Real Estate Investing Coaching - Brian Gibbons

Real Estate Investors - Need Private Funds? If you can find the motivated sellers.....

If you as a real estate investor need Private Funds for new first mortgages, look at this article below.

You may or may not know, I train Real Estate Investors to get Private Money Marketing.

The steps to getting millions in loans are:

• Learn IRAs and Self Directed IRAs
• Learn CDs
• Learn how to get lists of people that have IRAs and CDs
• Set up a Seminar Free to All from those qualified lists
• See them 1 on 1 and offer 10% with security of being a Private 1st Mortgage Lender no riskier than 80% LTV.
• Do the paperwork and have the right clauses and CYAs.
• Close at an attorney's office.

That's it!

And keep in good communication with your private lender.

And GET THEIR FRIENDS AND RELATIVES as referrals!

For more info on getting your private lenders for all your deals, email me at team@REISkills.com

Ask for MENTORING FOR PRIVATE MONEY!

All the best in 2009,

Brian Gibbons, REI Coach

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Real Estate Resurrection Begins
Hugh Bromma, Entrust Group 01.08.09, 3:45 PM ET

Sales of new and existing homes continue to decline in the U.S., as assets of all stripes are re-priced lower and consumers become more risk averse. But the news in real estate is not all bad, and in some of the hardest-hit areas, like California, Florida and Nevada, sales in some areas have been rising in recent months.

While the national real estate figures show the country continues to be mired in a downturn that started more than two years ago, there are increasingly pockets of hope out there. It's true that much of the recent uptick in real estate activity reflects distressed sales, such as foreclosures. But the fact is that drastically lower home prices and more attractive mortgage rates--rates are down almost a full percentage point on a 30-year loan--are creating more buying interest, especially in the areas that have been hurt the most.

In fact, October existing-home sales surged more than 37% in the West, primarily because of the rise in sales in California and Nevada. And in Florida, existing-home sales jumped 15%, the second straight month of rising sales in the Sunshine State. Meanwhile, mortgage applications more than doubled during the week of Thanksgiving because of the rapid decline in rates.

Adding to the budding sense of optimism are reports that the U.S. Treasury will look to take mortgage rates all the way down to 4.5%, which would provide a huge boost to would-be home buyers across the country. Of course, real estate, even more than politics, is all about understanding the local area, which is precisely where astute investors are finding extraordinary opportunities.

Experienced real estate investors who have been able to keep some powder dry and understand their local markets are now able to buy properties for 50 cents on the dollar, or even less than just a year ago. In many cases, these are the kind of prices that represent once-in-a-lifetime opportunities, where the downside is now very limited and the upside is incredibly compelling.

One of the keys to finding a great real estate investment is understanding the importance of cash flow. We recently had a client utilize his self-directed IRA to purchase a brand new property just outside of Los Angeles. The property, a three-bedroom, two-bath single family home, was purchased for about $150,000, half what the exact same home would have cost a year earlier.

The purchaser had about $60,000 in the IRA and put down about 30% of the purchase price, making his monthly mortgage payment approximately $1,100 per month. In this area, similar properties rent for at least $1,400, so the property should have no problem showing positive cash flow right from the start. In addition, if there is a pick-up in the real estate market, the purchaser should be able to sell it outright for a handsome profit.

This is the kind of activity we are seeing more of in what were the hardest-hit areas. The key, of course, is having available cash--if you're buying real estate in a self-directed retirement account, you will need to put down 30% of the purchase price--and understanding the unique dynamics of the market you are buying in.

As a large administrator of self-directed IRAs, we've witnessed thousands of investors use their self-directed retirement plans to buy properties and realize excellent returns by selling them at a later date or renting them and allowing them to cash flow, as discussed earlier.

If you do decide to explore some of the more downtrodden areas, do your due diligence and understand the market in which you plan to invest. How is the local job market there? How has the area done in previous economic downturns? There's no substitute for knowing your market and doing your homework.

Hubert Bromma is CEO of the Entrust Group and author of How to Invest in Real Estate with Your IRA & 401(k) and Pay Little or No Taxes, published by McGraw-Hill.

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Overview of Being a Private Lender

Secured Loans (Trust Deeds/Mortgage Notes)  www.Pensco.com

            

Overview

            

A note is an extension of credit from one or more individuals               or entities (lender(s)) to another individual(s)or entity(ies)(borrowers).

An IRA is able to extend credit to any party (including corporations)               as long as the party is not considered a “disqualified person”.

Such notes can be either secured or unsecured.

If they are secured,               it means that in the event the borrower defaults on the loan from               the lender, the borrower agrees to supply the lender with the “collateral”               or “security” in lieu of the principal balance of the loan.

            

The most common example of a secured loan is the mortgage you may               have on your primary residence.

In this case, you get a loan from               your bank, after supplying an agreed upon amount of equity or down               payment. The bank will extend the loan only if you pledge the deed               to your property as “collateral”.

Thus, if you fail to make your               mortgage payments to them, they have the right to “foreclose” and               take the property from you. And to make matters worse, you will               lose your equity or the amount you originally invested and any appreciation               since buying the property.

            

In many states, these loans are called mortgages. In some states,               they are called “”trust deeds” or “deeds of trust”.

In any case,               they are secured loans (notes), usually with property as collateral.

The collateral can be real estate (of any kind), gems, mineral rights,               a car, plane or virtually anything else of value as agreed upon               between the borrower and lender.

            

Many of PENSCO Trust’s clients have invested in nothing more than               such “trust deeds” over the years, and have experienced steady returns               in the range of 9-15%, depending upon market conditions and the               creditworthiness of the borrower(s).

These investments generally               result in monthly income (principal and/or interest payments against               the loan), which makes them suitable for someone who requires a               steady income (distribution) from their IRA.

One of the keys to               the success of these investments is the quality of the “underwriting”.

• This entails, briefly, evaluating the creditworthiness of the borrower,               and the value and the condition of the property itself (so that               the lender or IRA owner can be assured in the event of default,               that his or her IRA will be able to receive at least the amount               of his or her investment in the event of foreclosure).
• If the note               is secured by a deed (hence “trust deed”) to a property with a low               loan to value (e.g., amount of debt/value of property), there is               a good chance, if a default occurs, that the lender will not only               get their entire investment back, but also a good part of the equity               buildup, including the borrower’s down payment.

            

• However, the objective of most of these loans (sometimes referred               to as “hard-money loans” because of their generally higher rates               of interest) is not to have the borrower default.
• Most of these               loans are given to people in the midst of some financial crisis,               such as the loss of their job, or a medical crisis, where they need               short time financing that would otherwise not be available through               traditional lenders such as banks.
• Banks, who are not in the business               of foreclosing and taking physical possession of properties when               their debtors default, will generally require a borrower to have               a regular source of income before they will lend to him or her.
• Hard money lenders, who specialize in these so-called “B” or “C”               paper loans, will usually not lend more than 70% of the value of               the property, to be sure that their risk of loss is mitigated.
• In               addition, the more equity a borrower has in their property, the               more likely they will do everything they can to ensure that they               don’t go into default, thus, losing their equity investment in the               property.
• The balance between the needs of the supplier (lender),               and the demander (borrower), is usually determined by a mortgage               broker that specializes in “hard-money loans”.
• The broker generally               finds borrowers and then “brokers” or sells the loans to investors               (the lenders, including self-directed IRAs). The broker charges               1-2% and the balance of the yield on the loan goes to the investor.               Most of these brokers also offer to “service” these loans, for an               additional fee, which can range from $10/month to .5-1% of the loan               value per year. Servicing means collecting the loan payments and               processing them, as well as going after delinquent borrowers. Some               states will have licensing and regulatory requirements for such               firms.
• California, for example, one of the top hard-money mortgage               lending states, has supervision over all such “hard-money” lending               firms through its Department of Real Estate.
• It is important to               understand the rules in your state regarding these type of loans               and the brokers who provide them, to be sure that you enter into               a sound and legal investment.

But, done correctly, with good underwriting,               these loans can be a good source of consistent and above-market-rate               returns. Of course, when these compound tax-deferred in an IRA over               many years, the results can be dramatic.