We know that there are multiple different ways to get real estate financing. The problem is that most real estate investors have no clue these options exist. They are tricked into thinking they need their own CASH or bank financing to fund their deals. They are lead to believe that they must WHOLESALE properties for quick cash and create a "buffer" of assets prior to doing BIG DEALS. But that just isn't true.
There are many options you can use for funding real estate deals such as...
- Line of credit
- Partner up with someone
- Transactional funding
- Private money
- Hard money
- Bank financing
Let's take a look at a few of these options closer and see which ones might work for you...
Bank Financing
Conventional bank loans will get declined once the lender finds out that it's either an investment property or that the property will need repairs. Banks also have only a maximum number of loans that they will give out and they will only lend on the purchase price.
Advantages:
- Inexpensive - typical interest rates between 5-6%
Disadvantages:
- Lengthy closing process
- Conventional bank loans get declined once the lender finds out it's either an investment property or that the property needs repairs
- Banks require a 680 credit score for investment properties
- Banks have a maximum number of loans they will give out
- Banks only lend on the purchase price and want 20-30% down
- Banks force investors to pay for repairs all by yourself out of your own pocket
- Banks force us to max out our credit cards and personal loan amounts to pay for rehabs
So as you can see, in the case of a big profit fix and flip, traditional bank lending probably isn't your best bet for funding. Let's look at another option...
Private Lenders
Private lenders are everywhere and they are dying to find good investments with a high rate of return. They want to preserve their principal amount. To put that into perspective, corporate bonds are paying a 3.11% yield and CD's are paying about a 1% yield. Some stocks are paying a 3% dividend, which you could consider a yield.
Advantages:
- Private lenders are dying to find good investments with a "high yield"
- Corporate bonds are paying 3.25% yield
- CD's are paying a 1% yield
- Stocks pay a 3% dividend
- Real estate pays 12-15% yield in the form of interest on notes and mortgages
Disadvantages:
- They are HIDING FROM YOU: Chances are, if you talk to 100, you'll get one
- Some private lenders ONLY want to lend to someone with experience (ALTHOUGH, I had no experience when I received my first private lender investment back in 2004)
- Some private lenders only want to fund a percent of the deal, not the whole thing
Working with private lenders can be the absolute best way to fund your real estate deals, but you have to know people with money who are willing to invest in you. You have to have a few good deals under your belt to be able to show them the good work you do. If you're just starting out, this way isn't always an option.
Freeland Flexible Funding
What if there was a funding option where you only had to worry about the cost of the appraisal and site inspection - and everything else was covered? That's what can do for you at Freeland Funding - we are a Flexible, Asset Based lender and we look more at your potential deal than your credit score or pay stubs.
Once you are a Strategic Real Estate Coach member, you can begin submitting your potential deals to us through our Deal Genie. A Freeland Property Analysis is required on ALL loan submissions. Our Approval Team will then review your deal using specialized tools and simple research to approve your deal.
You be on one of two tracks - either new (10 deals or less) to intermediate (10-25 deals) or intermediate to advanced (over 25 deals closed).
When your loan is approved and your deal is closed, you will have a Freeland Servicing Project Manager call you the first week of each month to check in on your deal while you are repositioning it. We support and track your progress to make sure every deal is a success for you and for our investors. If you have questions or hit a bump along the way, we are here to support and help you.
Student Case Studies
Let's review a few deals we have recently funded for some of our members...
Address: 3128 Dogwood Drive, Atlanta, GA 30354
Purchase: $85,000
Rehab: $35,000
ARV: $175,000
LTV: 68.5%
Gross Profit: $42,870
Borrower: Desmond S.
Address: 422 Cedar Drive, Hampton, VA 23669
Purchase: $70,000
Rehab: $40,000
ARV: $180,000
LTV: 61%
Gross Profit: $58,450
Borrower: Cindy C.
Address: 3136 Cobblestone Drive, Pinson, AL 35126
Purchase: $62,000
Rehab: $29,950
ARV: $140,000
LTV: 65%
Gross Profit: $48,050
Borrower: Joseph D.
Become My Partner
Whether you are just starting out in your real estate investing career or if you have experience but just need access to funding, we can help. There is truly no time like the current to get into this industry and start seeing the profits roll in month after month.
Imagine how it will feel to finally be able to get your investments funded and be able to confidently make offers.
Join me today on this free masterclass to learn more.
Just for registering, you'll get my “Net Profit Estimator Sheet” This critical sheet is exactly what I use to calculate the potential profits on each and every deal. My students love it because you know if you’re looking at a winner or loser instantly!
Imagine what that first $40k check could do for you and your family...
Be Daring,
Josh
CEO Strategic Real Estate Coach
CEO Freeland Ventures and Freeland Lending
CEO Yellow Jacket Properties
