Hard Money Lending: Increasing Your REI Income Streams
Lately "multiple income streams" has been the industry catchphrase. While everyone likes to talk about Multiple Streams of Income, very few people have them.
In actuality, many of them are only working in multiple places drawing pennies here and there but not truly capturing the true meaning of multiple streams of income. Adding hard money lending to your client offerings can help you realize the true meaning of multiple streams of income.
Many real estate investors have just too many non productive irons in the fire. They're bird dogs, landlords, construction foreman and negotiators. And while they may derive income from all of these activities, they're trickles, nothing remotely equivalent to the effort they put in.
To truly have an income stream, the endeavor generating the income needs to be consistent and free-flowing like... well a stream. Once it's started, other than regular tending you shouldn't have dance around like a cat on a hot tin roof.
If your real estate investment business still has you dancing around, it may time to reevaluate and consider products like creating your own hard money loans or originating to change your trickles into streams.
Now, don't get me wrong. I love my business and what I do, but I've learned over my years in this business that it doesn't make any sense to put a lot of time and effort into something whose return will not be proportional to my efforts. So I am always looking to get the greatest return for the least amount of my money, time and effort. It only makes sense.
As a hard money lender the freedom that comes with underwriting your own deals is phenomenal. If you're not familiar with the hard money lending business, attend an online courses, there are many available.
It will open your eyes to a whole new world and you will find new ways to improve your real estate investment strategy. Don't miss the opportunity to change your multiple trickles of income into raging rivers.
Marketing Hard Money Products
Hard money products are an important part of today's real estate environment. Real estate investors and rehabbers seek these types of creative financing sources to fund deals normally shunned by conventional lenders.
Hard money real estate loans are just like conventional loans in the sense that the loan is secured by real estate and the lender usually receives a first or second mortgage against the property. The difference, however, is that these loans are backed by private investors instead of corporations. This results in more streamlined underwriting processes and more flexible standards.
To realize an attractive return and protect the integrity of the investment, private money loans typically employ low loan-to-value ratios to increase the security of the loan. The standard loan to value ratio is usually under 65% of the value of the property securing the loan
For example, are habbers interested in flipping a small residential property valued at $50,000, he would only be eligible to borrow $32,500 as hard money. This provides the lender with some measure of security just in case they have to take the property back.
Next, since hard money loans are made by private parties and no one wants to wait 30 years for the loan to mature to realize a return on their investment; these types of loans are structured to be short-term - usually six to twelve months.
So you may be wondering why anyone would choose private money financing when the entire deal seems structured to benefit the lender? If you've ever been to a bank seeking a loan and almost had to perform circus tricks in order to get approved you already understand why hard money products are so popular.
Real estate investor's understand that the best deal goes to whoever has the cash in hand and since many private money loans can be funded in less than two weeks. One good private lender can be more valuable than two bankers since they can fix and sell that deal and move on quickly to another deal if you're looking for the best bang for your investment buck, consider marketing hard money product to your commercial real estate clients. They'll thank you.
In actuality, many of them are only working in multiple places drawing pennies here and there but not truly capturing the true meaning of multiple streams of income. Adding hard money lending to your client offerings can help you realize the true meaning of multiple streams of income.
Many real estate investors have just too many non productive irons in the fire. They're bird dogs, landlords, construction foreman and negotiators. And while they may derive income from all of these activities, they're trickles, nothing remotely equivalent to the effort they put in.
To truly have an income stream, the endeavor generating the income needs to be consistent and free-flowing like... well a stream. Once it's started, other than regular tending you shouldn't have dance around like a cat on a hot tin roof.
If your real estate investment business still has you dancing around, it may time to reevaluate and consider products like creating your own hard money loans or originating to change your trickles into streams.
Now, don't get me wrong. I love my business and what I do, but I've learned over my years in this business that it doesn't make any sense to put a lot of time and effort into something whose return will not be proportional to my efforts. So I am always looking to get the greatest return for the least amount of my money, time and effort. It only makes sense.
As a hard money lender the freedom that comes with underwriting your own deals is phenomenal. If you're not familiar with the hard money lending business, attend an online courses, there are many available.
It will open your eyes to a whole new world and you will find new ways to improve your real estate investment strategy. Don't miss the opportunity to change your multiple trickles of income into raging rivers.
Marketing Hard Money Products
Hard money products are an important part of today's real estate environment. Real estate investors and rehabbers seek these types of creative financing sources to fund deals normally shunned by conventional lenders.
Hard money real estate loans are just like conventional loans in the sense that the loan is secured by real estate and the lender usually receives a first or second mortgage against the property. The difference, however, is that these loans are backed by private investors instead of corporations. This results in more streamlined underwriting processes and more flexible standards.
To realize an attractive return and protect the integrity of the investment, private money loans typically employ low loan-to-value ratios to increase the security of the loan. The standard loan to value ratio is usually under 65% of the value of the property securing the loan
For example, are habbers interested in flipping a small residential property valued at $50,000, he would only be eligible to borrow $32,500 as hard money. This provides the lender with some measure of security just in case they have to take the property back.
Next, since hard money loans are made by private parties and no one wants to wait 30 years for the loan to mature to realize a return on their investment; these types of loans are structured to be short-term - usually six to twelve months.
So you may be wondering why anyone would choose private money financing when the entire deal seems structured to benefit the lender? If you've ever been to a bank seeking a loan and almost had to perform circus tricks in order to get approved you already understand why hard money products are so popular.
Real estate investor's understand that the best deal goes to whoever has the cash in hand and since many private money loans can be funded in less than two weeks. One good private lender can be more valuable than two bankers since they can fix and sell that deal and move on quickly to another deal if you're looking for the best bang for your investment buck, consider marketing hard money product to your commercial real estate clients. They'll thank you.
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