1 / 12

The Real Estate Investing Trinity

Brian Lee of http://geniustypes.com/ discusses the symbiotic relationship between wholesalers, rehabbers, and hard money lenders.

Download Presentation

The Real Estate Investing Trinity

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.


Presentation Transcript

  1. The Real Estate Investing Trinity Hard Money, Rehabbers, Wholesalers By: http://geniustypes.com/

  2. Symbiotic Trinity • Hard money lenders, rehabbers, and wholesalers all depend on eachother in the real estate investing world. • When investing in real estate you must figure out your “role” and then fill your circle with as many people from the other categories as possible.

  3. Three Levels • These three spheres of the real estate investing world also represent three different levels. • As your net worth grows and you gain more experience, the idea is to move up the levels to more and more passive income. • If you don’t have a lot of money or credit you start of as a wholesaler, then move on to fliping or renting homes, and then advance to hard money lending.

  4. Wholesaling • This is where you start if you want to invest in real estate but don’t have great credit or a lot of money. • It takes time and money to make it profitable. • Most investors will spend 70% of the houses after repair value to purchase a rehab it. • If you can find and buy a house for less than 70% of it’s ARV, you can sell it to a real estate investor and pocket the difference.

  5. Wholesaling • You don’t need great credit, because you’re not actually buying the house. • Since you don’t have money to buy the house, you find an investor who does and sell the contract to him. • First you need to find a motivated seller. There are many scenarios in which someone is under pressure to close fast- find them! • One way to find these people is to put up bandit signs- “We Buy Houses” + Your Phone Number

  6. Wholesaling • You can also find sellers by “farming,” or putting up flyers in neighborhoods letting them know you’re interested. • Sending out mailers or placing ads on the internet work too! (Although internet ads are much more expensive) • Bandit signs have the lowest cost per buy- meaning relatively they’re the least expensive marketing tool, but also the most time consuming. • Go to real estate investing clubs to find investors!

  7. Rehabbing • Simply put you buy a house and fix it up to sell or rent. • To do this you’ll need to borrow from a hard money lender • You’ll need $10-20,000 and a credit score of at least 700 • Remember that the key to making money in real estate is only buying property at 70% of its after repair value

  8. Rehabbing • Out of the 30% that’s left over, 10% will go to a title company or realtor when you sell, 10% will go for holding costs, and the rest is your profit. • When you flip you can realize profits earlier, but when you hold a house you create long term wealth. • Keep in mind that there’s a huge tax advantage over flipping when you hold a property for longer than a year

  9. Rehabbing • To avoid having your own tenant horror stories, take management classes- this will greatly reduce your headaches! • Whatever the nuisances that come with being a landlord, you get to be your own boss and take your retirement into your own hands.

  10. Hard Money Lending • Hard money lenders are special banks that loan to real estate investors • They’re familiar of the risks and profit potential of real estate and are much easier to lend from • These lenders come in all forms- everything from large companies to individuals.

  11. Private Lending • An individual hard money lender • Most passive form of real estate investing • Do your due dilligence and make sure the buyer and property are credible- then sit back and collect your interest checks! • Remember to never loan more than 70% of the after repair value, get 1st lean on the house, and work with responsible and experienced buyers

  12. Helpful Links • Visit geniustypes.com for more information on blogging, social networking, passive income, real estate investing, and creative life.

More Related