The last two months have seen an incredible increase in the number of foreclosures that have been filed and the number of actual repossessions that are being followed. Add to this 2 million more foreclosures expected in 2012 and the real problem for most real estate investors is not the lack of available discount housing, but how to finance it.
It’s no secret that mortgage financing has become incredibly difficult to come by these days. In addition to a host of new regulations, banks are still afraid to make loans and are being more cautious than ever about the loans they accept. They want zero risk. Despite a recent surge in activity among subprime stocks, the new rules make it virtually impossible for true subprime loans or exotic mortgages to make a big payback in the short term. So where should real estate investors turn to obtain funds for their investments?
Unfortunately, ‘hard money’ lenders are no longer as easy to work with as they used to be. In addition to tons of equity in a property, they now want to verify credit, income, assets, and require investors to have a proven track record before lending them money. So they still want to charge ridiculously high double-digit rates and points.
Fortunately, a new option has emerged. Transactional financing has been created as the perfect alternative for investors investing in houses. It means no more hoops and much faster settlement funding for shorter cash cycles.
What are the advantages of using transactional financing?
• No appraisal required
• No income verification
• No asset verification
• No job is needed
• Quick closures
• No prepayment penalties
• Less paperwork
Do you think that sounds too good to be true? What’s the trick?
Thousands of savvy real estate investors are using this type of flash financing to fund their deals every week. Although, of course, there is a catch. That is, investors must also have an end buyer who is qualified for a loan or who has the cash to complete the transaction.
This really isn’t that difficult at all, especially since savvy investors know to have a planned exit strategy before buying any property anyway.
These buyers can range from those looking for a new residence or second home to buying and retaining investors who will rehab and rent them. With a little networking and a good internet marketing campaign to attract buyers to your subscription list, you too should be able to build a good-sized potential buyers list much quicker than you think.