Foreclosure News Blog

Many of the “real estate experts” stress the importance of using other people’s money (OPM). They say it’s best to use other people’s money to defer risk, but really it’s because they want people without money to invest in real estate. If you’re not confident in your real estate investment enough to be using your own money, then you probably shouldn’t be taking that investment option. But that’s not the point of this article, today we will talk about hard money.

Privately funded loans with high interest rates and fees intended for temporary financing are known as hard money loans. These loans aren’t called hard because they’re diffucult to get, what they are is hard to pay off. Hard money loans aren’t cheap. They usually have an upfront origination fee of 3 to 5 percent, and double digit interest rates.

One of the major differences with hard money lending, and other types of financing is the criteria used to determine finance risk. The focus on traditional mortgage loans is the borrower. Traditional lenders only approve borrowers with good credit, low debt, and consistent income. With Arizona hard money loans, the main focus is on the value of the property. When the value of the property is worth significantly more than the amount financed, hard money lenders will typically grant financing. If the borrower happens to default, the hard money lender doesn’t have a problem foreclosing on a property with substantial equity.

Despite the risk, hard money loans can be very useful, especially for real estate investors. For many real estate deals to happen, the invester needs funds very quickly. They must come up with money fast. Good California hard money lenders are able to fund money in a very short period of time. If it is a good levitra price investment, despite the high borrowing costs there can still be a significant profit. The important thing isn’t how much money the investor spent, but how much money the investor made.

Lets say a real estate investor borrowed $100,000 at 10% interest, flipped a property, and then sold it for $140,000 six months later. If there up front fee was three points on top of then to the interest paid. They may have paid the hard money lender Nine Thousand Dollars, but they would have netted more than Thirty Thousand..

Real Estate investors can benefit from hard money loans, but need to be careful with the way they use them as the costs are very high.

Technorati Tags: hard money, mortgages, real estate, real estate investing

The Obama foreclosure prevention plan includes the offer of incentives to banks and other lending institutions to consent to more loan modifications, push up the number of approved refinancing applications, and make available more home loans to first-time home buyers.  The Helping Families Save Their Homes Act that buy acomplia online was approved by President Barack Obama in May 2009 is the main foundation of the program.  This law was created to add to the anti-foreclosure strategies of the Hope for Homeowners Act that was previously issued to help homeowners with remaining loan balances that were bigger than the current market value of their homes.

The Obama foreclosure prevention plan helps borrowers in getting the banks and other lending institutions to agree to their loan refinancing proposals to bring down their monthly installments to more affordable amounts.  It should be noted, however, that a borrower must have a loan balance that is not more than 105 percent of the current market price of his home in order to qualify for the program.  The President’s program also gives bonuses to the lenders or banks for every loan modification that they approve and reduces the monthly payments so that they do not surpass 31 percent of the monthly salary of the homeowner.  Fannie Mae and Freddie Mac will also be able to offer a greater number of home loans for first-time home buyers because the Obama foreclosure prevention plan has added to the funding of these two corporations.

Unfortunately, the critics of the Obama plan quickly grabbed the chance to pick apart the initiative when it failed to make a noticeable effect on the housing crisis in September 2009.  However, those who like the Obama foreclosure prevention plan answered back by pointing out that it had started to have some positive results.  For example, the plan seems to have been the major cause of the reversal of the declining trend in home market prices and the rise in the number of foreclosure filings in a number of states.  In response, critics of the President’s program countered that only a small number of the borrowers who should have been qualified to get their loans modified had benefited from the program.  Some opponents also pointed out that the Obama foreclosure prevention plan should have been based on acceptable economic principles.  But members of the Obama Administration continue to support the plan and have revealed that a milestone had been attained in the number of loan modifications that pushed through.  The members of the federal government are sure that the President’s anti-foreclosure strategy will accomplish what it has sought out to do and they continue to report to the public about the project. Check out http://hardmoneylendersonline.com to view other methods of loan funding availeble

Technorati Tags: forecloser, foreclosure news, hard money, help with foreclosure, obama foreclosure bailout, obama housing bailout, obama mortgage bailout, obama plan, obama rescue plan

Flipping foreclosures has become a profitable venture because of the presence of so many foreclosed homes for sale.  However, you need to have a good understanding of foreclosure laws in your state, how to assess the market value of a particular property, and where to look for properties that have the potential for profit.  

Before deciding on a particular property, it is important to perform a lot of research to ensure that it will provide you with profits.  There are a number of factors to look into but basically you will need to examine the market value, estimate the expenses, determine the total amount of debt, and compute your potential profit.  You may need to be patient when you are searching for the foreclosed property but it may be found through direct mail, banks, seminars, newspapers, word of mouth, real estate agents, lis pendens lists, friends, and the Internet.  

However, locating the right real estate agent will make the process of flipping foreclosures much easier for you.  It is important for this real estate agent to have extensive knowledge and experience regarding the foreclosure market, especially with regards to Real Estate Owned (REO) properties, which are those that remained in the inventory of the banks after the foreclosure auctions.  It is also important to ensure that the real estate agent is capable of closing a deal, is knowledgeable about foreclosure laws, and has contacts with  vital mortgage professionals to make the buying process much easier.  If the property that you are targeting is not found in another state, you also need to ensure that your real estate agent is knowledgeable about the market conditions in that state.

After identifying a property that has the potential to provide with a net profit, you need to ensure that you have your possible sources of funding lined up.  Some of the banks may not be very willing to offer you with a loan to help you in the purchase of the property.

It is also advisable to avoid the foreclosure auctions for the time being if you are new to flipping foreclosures because Cheap Propecia online you will be competing with professionals.  Moreover, the homes that are sold in auctions are available as is and you may not have the opportunity to examine them before the auction.  It may be better to start with a property in the REO list or a house that is still in pre-foreclosure.  While in the pre-foreclosure stage, you may directly transact with the homeowner.  It is important to remember that flipping foreclosures can offer you much profit but only if you do your homework and are willing to learn from experience. For more information stop by http://hardmoneylendersonline.com

Technorati Tags: flipping, foreclosure, hard money, hardmoney lenders

With the subprime crisis of a few years ago, and the recession of the past couple of years, the demand for the services of mortgage brokers has diminished. These facts along with tighter lending standards, has led to tough times for mortgage brokers, with many having difficulty finding enough clients to maintain their business.

Although lending standards have tightened, real estate investors are still finding ways to fund their real estate projects. Many are turning to hard money lenders to obtain the financing they need to flip a property, invest in a foreclosure, fund a new construction, and other real estate projects. These hard money loans are asset based loans, using the intrinsic value of the property as collateral for the loan, rather than relying on the investor’s credit worthiness.

Mortgage brokers, who find themselves short on clients, can look to hard money lending to expand their clientele. Lending to real estate investors will allow them to take advantage of this growing segment of the market. Those who have jumped into the hard money lending arena find that they have little competition with other brokers, and have many clients looking for a broker to help them with their financing needs.

An added advantage is that real estate investors, unlike individual homeowners are repeat customers. Most will make multiple investments in a year, seeking new financing for each, thereby increasing your business two, three, and even four fold per new client. Helping real estate investors find proper financing is buy cheap Diabecon online an underserved market, and a broker who teams up with the right hard money lenders can quickly capitalize on this need.

A broker wanting to expand into hard money lending should research the market as well as the availability and reputations of the hard money lenders in their area. Start by doing an internet search on the hard money lenders in your area, and assess their offerings, experience, and dedication to hard money lending. Then set up interviews with the firms that stand out. You want a hard money lender who is very knowledgeable about the local real estate market, who strictly deals with hard money lending, and is well capitalized, with many financial backers. They should be very professional, organized, and of course ethical. Hard money lending can be a very profitable niche for mortgage brokers who team with the right hard money lenders.

by: Hard Money Bankers, LLC

Technorati Tags: hard money, hard money lenders, hard money maryland, real estate investing

Land Trusts: The Answer to Flipping Short Sales?

Flipping a property means to settle on a piece of property for one price and immediately (within minutes, hours, or a day) “flip,” or sell, the property to another end-buyer for a higher price. It’s a great situation for a real estate investor who has little cash, as usually the investor doesn’t even need to come to closing with his or her own funds.

In today’s real estate market, it’s not uncommon for a real estate investor to find property in which the seller is in default of his mortgage and the outstanding mortgage balance is higher than the value of the house. To make a profit, the investor will offer an extremely low price, get it accepted by the bank, and attempt to “flip” the property to another end-buyer.

This flipping technique, when successful, can yield impressive profits. Unfortunately, trying to flip short sales can be problematic for several reasons:

First, the seller’s lender must approve the contract of sale, which includes approving the buyer. If the lender smells a flip, the contract will not go through.

Second, even if the real estate investor can overcome the first issue, the end-buyer’s lender will likewise not allow it. The new lender requires the title to the property be “seasoned.” In other words, the property deed must already be in the investor’s name and recorded at the County land records for some period of time before they will agree to lend on the property. And, if the investor has not yet gone to settlement with the seller, how can he satisfy this requirement?

A land trust may be the solution to both these problems. A land trust is simply a private agreement whereby the property is placed into a trust and a named trustee is empowered by the trust documents to sign over deed, but the “beneficiary” is the one entitled to all the “benefits” of the property just as if that beneficiary were in title herself.

Here’s what a land trust transaction would look like:

1. Seller’s bank has a mortgage against Seller’s property for $150,000.00, but agrees to accept $100,000.00 as a short sale payoff;
2. Seller creates a Land Trust naming herself as a beneficiary and records a deed at the land records placing the deed into the Trust;
3. Investor contracts with Seller to buy her “beneficial interest” in the Trust for $100,000.00. At the same time, Investor finds an end-buyer willing to pay $125,000.00 for the property;
4. On the day of settlement, the Seller assigns her beneficial interest in the Trust to Investor, and the Investor gives Seller $100,000.00 which, in turn, is paid to Seller’s bank;
5. A few moments later, the end-buyer shows up for settlement and pays $125,000.00 to Investor, and the trustee of the Trust executes a deed for the property to the end-buyer.

By using a land trust, the investor solves both problems mentioned above. First, the Seller’s buy cheap Rimonabant online bank will have no idea that this transaction is a flip. The bank only sees that the investor has come to settlement for $100,000.00.

Second, the end-buyer’s lender does not question the transaction because there is no deed that needs to be recorded at the County land records placing the Investor in title. The Investor gained title to the property simply by purchasing the beneficial interest in the Trust, and this type of purchase does not require a deed recordation. Thus, the new lender will only expect to see a deed from the Trust to the end-buyer. In essence, the Investor becomes “invisible” to the lender and this eliminates any seasoning issues.

Although this is an advanced investor strategy and only to be used under the guidance of a competent real estate attorney, this may be the best way to get short sale flip transactions done in today’s real estate market.

by: Jeffrey Shiller, Esq.

Hard Money Bankers, LLC

Technorati Tags: hard money, hard money lending, real estate investor

Be careful about buying that LLC!  Maryland is the most recent addition to the list of States making real estate investors and commercial property owners a bit poorer this year by instituting transfer taxes on the sale of an entity such as an LLC that owns real estate.  And since we are a Maryland hard money lender, we have seen this happen a few times recently.

In a State saddled with heavy transfer and recordation costs for real property transfers (up to 3%, which are some of the highest rates in the U.S.), many investors have for many years taken advantage of a loophole in Maryland law allowing limited liability company transfers to occur without the imposition of these heavy taxes, even if the entity owned real estate.  Starting in June, 2008, however, Maryland has closed that loophole. Many other mid-Atlantic States have already, or are about to, enact similar legislation, including Delaware, New Jersey, Virginia, Washington, D.C. and Pennsylvania.  Here are some specifics on the new Maryland law (codified in The Annotated Code of Maryland, Tax Property Article, Section 12-117 (c) and 13-103 (b)):

A transfer of a “controlling interest” in a “real property entity” within a 12 month period will now require payment of all applicable recordation and transfer taxes, regardless of whether a Deed is executed or recorded at the County Land Records.  The transfer/recordation taxes will be based upon the “consideration payable” in such transactions.

Here are a few issues related to the law:

1. Definition of “controlling interest”:  A controlling interest is defined as being more than 80% of a real property entity, which means more than 80% of the value of all stock in the case of a corporation, or more than 80% of the value of all capital and profits for a non-incorporated entity (such as an LLC), or more than 80% of a beneficial interest in a trust.

1. Definition of a “real property entity”:  A real property entity is one in which Maryland real property comprises at least 80% of the value of the entity’s assets and has an aggregate value of at least 1 Million Dollars (without any reduction for mortgages or debts secured against the real estate).

1. How to compute the transfer tax on “consideration payable”:  This can get a little tricky, but let’s examine a common example.  A person sells her 90% interest in an RPE that has an aggregate value of 1.1 Million, of which $900,000.00 represents the value of the real estate, and $200,000.00 represents the value of other assets of the RPE, such as equipment.  There is a $500,000.00 mortgage on the property.  Transfer taxes will be imposed on 90% of  $400,000.00 (the equity difference between $900,000.00 and $500,000.00) plus the full $500,000.00 mortgage, so transfers will be imposed on $860,000.00. (In case you’re wondering why you pay transfers on the full mortgage rather than 90% of the mortgage, so are we.  Other jurisdictions such as Washington, D.C do allow for this.  Perhaps Maryland will fix this in coming years).

The above is just a basic outline of the new statute.  There will be many other issues addressed in the coming months and years:

• Can Maryland constitutionally tax transfers of controlling interests by out-of-state owner?
• Since the RPE has the responsibility of paying the tax, and not the individuals, don’t the non-selling shareholders get unfairly taxed? After all, it is the individual selling his or her interest.  Shouldn’t that particular buyer and seller bear the transfer tax burden?
• How does the buyer of an RPE insure that any prior transfers of controlling interests were properly handled?  Were the required taxes paid to the State?

Regardless of how these details are worked out, one thing is certain – buyers and sellers of real estate will now be forced to carefully factor this cost into their transaction decisions.

Happy investing!

The legal, mortgage and finance experts at Hard Money Bankers, LLC provide a full spectrum of services related to private/hard money real estate transactions including loan placement; underwriting, title and closing, and loan document production and servicing. Our mission is aciphex pharmaciess online to make the hard money process as smooth and fast as possible for both our borrowers and private lenders; and maintain the highest level of integrity, accountability and professionalism.

Jeffrey Shiller is a Maryland Attorney specializing in real estate. He is a principal of Hard Money Bankers, LLC. His services include nationwide settlements, loan document production, and structuring creative real estate transactions and hard money deals.  Mr. Shiller can be reached at 410.878.7090 or jeff@hardmoneybankers.com

Technorati Tags: hard money, hard money lenders, hard money maryland, real estate investing

Have you ever thought about investing in real estate, if only you had enough money to buy a house to rehab? Hard money may be just the answer for you.

When you have found a property that is selling for far less than its value, a hard money loan can be made to you based on the value of the property rather than on your personal credit history. You may have to pay 4 – 10 points on the loan, but this cost may be financed by the loan itself. For example, if you want to borrow $100,000 and the lender charges you six points, you may be able to write the loan for $106,000 to cover the cost of the points.

How is this possible? Well, it isn’t if you are buying a home worth only $100,000, but if you are buying a property worth $150,000, the deal looks a little better to the hard money lender. He likes the equity position you are offering. He also likes the high dollar points he will make on the loan, as well as the interest rate which will be higher than on a conventional loan.

How does this benefit you? Although the cost of the money you will be borrowing is high, you will (hopefully) be able to rehab the house quickly and sell it to pay back the loan quickly. You will only be paying the high interest rate for a few months before paying the loan off entirely. As far as the points, the increased value of the house accutane prices after you rehab it will be more than enough to allow you to pay the points while still making a handsome profit.  You may even get the lender to base the debt to equity ratio on the “after-rehab” value rather than the “as-is” value. This will allow you to finance the rehab costs with the loan, rather than coming up with additional money on your own.

After you have turned a profit on your first several homes, you may begin to qualify for more conventional financing at a cheaper cost, resulting in higher profits as you go!

By: Hard Money Bankers, LLC

Technorati Tags: hard money, hard money lenders, hard money maryland, real estate investing

Although hard money may mean a number of different things, in the context of real estate it is financing used for special circumstances when a conventional bank loan doesn’t fit the borrower’s needs. The primary difference between a hard money loan and a conventional loan is that a conventional banker typically takes a long time to evaluate the borrower’s personal accutane price creditworthiness while a hard money lender can put together a deal much more quickly, basing his or her decision on the value and collateral of the property which will secure the loan.

If you decide to use a hard money loan, you need to be aware that the interest rate will be higher than that of a conventional loan, and you will likely pay more points at closing. However, if the speed of getting your loan is important, it may be worthwhile to check into hard money.

For example, suppose you were to bid on a property at auction and won the auction for $50,000. The auctioneer might require $5,000 down and closing within two weeks. The property itself may be worth $80,000, so you don’t want to lose out on this great deal. You know you have over $5,000 in your savings account, so the down payment is not a problem. However, you have no idea how you will come up with the additional money needed for the closing that is just 14 days away. Perhaps your credit score is less than perfect. You remember when you bought your current residence, it took about two months to get the financing approved.

This would be a perfect time to consider a hard money loan. The lender likes the deal because he or she is securing a $45,000 loan with an $80,000 property and is receiving a high rate of return on the loan. You benefit by getting your money quickly, even though you wouldn’t qualify for a loan from a conventional banker. In fact, you may even be able to get the loan for enough money to allow you to rehab the house and sell it for a profit, paying back the high interest, hard money loan.

Hard money is often used for investment properties, foreclosure bail-outs, land acquisition and development, short-term properties that will be “flipped”, and any transactions that cannot be completed through conventional financing channels. Because the loan is typically paid off rather quickly, the cost of the money is not important. Rather, the advantage of hard money is its quick availability in the face of a less than perfect credit background.

Technorati Tags: hard money, hard money lenders, hard money maryland, real estate investing

You may have heard of a concept called hard money lending, and you may be wondering how it differs from conventional bank financing. Either type of financing is available for both commercial and residential real estate loans. The key differences are in three parameters:

1. Cost 2. Timing 3. Availability The cost of hard money is generally higher than conventional financing. Hard money lenders offer loans at a higher interest rate and with more points due at closing. A hard money lender is generally taking a bigger risk and feels justified in making more money off the accutane prescription refills loan. In addition, the money loaned is typically personal money rather than institutional money, which means that the profit margin must be higher to make it worth the lender’s while. The amount of time required to get a hard money loan is vastly shorter than the time it takes to get a conventional loan. This can be a huge advantage when a loan is being sought to Avoid foreclosure or to close on a hot real estate deal that is only available for a short time. Some hard money lenders can close in as little as 24 – 48 hours.   Conversely, most conventional bank closings can take up to 45 days for residential properties and even longer for commercial loans. Another key advantage to hard money lending is that loans are available to people who may have less than perfect credit or have financial problems. Conventional loans are based on the creditworthiness of the borrower, as reflected in his credit bureau report and FICO credit score. Hard money loans are based solely on the equity standing in the property to be furnished. Hard money lenders are basing their loan terms off of the real estate collateral. For example, a Hard money lender is going to be more willing to make a $100,000 loan on a property worth $200,000 than he is to make a $180,000 loan on a property worth $200,000. Hard Money lenders base their loans off of the collateral in the property. They are more concerned about underwriting the loan based off the property being their asset than the borrower. As long as the property is full of equity, it is usually a safe loan for a lender. Hard Money lenders will usually base their loans off of the value of the property and not necessarily the purchase price. If you are purchasing a property way under market value, you may want to consider a hard money loan in order to reduce or eliminate your down payment. Some hard money lenders will even allow you to roll all of your acquisition costs, closing costs, construction costs and even mortgage interest payments into the loan in order to purchase a property with a true, no money down loan.

So, if you are buying a property that is selling far below its value or refinancing a property that is full of equity and need a loan in a hurry, it may be worth it to consider a hard money loan. You need to be aware that the cost of credit will be higher, both in points and in interest rate, but the cost may not be your primary concern. If you will be rehabbing the property and selling it, you will only have to pay the higher interest rate until the property is sold. Your profit margin should more than pay for the higher cost of the money you were able to borrow quickly without a high credit score.

By: Hard Money Bankers, LLC

Technorati Tags: hard money, hard money lenders, hard money maryland, real estate investing

Although hard money may mean a number of different things, in the context of real estate it is financing used for special circumstances when a conventional bank loan doesn’t fit the borrower’s needs. The primary difference between a hard money loan and a conventional loan is that a conventional banker typically takes a long time to evaluate the borrower’s personal creditworthiness while a hard money lender can put together a deal much more quickly, basing his or her decision on the value and collateral of the property which will secure the loan.

If you decide to use a hard money loan, you need to be aware that the interest rate will be higher than that of a conventional loan, and you will likely pay more points at closing. However, if the speed of getting your loan is important, it may be worthwhile to check into hard money.

For example, suppose you were to bid on a property at auction and won the auction for $50,000. The auctioneer might require $5,000 down and closing within two weeks. The property itself may be worth $80,000, ultram generic versions so you don’t want to lose out on this great deal. You know you have over $5,000 in your savings account, so the down payment is not a problem. However, you have no idea how you will come up with the additional money needed for the closing that is just 14 days away. Perhaps your credit score is less than perfect. You remember when you bought your current residence, it took about two months to get the financing approved.

This would be a perfect time to consider a hard money loan. The lender likes the deal because he or she is securing a $45,000 loan with an $80,000 property and is receiving a high rate of return on the loan. You benefit by getting your money quickly, even though you wouldn’t qualify for a loan from a conventional banker. In fact, you may even be able to get the loan for enough money to allow you to rehab the house and sell it for a profit, paying back the high interest, hard money loan.

Hard money is often used for investment properties, foreclosure bail-outs, land acquisition and development, short-term properties that will be “flipped”, and any transactions that cannot be completed through conventional financing channels. Because the loan is typically paid off rather quickly, the cost of the money is not important. Rather, the advantage of hard money is its quick availability in the face of a less than perfect credit background.

by: Hard Money Bankers, LLC www.hardmoneybankers.com

Technorati Tags: hard money, hard money lenders, hard money maryland, real estate investing