This is the deal…I am a new Realtor and also looking to enter into the world of Investing…My credit is not as good and my funds are limited…I have access and speak with desperate buyers all day long. I can also get low priced REO’s. I would like to borrow funds, rehab the properties and sell for a higher profit…Is this a good idea? I am running into a lot of investors that cannot assign because there is not a cash buyer and FHA does not work with fixer upper’s. I know there are hard money lenders but how they work I don’t know. Help!! Please, I need some advice on where to start out.
Your business model is a tough one to apply in today’s market. Lenders are tight these days, very tight. And with less than excellent credit, even more so. And for buying junkers and then trying to flip them for profit, more so still. The buyers just aren’t out there.
Hard money lenders are a possibility, buy they have also tightened up their lending standards.
Shop around in your area for a few and ask what they are offering these days. That would be a good place to start.
Another option is private lending as well. This could be an excellent way to get lower interest rates and benefit somebody who is looking to make more than 1-2% on their money in this beautiful market. Alan Cowgill offers a course on this, and I’m sure there is a bunch of others as well. Be sure to research this option thoroughly before you jump right in, because there are certain guidelines that you must adhere to.
Want some advice? Let people know where you are located. I assume it is somewhere in North America. It totally affects our advice out here.
Secondly, review the FHA loan programs, they do deal with fixer uppers.
You don’t need cash or credit to buy real estate…seriously!
If you’re new/inexperienced, don’t try and rehab to learn this business…I’ve seen that one thing be the downfall to many an investor. While I love the show “Flip this House”, keep in mind, that those guys are very experienced and have a team of people that are experienced…the odds go way up when someone’s got experience!
I recommend starting out wholesaling…find a deal, get it locked up, and find a buyer. That, in MY opinion, is the BEST way for a brand 'spankin new person to start learning how to invest in Real Estate with the least amount of risk! You WILL screw up…that’s part of the learning process…you just don’t want to do it by buying a house with a bunch of cash into it and end up overpaying for the property and underestimating for the repairs. That is a recipe for disaster!
I completely agree with you Jason. It’s a bad mix for you. Even if it’s not then have a down market where lenders follow conservative market strategy.
totally, wholesaling the most easiest way to get into RE investing. Start with wholesaling, then learn to hold or rehad but start from where you are not where you want to be.
Great advice everyone please explain how to tie things up and get cash buyers in a timely manner
Private Money is the way to go. That is my goal for 2010 is to start attracting private lenders. I’ve never been fans of the banks, they want an arm and a leg and then some blood for good measure,