bloggers,
Welcome to the sequel. Below is part 1 for reference. The question was, what is hard money and transactional funding. HardMoney is Brokered Private money. Private money is an independent investor who pulls money out of his own wallet to partner or JV with investors. Sometimes, the way they invest their money is by brokering it. For a fee. If they lend at 9%, a broker will lend out the same funds at 12% or so.
Often time the hard money will be lent out at a percentage of the purchase price. Say, you got a deal on a house for 100k. The hard money lender will lend you about 70% of purchase price. Meaning you will come in with the rest. Best way around this is to JV with the pvt lender yourself. Often times, for a cut of the profits, they will lend the entire balance needed plus rehab for the purchase of your proeprty.
Transactional funds, are exactly that. Funds lent for a term of 24 - 48 hrs to do a back to back closing. Where you will purchase a property with an end buyer in place and flip it within a 24 hr period. Often times, the TFs are not lent out until you already have the End buyers funds in place. Actually, its every time. The terms are great, and is probably a method i would start with.
Do some research online, search the terms found in this blog and if you still have questions, drop me a line here and i will do my best to answer it.
Happy investing,
YanezUnited
Bloggers,
Today, i will define all those yellow signs and Online ads you see everywhere that say, "WE BUY HOMES,."
To the newbie investor, this is intimidating. You think to yourself,.." I don't have money to buy any homes?"
We are confused by this because we are using our adult definition of the term, BUY. We know how it applies to our daily lives. You buy some bread at the grocery store, a pair of pants, some shoes,,.....toothpaste.
Right? The term BUY to us means taking it home and using it. Keeping it. Owning it. That is where the confusion kicks in. Those fellas must be stockpiling a heaping bunch of homes.
No. These investors are Buying these homes, and owning them in many cases for not much longer than 24 or 48 hrs. There is a contract in their name that says they are purchasing that home on the corner, and that they did pay money for. But soon after that is signed and done, or some cases , simultaneously, a second purchase contract is filled with the new investor who will truly make an honest to goodness purchase on that property.
Often times using, Private money/Hard Money, or Transactional funding, they are able to purchase and resell the property to an Buy and Hold investor or rehabber.
So, what is Private Money/Hardmoney and Transaction funding? Im glad you asked,................
.........( see part 2 of this blog soon, )
YanezUnitied
