Here’s the thing about real estate investing: you don’t need millions or even thousands of dollars to start. Don’t even let anyone tell you otherwise. You’ve probably seen those house flipping shows on HGTV where people flip homes with no money down and you probably wondered how on earth someone could do that and if it can actually be done. I have good news for you. It can definitely be done and I will show you how to do it.
Let’s say that you find a great deal on a house–you’ll need to buy it as soon as possible before someone else comes along and buys it! However…you have no money in your pocket. Going to a bank to get a loan will take too long and if you have bad credit (or no credit) you won’t qualify. This is where hard money lenders come in.
Before I go into financing, there is something you need to do: study the market. I can’t say this enough because if you don’t understand the market and trends, you won’t find a good deal. Instead you’ll find a property that looks like it’s a good deal but it really isn’t. There is no such thing as too much preparation or too much research when it comes to real estate investing. Education and knowledge is everything so you are in the right place.
Now back to hard money lenders. How do I get a hard money loan? Can I trust hard money lenders? What is a hard money loan?
First of all, a hard money loan is a private lending alternative for Real Estate investors. Private investors/Lenders will lend their money and will use the property as the collateral. Hard money lenders are not out to steal your money and force you to pay high fees. They’re here to provide you with quick financing without all of the red tape.
When applying for a hard money loan, it is important that you lay your cards out on the table. Integrity and transparency is the name of the game when it comes to hard money loans. If this is your first real estate investments, don’t be afraid to tell the lender that. If they’re a good hard money lender, they will help you through the process every step of the way. They want to see you succeed because when you make money, they make money.
You also want to make sure that you have all of your facts straight. You don’t want to meet with a lender and not have a clue about the numbers, the LTV, or the market. Doing all of the necessary research is the most important step of the process, though it is definitely the most tedious. You want to impress the lender by having all of your facts straight and also having all of the correct paperwork. They will be more likely to work with you if they see that you are serious about this venture.
Here’s the thing about flipping houses. There’s always a risk. Every investment has risk but your goal is to find an investment with the least amount of risk. You can help to reduce the risk by doing all of the proper research and working with a team that is there for you. If you can, find a mentor that will show you the ropes of the business before you get started. There are many experienced real estate investors that want to help rookies. Everybody has got to start somewhere!
You can get more information about hard money loans, real estate investments, and house flipping by signing up for this free eBook from HML Investments. By signing up for the free house-flipping checklist, you will also get Yanni Raz’s Tip of the Day emails which you can find by clicking here. Let Yanni be your mentor as you get ready to embark on your new investment projects!