Can You Get a Hard Money Loan for Owner Occupied Homes?August 30, 2022
What First-Time Homebuyers Need to Know About Purchasing a Fixer-UpperSeptember 1, 2022
One of the most common excuses investors make is not having enough money. Instead of going out and finding a private hard money lender, they complain about their lack of funds. While excess capital is nice, it is far from a necessity. Many investors get their start without money. What they find is that this allows them to meet more people and develop more contacts. In the end, not having money turns out to be the best thing that happened to their business. It may be difficult to see that if you are just getting started, but a lack of funds is no excuse to not invest in real estate.
If you don’t have hard money, you should focus more on finding deals. By having access to deals, you can find someone to buy them. Your goal at this stage in your career should be to build your business. Since you don’t have the cash to buy deals yourself, you are not in a position of strength. This means you need to find deals and earn a flat fee or a small percentage of the profits. There will not be six-figure rehab profits in this method. You most likely will not see many five-figure deals come your way either, but you are generating money in real estate and – more importantly – building your network. This is more important than closing one deal and then waiting six months for your next one.
To find deals you need to find sellers. Since you are on a budget, you need to think of ways to market without spending much money. Start by calling for sale ads you see on Craigslist, Zillow, and other real estate websites. Every ten calls you make you may end up with one or two homeowners who may be interested in selling. You should also contact any for-sale-by-owner signs or ads that you see. The name of the game with finding deals is to get as many leads as possible. At this stage, the business is a numbers game. You need to put the time in and find deals. Once you find deals, you can find buyers.
Finding buyers is not as difficult as you may think. This stage is easier if you have deals, but even if you don’t, it shouldn’t stop you. You probably know many people who are interested in real estate that is looking for a way in. Between your friends, family, and co-workers alone, you most likely have an investor in the group. Talking about business and finances can be a difficult topic to discuss, but it doesn’t have to be. Start by having an idea in place of how you are going to find deals. Here is where you can validate yourself by having a deal ready to go. Without private hard money, you need to have a plan for generating leads. The more detailed your plan is, the more likely you will find the money you need. If you are serious about the business, you need to reach out to your closest contacts and see if anyone has an interest in real estate investing. The odds are that someone will.
Start by sending your contacts an email stating your real estate intentions. If you send this to 50 people, you should get at least five interesting replies. Many investors are scared or embarrassed to discuss the business at this point because they have not closed any deals. Every successful investor had to get their start somewhere. All it takes is a couple of deals to go from not having cash to having a network and money for a down payment of your own. You need to take the step and reach out to the people closest to you.
Another way to find buyers is to promote yourself on social networks. One post stating that you are looking for an investor partner will surely elicit a few responses. In addition to tapping into your network, you can generate local contacts. There are many local networking clubs and groups that are free to join. Even if you can’t find buyers you will meet people that will help grow your business. You can also find local real estate investment clubs. These meetings will often have dozens of investors who are constantly looking for deals. Find out what deals they have an interest in and what area investors may be looking for. You can also network with fellow investors who may have been in the same situation as you. Listen to the advice they give and see what works for you in your market.
In most markets, you should be able to find private money lenders. These are lenders who do not follow traditional lending guidelines in lending out money. Between your realtor, attorney, and local network, you can surely find someone in your area. They will lend based on the deal, so you need to have a deal or a business plan in place.
Equal Housing Opportunity. This is not a Good Faith Estimate and this is not a Guarantee to lend and should not be considered as such. Costs, rates, estimates and terms can only be determined after completion of a full application. Actual payments will vary based on your individual situation and current rates. APR for loans vary from 7.99 – 29.5% and is based on Credit Score, Down Payment, LTV, Income. Mortgage rates could change daily. To get more accurate and personalized results, please call 623 582 4444 to talk to one of our licensed mortgage experts. Terms and conditions of all loan programs are subject to change without notice. Level 4 Funding LLC, 22601 N 19th Ave Suite 112, Phoenix AZ 85027, 623-582-4444 NMLS 1018071 AZMB 0923961 This e-mail is for the exclusive use of the intended recipients, and may contain privileged and confidential information. If you are not an intended recipient, please notify the sender, delete the e-mail from your computer and do not copy or disclose it to anyone else. Your receipt of this message is not intended to waive any applicable privilege. Neither this e-mail nor any attachment’s establish a client relationship, constitute an electronic signature or provide consent to contract electronically, unless expressly so stated by Dennis Dahlberg RI/CEO, Level 4 Funding LLC, in the body of this e-mail or an attachment. To the extent this message includes any tax or legal advice this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice.
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.