Successfully flipping real estate deals in 2018 relies a lot on finding end buyers with the financial means to purchase properties. The more that flippers and wholesalers can help prospective buyers find and connect with financing, the more deal volume to be done, and the faster they can be flipped.

Here are seven ways your flipper, rental property, and retail buyers can fund their purchases from you this year.

IRAs & 401ks

There is a lot more awareness of the ability to invest in real estate through self-directed retirement accounts today. Others still need to be turned on to the option. Though many more may begin to use these account options as the stock market continues to inflate and stocks become more expensive.

1031 Exchanges

Some US real estate markets appear to have matured, as have some individual investments. By using a 1031 exchange, investors can acquire your deals, while deferring tax liability on their gains.

Private Lending

Investor buyers without enough of their own cash and capital can find that individual private lenders are still the best option for financing. These lenders can be far more aggressive in terms and loan amounts, and are typically far faster and easier to work with.

Hard Money Loans

These loans are great for those who don’t want to deal with the hassles of conventional mortgage loans, or may be buying properties with repair needs that fall outside of conventional underwriting requirements.

Rehab Loans

Whether from investor specific lenders or the FHA 203k loan, there are great funding options for acquiring houses at a discount that need some repairs or updating.

Low Down Payment Loans

While investor loan LTVs have risen to 90% and even 100% in some cases, regular home buyers are also finding more and more low down payment options as well. This ranges from government loan programs like USDA and VA loans, to those offered by mortgage lenders like Flagstar which can be combined with local down payment assistance programs.

Seller Financing

Seller financing is still one of the best ways to ensure fast resales at maximum resale prices. That may be a low down payment large first mortgage, or carrying a second mortgage loan.

 

Why are more investors moving into real estate wholesaling?

There are many ways to invest in real estate. So, why are more investors turning from rehabbing and flipping or rentals to wholesaling houses?

Looming Tax Changes

The coming tax tsunami which has threatened to strip away common tax deductions like mortgage interest and property taxes paid could make it far less attractive and profitable to own rental homes by 2018. Wholesaling houses offers a way to get in and out, with great margins, and virtually zero holding costs.

Bigger Paydays

Not many people are really getting rich on rentals. It can take controlling a lot of property to generate a decent income from rents. You might need 20 average rentals owned free and clear to deliver the same amount of cash in one year, that you can make on a flip deal in one month.

Perfect for the Changing Market

While there is no telling when the market shift will officially be called, it is pretty clear that there are changes happening. No one wants to be left holding the hot potato like back in 2006. Wholesaling is the perfect strategy for both declining markets and rapidly appreciating ones.

Lower Risk, Higher Returns

Compared to being a lender, being in construction, or being a landlord, wholesaling is far less risky. Yet, the returns, especially on a cash on cash basis when using transactional funding, or an annual basis can easily blow away the ROI on rentals or private lending.

It’s Scalable

You can do far more wholesale deals in a month than you can acquire and manage rental units, or renovate houses. It’s also far easier to scale back when you want to go on vacation, are ready to retire, family emergencies arise, or the economy calls for it.

Why do you wholesale?

Have a goal to make more money in 2016? Here are five strategies to make that happen…

1. Do More Real Estate Deals

Increase your deal volume and you should increase your income. Realtor.com predicts 2016 will be an even better year for real estate thanks to a surge in buying and selling activity. Know how many more deals you need to complete to hit your annual income goal. If you’ve tapped out your local market, expand the amount of map you are using.

2. Slash Taxes

Savvy real estate investors know that more gross income doesn’t always led to more net income. Taxes can be a significant part of this equation. You should already have a tax plan for the year. Know when you’ll make specific purchases. Know how much you should plan to max out on real estate education and travel, how much you’ll donate to charity and give to nonprofits, if upgrading your personal home can help, and how much you can contribute to your IRA.

3. Increase Per Deal Net Profit

For those not so eager to increase deal volume, at least increase the net earned per deal. Set the goal now, build it into your numbers. This can be done by increasing your cut or margin on wholesale deals by say 10%, or by finding bigger deals that can deliver more cash per deal.

4. Flip Houses Faster

The faster investors turn deals the less they bleed in holding costs and interest charges, and the less risk that is involved. For those that haven’t been wholesaling 2016 is the year to add it to the mix. For current wholesalers this is the year to really tighten up that timeline and presell deals in advance.

5. Make More on Alternative Investments

Make sure your reserves, emergency fund, and alternative investments are working hard for you too. Don’t let them drag down your total returns for the year. Put that capital into private lending, startup investments, tax free college savings, better paying CDs, and IRAs.

Add up all of the above and even with modest improvements in each area investors can substantially boost their net income in 2016.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.