Commercial Real Estate Insurance

If you have been investing in real estate you know that loan cost can really eat into your profits. If you are a first time real estate investor you might not have much cash to put down on a home. The home equity loan can help solve both of these problems.

When I started to buy my first real estate investment I found out that most lenders charge more for investor loans than for owner occupied homes. I don’t exactly know why investors have to pay more for the same home but they do. I decided I wanted to flip homes and I started to calculate the cost of doing one investor loan. Most of the lenders I talked to wanted to charge closing cost in the thousands and higher interest rates.

I decided that there had to be a better way of funding my flip. After all, why should I pay a few thousand dollars for closing cost and loan cost when I was only holding the property for a few months? I then learned that serious real estate investors use two types of funding for their flips.

I like to use my home equity credit line to fund my flips. The costs of doing a home equity line are only a couple hundred dollars at the most. My line of credit was free. I didn’t have to pay one dime to get my line of credit setup. The interest rate fluctuates and is usually a point higher than the normal thirty year fixed rate. The beauty of the credit line is that I can buy the home for cash and not have to pay loan costs each time I buy a home. Many banks will sell their REO’s at a lower price if you can close fast and pay cash. I did one deal where the bank called me in the afternoon and said if I could close that night they would take seven thousand dollars of the price. If I had to get a new loan I would not get the discount. Having a home equity line of credit is a great way to do deals fast.

The other option for fast money is a hard money loan. Hard money is private money usually allocated for real estate investments. Hard money lenders are charging very high interest rates but provide cash fast for all your deals. Hard money lenders are easy to find. Just find out where your local real estate investment club meets and go to the meeting. You will find many flyers of people who are willing to lend you money today. Read the rest of this entry »

The key word here being “quick”. The only way for investing in real estate for real quick profits is property flipping, or flipping real estate. It does take time and resources to find the right deal . The deals are out there though, foreclosures, seized properties etc being the best places to look, and the person who finds them is the one that will cash in. Few people have the time or resources to find truly under market priced property. Buyers all want a good deal, so you just have to find a “great” deal in which you can give the buyer a “good” deal and still make a nice profit for yourself for your smart work.

The other way is to get a great deal on a dump and fix it up and make your money that way but this is not quick, will require some work and is not what is being talked about here in flipping real estate..

Property flipping is just buying low and selling high. You need to find a property that is at least 20% below market value. You can easily, without ever taking possession of it just flip the contract to your qualified buyer that is looking for what you have found.

What we’re talking about here is reselling or flipping a contract and not the actual piece of property like a house or apartment building. By selling the contract you avoid all settlement expenses such as attorney fees and all the transfer costs that go along with it. This is the quickest way to profit when flipping real estate.

Two ways to flip a deal:

1. After settlement – more expensive

2. Assign the contract before settlement.

The second is the best and most profitable way because you’re not paying any fees that will be involved with the settlement.

You can increase your cash profits by assigning the contract properly. The easiest and most obvious way is to use “and/or assigns” after your own name in the contract. Another way is to prepare a separate addendum and include an assignment clause saying something like “Buyer reserves the right to assign their interest in this contract to any person or entity.” Either method will leave you free to assign the contract to whomever you want. Read the rest of this entry »