they aren’t scoring more. Find great talent and get out of their way fast so they can clock up the wins for you. You don’t need to dictate how they throw, as long as the data is going up on the scoreboard.

 

 

Tired of the challenges of trying to raise private money, finding good investment property lenders, and juggling funding? Transactional funding could crush all that worry and stress, and make it 100x easy to make money in real estate.

Funding continues to be the biggest challenge in the real estate investment space. From brand new investors looking to get into real estate to already successful rehabbers and landlords, it’s all about the money. There is always a need for more capital to make new acquisitions. No matter how much you start out with, that cash can get tied up pretty quickly.

Unfortunately, the mortgage market really hasn’t caught up. Although new lenders have popped up, funds have been advertising their capital and flowing some through conduits and crowdfunding portals, the underwriting criteria and LTVs and reserve requirements just aren’t on par with demand and investor needs.

Transactional funding and integrating or switching to a wholesale strategy can solve those problems, fast.

Best Transaction Funding offers 100% financing for real estate wholesalers. What’s even better is that this can be done with no income, asset, or employment check. It’s just fast, easy financing you can close with in just days.

It’ll take your ROI to a whole new level. And you can keep pocketing your profits, and using new transactional funding again and again. It takes you from only being able to to a couple deals a month, to many, while ripping open the potential to scale your real estate investments and business.

It’s crazy how many are struggling to get started, grow, and to keep on going, when this capital is readily available for use now. If you’ve been frustrated with your finance flow, or know investors who are; try it out, or recommend it to them...