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Pre-Fab Homes A Holiday Hotspot For Wholesalers?

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on Friday, 15 November 2013 BestTransactionFunding
Are pre-fab homes the newest sweet spot for real estate wholesalers this holiday season?

Prefabricated properties could be one of the hottest trends and biggest profit centers for real estate investors this season. Here’s why…

Pre-fab homes, also known as modular or manufactured homes are trending again, yet are often ignored by many investors due to being misunderstood and the confusing terminology.

Mobile homes are often an ugly four letter word in the real estate and mortgage business and few want to go anywhere near them. The have many issues and lenders commonly won’t even answer inquiries about loaning on them. They are a big risk as they are so easily removed or wiped out by bad weather, and the majority of those in existence are outdated.

However, mobile homes are not the same thing as manufactured housing. Pre-fab means the majority of the construction is done in pieces off site, and then it is all put together like a Lego set on the desired site. This removes tons of construction constraints and objections by permitting authorities. More significantly it means larger profit spreads.

This niche has also been one of Warren Buffett’s favorite and longest running businesses, which is one of few which continued to perform through the crisis.

Lately, this niche has been taken to a whole new level with higher end modular apartment buildings going up in New York and even urban Downtown Seattle. Perhaps even more innovative is a new breed of 100% sustainable hybrid home from Mesocore which has residential uses here in the uses and can double as shelters, medical centers and schools in developing nations or disaster zones like Tacloban in the Philippines.

Conventional lenders like Wells Fargo are catching on to this trend and property type and are providing financing to builders, and no doubt end buyers as well. In many cases these properties could still use a better marketer who knows how to position them and highlight the advantages to end investors and buyers.

This is where property wholesalers can really cash in, especially right now, thanks to the holiday gift rush, year-end bonus season and surge to invest capital to minimize 2013 tax liabilities.

Contact Best Transaction Funding today to ask about flash funding for wholesaling these real estate deals…
Tags: mortgage business, wholesaling real estate, financing, mortgage lender, flash funding
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Is Transactional Funding Only Way to Avoid a Felony When Wholesaling Real Estate?

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on Monday, 29 April 2013 Press Category

Is using transactional funding the only solution for escaping jail when wholesaling real estate today?

Despite single handedly bringing back the housing market and economy real estate investors are now being criminalized for recycling homes and aiding in the revitalization of neighborhoods across the U.S.

Investors around the country have been receiving notices that they are committing felonies when wholesaling homes. Investigators and the feds are picking up on their advertising, while jealous real estate agents, competing investors and even disgruntled home buyers and sellers are turning them in at a higher rate than ever before.

So what’s the problem? Will all investors be regulated into being felons and jailed by 2014?

Not all, but those flipping and wholesaling homes as well as some buy and hold investors could find themselves increasingly regulated and forced to adopt new strategies and business models or face some time behind bars.

For those that haven’t had the pleasure of getting to know the U.S. justice system yet, a felony means long stints in real big boy prison after a nice vacation in the hardcore level of the local county jail. Not a place many want to find themselves.

The main issue surrounds unlicensed real estate sales activity and advertising, both of which are currently under the spotlight of the IRS, FTC and other agencies and attorney generals.

Those marketing homes that they don’t own and have not closed on yet or when involved in chains of marketing for other investors is what is causing the most problems. Obviously this includes the strategy of a massive percentage of wholesalers out there today. So what’s the solution?

Fortunately there are several work-arounds including:

  • Obtaining a real estate license (though this comes with many other risks too)
  • Building a buyers list first, taking pre-orders and not needing to market homes at all
  • Paying cash or using transactional funding for legitimate double closings

Some amateur self-appointed real estate investing ‘gurus’ advise simply getting permission to market before closing as a part of purchase contracts. However, this isn’t a solution by itself. You can put anything on paper but that doesn’t make it legal or protect you in court.

Do get permission to avoid issues, try new ways of marketing and check out transactional lending to fund your deals and achieve higher volume levels when wholesaling homes if you want to stay ahead of the curve and avoid the wrong attention.

Tags: wholesaling real estate, transactional funding
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Why the News Has the Housing Market all Wrong

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on Tuesday, 02 October 2012 BestTransactionFunding

Why is it that the media and some real estate portals seem to have the housing market all wrong, what’s really going on with inventory and the direction of the market and does it even matter for those flipping houses?

Why is the News and Other Real Estate Investors So Out of touch with the Market?

For a start the media often relies on faulted data for its stories and is also clearly influenced by the bias of an array of different motives. On top of this, while national housing statistics present a (really) rough picture of what trends are on a countrywide level they balance out the disparity in some many different markets.

Publicly available inventory is way down in some regions and foreclosures may even be falling in some zip codes, pushing up home prices. In others quite the opposite may still be true and new waves of foreclosures and masses of distressed properties are causing the ‘average’ home price to slide. So what you may be seeing on the street in your market may really be completely different to an investor somewhere else.

However, the real question real estate investors should be asking is…

“Does it even matter?”

Clearly the direction of the market has proven to mean very little to those flipping houses. It may affect buyer confidence but the last 7 years have proven that big money can be made from wholesaling real estate, even in rapidly declining markets.

What about foreclosures? Investors must remember that foreclosures are just one part of inventory. How do you think so many millions were made in the last boom when foreclosures were virtually unheard of and were essentially non-existent?

3 Strategies for Beating the Market

1. Where You Look for Properties

Tight inventory can make it feel tougher but maybe you just aren’t looking at it in the right way? Tight inventory = rapidly appreciating home prices.

2. Diversify

Contemplate how can you get ahead of competition or find other sources of different types of distressed property besides those being foreclosed on for not paying their mortgages.

3. Create Your Own Market

Truly talented and savvy investors know how to create a market for their product, whatever it is.

Tags: investors, foreclosures, flipping houses, wholesaling real estate
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Why Wholesaling Remains King in 2012

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on Wednesday, 22 February 2012 BestTransactionFunding
While a new upward surge in the real estate market may be gradually sweeping the country investors may want to think twice before switching their real estate investment strategies. Wholesaling still remains king and here’s why…
Right now many real estate investors are busy and distracted with trying to become rental specialists, moving into property management and even attempting to promote themselves as real estate gurus. These things are fine and may be a natural expansion for some but they surely don’t promise the fast and fabulous money that wholesaling real estate does. That’s OK, let them stir up frenzy in other channels and keep on flipping properties with less competition. After all, they are going to have to turn to someone for inventory, why not you?
Wholesaling has always meant less risk, at least as close to zero risk as you could ask for. Even if the market is picking up it is on much shakier legs than the last bubble. Better to get in, out and paid and let someone else worry about juggling huge amounts of overhead and ducking malicious lawsuits every month. Plus, eminent domain is making a comeback and the last thing you want is for your nest egg to be condemned and seized so that others can make bigger profits.
Of course there is always the financing issue too. While subprime bonds may be making a comeback too we are probably a long way off from seeing the easy financing of the early 2000s. That is with the exception of transactional funding. Why break your brain, lose more hair and risk your deposits on an underwriter being in a good mood? Keep on wholesaling…
Tags: transactional funding, wholesaling real estate, real estate investment strategies
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