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If financing completely went away how would you run your real estate business?
There’s a good chance that financing will be almost impossible in the near future. They are already talking about requiring 30% down. 780+ FICO scores, and that 30 year fixed rate mortgages will go away.
So, the time to learn how to buy and sell with creative financing is NOW. The sooner you perfect this skill the more money you will make— faster.
It has been 3-4 years since I sold a house to someone who got a new loan. Even back then, it was torture to go through the process.
When I buy with seller financing and sell with seller financing it is quick and easy and painless.
Buying without using private lenders or hard money lenders or banks is the IDEAL way to buy real estate.
Many years ago I made the decision that if I could not buy with seller financing, I just would not buy. It has not slowed down my real estate purchases at all.
When you buy with seller financing it also gives you the ability to renegotiate the deal after the deal if necessary – both for your benefit and for the benefit of the seller when they need a little extra cash.
You can also negotiate to buy with seller financing but put in a contingency clause that says you have to find a tenant or buyer before you will close. Then you can sell your option or only close after you find a buyer or tenant.
Get bank financing completely out of your mind and start buying and selling exclusively with seller financing and you’ll discover that your real estate business is SO MUCH easier!!
I have been speaking with a lot of my mortgage broker friends and they are all despondent and depressed.Apparently some bank regulations are kicking in on April 1st.From what they’re telling me, broker compensation from banks such as Bank of America,Wells Fargo, Chase, Citi ect…will be severly curtailed.This,they(brokers) believe will help with the demise of their industry.Looks like the “Government” sponsored crony banks want the consumer to deal directly with them for everything.I will post better details once I can verify the specific regs.
Also, FHA mortgage insurance premiums are jumping from .9% of loan per year to 1.4% of loan per year as of April 15,2011.
As an example $200,000 loan FHA, the premiums currently are approx; $1,800/year or $150/month. it will go up to $2,800/year or $233/month . Keep in mind the premiums used to be .5% or $1,000/yr or $84/mo. Rates may be low but everything else is going up(except incomes and the value of our fiat currency)Banks are also looking for six months mortgage PITI reserves for each property owned.If you are a brand new landlord,no dice !!!They want to see 2 years tax returns showing your rental property income.
The above are reasons enough financing without institutions is the key to success.
Thanks Jackie !!!
Winston Hahne
Winston,
It will be harder and harder to get bank financing for you and for your buyers.
The sooner everyone learns how to switch all their business over the seller financing the better.
On the conference call tonight, Ken Gains talked about how you can work with a note investor to buy all or part of the note at closing when you buy or sell so you or the seller can get the cash needed.
He gave several SPECIFIC ideas about how to find the local “real deal” note buyers ( not to be confused with a note broker who is just a middle man/woman)
AVOID THE BIG NATIONAL COMPANIES BECAUSE THEY WILL DISCOUNT TOOOOOO MUCH!!!
Many CFD members have also been successful at finding people to buy their note at PAR ( face value) with NO DISCOUNT. Where else can they get 7-8-9% on their money!!!???? Surely not in the bank.
On a conference call last year. Bobby Redwine talked about how he approached a guy at the gym and asked how are your investments. When they guy said they stink — it was the perfect opportunity to tell him how he could earn 7-8-9% on his money by buying seller financed notes that Bobby created. They guy was delighted to “get in on the action” and has since told his friends who also buy Bobby’s notes.
You don’t need banks
You don’t need private lenders
You don’t need hard money lenders
When you use the strategies we talked about on the conference call tonight.
Jack’s ebooks — Owner Will Carry and Negotiations are a good place to start.
The ebooks are only $9.95 each and you get instant access. See the store for more details.
In THE DEPOT, Real Estate Profit Secrets, contains several different ways to buy/sell houses
it starts out with wholesale deals but in about lesson 12 I teach you how to buy with seller financing.Listen to the most recent teleseminar with Hank Baltar — i cover some ideas on how to find
seller finance candidates.I’ll discuss it in great detail at the CashFlowDepot convention
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