Most people starting out in the property investment game need to focus on one thing above all others. Care to take a guess? Right you are: money. Do you know the second most important thing? Right again: guidance. You are one smart investor. Money and guidance are the two most important tools you can have at your disposal if you want to succeed in the house flipping business. A private real estate lending source is an invaluable partner as you invest. 2nd Chance Investment Group
Can You Have Your Cake and Eat it Too?
The problem most people have as they start out in house flipping is a severe shortage of both money and guidance. Or they might have one but not the other. This is like having one hand tied behind your back. You can have all the money in the world, but if you don’t know how to use it effectively, you’re up the creek. It’s the same thing with guidance. You can have as much great advice as you want, but without getting some investment funding you won’t be able to get your business off the ground.
Funding and Guidance from One Source
Fortunately for you, there are one or two top private real estate lending companies out there that offer both. That’s right. There are a tiny number of reputable, established lending companies that will not only lend you the funds you need for the deal, but will also provide you with all the guidance you need to be successful.
Asset-Based Lenders Are Best
And on top of providing both funds and guidance, the very best of these companies will also lend up you up to 100% of the deal price. How can they do that? They are asset based lenders instead of credit based lenders. You see, most banks and other lending institutions base their loans on your credit history. They want to see that you’ve paid every bill you’ve ever had on time before they’ll loan you a nickel.
Not so with asset-based lenders. These folks understand that not every potential investor out there has perfect credit. But that’s okay with them, because they’re far more interested in the deal itself and less concerned with your credit history.
The Magic Formula
These private lenders are primarily interested in the current value of the property and its post-rehab value – meaning what the property will be worth after you’ve rehabbed it.
Here’s the magic formula they use:
Purchase price + cost of repairs = after-repaired value
The after-repaired valuation is the most important piece of the model, and it’s what they base their loan decision on. The other factor is your character, which comes out in the credit review.
As you start your property investment career you can take comfort from the fact that there are one or two angels out there that will lend you up to 100% of the money you need, even if you have less than perfect credit, and they’ll also provide you with free guidance for how to maximize each project you bring to them, at every step of the process. Money and guidance – what more could you ask from a private real estate investment company?