FREE Real Estate Investment Webinar - March 26

How to Prosper With Real Estate

- A webinar featuring Bob Malecki & Wendy Ceccherelli of REI Capital USA -
Tuesday March 26th
6:00pm - 7:00pm PDT
(9:00pm - 10:00pm EDT)
This webinar will examine the question,
"Why should you consider real estate as an investment alternative?"

Bob Malecki and Wendy Ceccherelli of REI Capital will explain the many benefits of including real estate in your portfolio, discuss how real estate performance compares to the stock market, and how to perform the proper due diligence for real estate asset classes. They will share their secrets for developing a top investment strategy that will put you on the path to financial freedom.

Register now to reserve your spot!

https://cc.readytalk.com/cc/s/registrations/new?cid=5fozvkk7dty7

Raising Private Money for Real Estate

Trish Williams was the speaker at last night's meeting of the North End satellite group of REAPS (Real Estate Investors Association of Puget Sound). Trish has raised $22million in private funds in the past 30 years, mostly for single family homes. Her agenda covered the following topics on raising private money for real estate:

Attitude
Money Stats
How to get private money
As for Attitude, Trish pointed out that Money is a tool; money is not evil; it depends on what you plan to do with it.

She presented the following Funding pyramid: Institutional Equity (Hardest to raise)
Individual Equity
Grants
Strategic Financing
Bank lines & loans Financial Maneuvering - (e.g. Refinance to pull money out)
Social Lending
Creative Funding
Crowdfunding
Quick Loaners

Trish says that institutional buyers such as hedge funds purchase 30-40 properties per week in our area, buying with cash and holding long-term. They may be spending $100M, paying 20-30 cents on the dollar, but they are buying in bulk.

Angel investors are individuals who provide capital to start-ups. They are usually affluent or hold a personal stake in the success of the venture. Such investments are characterized by high risk. The average angel investor is 47 yrs old, has an annual income of $90K with a net worth of $750K; are college-educated, self-employed, and invest $37K per venture on average. There are 200 angel groups in the US.
Trish described the lessons she has learned in the last few months, buying 240 units or less in a tough lending environment. It is best to know what investors want, looking at cash-on-cash returns, cap rate, or cash flow. There are more savvy investors today, with a lot of investment options from which to choose. While this may be the best time to be buying, it is important for investors to know why they should invest with you.
It is important to know what potential investors want, and here are some questions to help determine this:
What do you need to invest to make your business work?
How can I help your money grow? Let me show you how to rebuild your IRA.
Find out what investors are looking for up front.
Alan Cowgill, Jillian Sidoti recently gave great presentations to REAPS members on how and when to approach prospective investors.
Put your credibility kit together and approach angel investors
angelcapitalassociation.org/directory
or other crowdfunding sources:
Gust.com
Funded.com
Equity net.com
Bigger pockets.com
Raisemecapital.com

Here's a link to a crowd funding video I really like.
Talk to friends, family, people you know - even strangers at the grocery store - and give them your pitch. For more information on private lending, please contact me at HomeLandInvestment@gmail.com or call me at 425-270-7292.

Finding Money for Real Estate Investing

You are ready to invest in real estate; you even have found the right property and a willing seller, and now that pesky problem: where to find money?

Most buyers simply go out and borrow money using a conventional lender, i.e. getting a mortgage on the property. However, limits on the number of properties that can be mortgaged under one name, and the tightening of conventional lending requirements may make it difficult for some investors to finance non-owner-occupied properties this way.

Several other options are available. One option may be using your HELOC. A HELOC , or Home Equity Line of Credit, is extended to a homeowner by using his home as collateral. There is a maximum amount that the owner can borrow, but he may draw on that line of credit as desired. The interest charged is usually the prevailing prime rate. Repayment schedules, which can vary from 5 to 20 years, are negotiable as long as the interest payments are made monthly. This option can be particularly powerful for the investor if he has amassed equity in his home, especially as historically-low interest rates are now available. This may be a viable tool for investors, even in today’s market, if they have owned their homes for a long time.

Secondly, credit cards may be a viable option in the short run, if you are looking for funds that will be cashed out when the remodel is finished and sold, or if those funds will be replaced by a traditional mortgage or by other private funds. Hang on to those promotional offers from credit cards! Many offer a 0% interest rate during the promotional period, for a low balance transfer fee of 3-4%. Read the fine print, but keep this option open.

It is a good idea to periodically request increases to your credit card limits, if you are a good borrower. This will give you flexibility in financing options for the future.

Often times, relatives and friends are willing to partner in sound real estate investments. Don't forget that rich Uncle! You may be doing him a favor in providing an investment with better returns than his other investments are currently paying. Sometimes co workers or clients are open to investment opportunities, and through pooling such resources, you can accumulate a sizable amount. Talk it up and ask around – people have pulled money out of the stock market and are looking for investment opportunities. REAPS featured a panel of private money investors at its August meeting, where this topic was discussed with real world examples from our own backyard.

Consider limited partnerships- such arrangements may give you the immediate cash flow benefit you need. The seller himself can often be creatively induced to enter into a funding agreement with you, particularly if he is highly motivated to sell, as many are in this economy.
Become educated on the dos and don’ts of private lending. REAPS invited the Washington State Department of Financial Institutions to our October meeting to discuss state and federal regulations and exemptions for borrowers and lenders.

Don’t forget retirement funds! You may self-direct your Individual Retirement Account (SDIRA) to invest in real estate, not just securities! Your 401 K is a great source of funds that can be partially liquidated, or you could borrow against the cash value of your insurance policy.
Stocks or other equities may be cashed in, and proceeds rolled into a self-directed IRA or used to fund purchases directly.

Of course, hard money lenders are always a possibility. Sometimes lenders can be flushed out by perusing the 'wanted to buy" ads, or even a more direct approach- take out a newspaper ad yourself asking for potential lenders who may be eager to invest in a real estate project with you. Tell the potential investor how he benefits. An example may be: " I have the opportunity to buy a $200k house for $100k, but I need a cash investor. I do the work, you invest the cash, and we split the profits.”

Sometimes YOU can be the best source for private money- and that's OK! If you have cash under the mattress, pull it out and get in the game! Or partner with other investors.

The only limit to finding private money for your real estate needs is your own hesitation. With creativity and a little knowledge, you can be the greatest source of generating needed capital.