How Bridging Financing Can Help Grow Your Real Estate Business

Bridging finance is used to secure property deals (traditionally private, or for residential or commercial development buyers) while more long term financing measures are put in place. Bridging finance has higher interest rates than the mortgage or development finance package, and is typically used to stake a claim on a property before it’s gazumped by someone else.

Bridging finance doesn’t get lent based on credit and is available in as little as 24 hours. Good news for the company or individual who knows that it, he or she is in a position to get proper financing arranged in the long term, and who doesn’t want to miss out securing this particular opportunity in the short term.

Unlike some other short term loans, bridging finance also offers the option of rolling out interest payments to the end of the term – so you make repayments with non interest and then do the interest in the last instalment.

All of which suggests that, while you’re putting your business loan quotes in order, bridging finance may be the product for you.

As with all financial products, of course, you should be sure that you are buying into the right one – and that you have the means to pay within the term arranged. Start rolling a bridging loan beyond the term agreed and your estimation of the amount you owe can quickly get out of hand.

What Are the Advantages of Bridging Finance?

The basic advantage of the bridging loan is its speed – and the speed is a function of the fact that it requires far less scrutiny of your credit history than full business loan quotes, So while it makes perfect sense to get a foot onto your property now, while those business loan quotes are being put together, it can be a recipe for some pretty inadvisable behaviour.

The amounts lent in bridging finance situations are usually $50,000 or more – so obviously if you get this kind of money with little or no credit check, and you can’t pay it back, you can end up in serious trouble. Be aware, with this product particularly, that knowing your own financial circumstances and being honest about them is of paramount importance.

Many mortgages these days incur a pretty massive first payment – which the ordinary borrower may not be able to cover. Where your business loan quotes involve one or two major payments at the start of the loan term, a bridging loan may be the answer – the bridging loan pays the extra and you don’t notice the difference so much. This is normally only approved where the loan repayments on your business finance go down significantly prior to the end of the bridging finance term.

The bridging loan is typically available at up to 80% of the market value of the property you are buying. In some cases this can be raised to 100%, if for example you have bought the property for less than it is worth, or if you have other security to offer.

If you liked ‘The Benefits of Bridging Finance for Property Purchase‘, then you may also enjoy other articles about real estate investing available at http://REIMaverick.com

What is the difference between a short sale and a foreclosure?

Foreclosure – A foreclosure is something the lender seeks when a homeowner is behind on their payments on a mortgage. It does show up as an adverse mark on the credit of the homeowner.

Short Sale – Short sales are basically an agreement between the homeowner and the mortgage lender to sell the house for less than what is owed. Most cases involve the homeowner having to prove they have a financial hardship that affects their ability to pay the mortgage.

The short sale is a better alternative than foreclosure.

Banks that hold mortgages are more likely to accept a short sale over foreclosure because it is less paperwork for them and most of the time it is more valuable to both the bank and the homeowner. It is also better for the real estate market over the other option of foreclosure which can adversely affect the value of not just a piece of property, but the whole neighborhood where these houses are located.

According to the National Association of Consumer Advocates, more short sales is actually a good thing, or at least better than a foreclosure.  Distressed houses sell quicker, which will allow the shadow inventory to diminish and the housing market to recover quicker.  The downside is that the homeowner will still have their credit harmed and may face tax consequences or deficiency judgments against them from the banks.

Being able to sell a house with little, no, or even negative equity without a short sale is the best way to avoid foreclosure, but if the negative equity is too much, then utilizing a short sale is better than allowing the house to slip into foreclosure.

According to RealtyTrac’s data reporting the key states where short sales were common included Florida, Arizona and California along with nine others. Additionally, lenders tend to be more aggressive with their short sale pricing according to RealtyTrac’s information. The drop in pricing was about 10% less than just the previous year.

Bank of America had 107,000 short sales in the last year which double from the 2009 model. A boost in Short sales is highly possible in many states which will mean more decreases in foreclosure according to a Florida foreclosure defense attorney.

If you liked ‘Short Sales On the Rise In the Housing Market‘, then you may also enjoy other articles about real estate written by Phill Grove at http://REIMaverick.com.

Real Estate Investing

The key to solid real estate investing lies in the teacher and thats why you should probably go with a teacher that has proven experience in the field and if you’re a beginner, novice, or even seasoned vet, Phill Grove’s “All In One Done for You Real Estate” unlocks years of knowledge from a man that can literally close a short sale in 4 hours or less.  This is from the real estate investing guru that actually was involved in over 1,000 short sales over the span of just a few years.

So here’s a sneak peek into some of Phill’s “All In One Done For You Real Estate” investing tips:

Real Estate Investing: All In One Done For You Real Estate | Free Marketing

Where so many real estate investing beginners fail is in the marketing field.  You have to market yourself correctly and remain consistent.  Not only that, a common misconception in the real estate field is that marketing is very expensive.

Here are some free real estate marketing techniques that Phill Grove is teaching in his “All In One Done For You Real Estate Course“:

1. Professional Referrals
2. Networking
3. REOs & HUD Foreclosures
4. Social Media
5. Blogs/Curation
6. Search Engine Optimization
7. Local Search Advertising
8. Website
9. Bulk REOs
10. Past Customer Referrals

Sure there are other marketing techniques that of course you have to pay for and Phill Grove will go over that in his real estate investing course as well.  The thing to remember is that you don’t necessarily have to be rich to get into the market.

Real Estate Investing: All In One Done For You Real Estate | Training Videos

Phill Grove is also offering student’s access to his 65 exclusive training videos that will help them find deals!  This is priceless and sure to bring you a lot of success.  Basically by taking this real estate investing course, you’re bypassing years of experience and education.  This would also help quite a lot with how to make bandit signs that attract buyers and internet marketing techniques.

Real Estate Investing: All In One Done For You Real Estate | Strategy

What kind of strategies can you expect to learn about real estate investing from the “All In One Done For Your Real Estate” course?  Take a look at some of these top strategies offered by Phill Grove:

1. Wholesaling
2. Buying Subject To
3. Equity Partnering
4. Buy & Hold
5. Mortgage Payment Assignment

There are 8 more strategies that Phlll goes into detail with in the course.  Not to mention if there are any skeptics out there, Phill has plenty of case studies available for viewing not only from within the course, but also if you visit his YouTube page.

Real Estate Investing: All In One Done For You Real Estate | Conclusion

If you aren’t yet convinced, then check this out:

Beginning Real Estate: All In One Done For You Real Estate

Its important when beginning real estate deals to make sure that you have a coach that can teach you the tricks of the trade, thats why Phill Grove’s “All In One Done For You Real Estate” is a great shortcut into the world of real estate.  Why you ask?  Well before we go into more detail, its first important to note that Phill Grove, your future real estate coach, has done over 1,000 short sales in a very short amount of time, no pun intended.

Phill Grove’s new program wishes to teach you how to do deals in 4 hours or less, which is what Phill has been doing for years.

Beginning Real Estate: All In One Done For You Real Estate | 12 Services

If you’re beginning real estate this “All in One Done for You Real Estate” may seem a little hard to believe, however Phill Grove is all about the “hand’s off” approach.  This is why even when he was beginning real estate deals he used these 12 services that are now available to you:

1.  Done-For-You Lead-Generation — A team of lead-gen experts
who will find highly-qualified buyer and seller leads for you…
and email those leads to you.

2.  Done-For-You LIVE Sales People — (this is a historic first!)
You get experienced “investor salespeople” who will call your
leads… and negotiate and close your deals for you.

3.  Done-For-You Lead Follow-Up — automatically follows-up on
your unconverted leads.

4.  Done-For-You Fully-Functioning Websites — buyer and seller
sites completely set-up for you (another way you will receive
leads).

5.  Done-For-You Deals — includes access to over 1,000 non-MLS
wholesale deals that include financing. Plus, there are
currently over 700 non-MLS seller-financed deals with assumable
loans. These deals are in all parts of the country and can be
seen (and put under contract) on a special site I had
created. You can literally have your first deal next week!

6.  Done-For-You Strategy Selection Scoreboard (SSS) — this
“Scoreboard” analyzes each one of your leads and then tells you
(or your assigned Salesperson) which investing strategy you
should use (out of 12 potential investing strategies).

7.  Done-For-You Contracts & Paperwork — all paperwork
completely filled out and printed for you (fully customized for
your buyer, seller, and the particular investing strategy).

8.  Done-For-You Syndication — once you (or someone on the Live
Sales Team) get a deal under contract, that deal will be
automatically submitted to and advertised on over 250 websites.

9.  Done-For-You Partner Network — This is a Network of over
5,000 investors from around the country who are looking to
partner on deals that you can partner with…

10.  Done-For-You Closing Department — all your deals closed for
you. The Closing Department coordinates with the buyer, seller
and oversees the entire closing process from start to finish –
including completing all the necessary paperwork.

11.  Done-For-You Bank Deposits — each time you close a deal
because of the services above, the Closing Department will have
the money wire transferred into your bank account.

12.  Done-For-You LIVE Coaching — live weekly coaching calls
with me who will help you on any aspect of your REI
business, or deals you are working on.

Beginning Real Estate: All In One Done For You Real Estate | Conclusion

This is the first time that Phill Grove is making his strategies available to the public, so you won’t want to miss out.  Still skeptical?  Stay tune for more updates on the program and the meantime check out some of REIMaverick’s beginning real estate articles on this website.

Let us know if you have any questions and if you liked “Beginning Real Estate: All In One Done For You Real Estate,” then be sure to check out more at http://www.REIMaverick.com.

Will principal forgiveness help the housing market?

While speaking at the Brookings institute, the director of the FHFA, Edward DeMarco, indicated measures involving principal forgiveness as a way to avoid foreclosure might be implemented within the next couple weeks. This decision for principal forgiveness by the Federal Housing Finance Agency has mainly been prompted by pressure that Freddie Mac and Fannie Mae have been subjected to given the fact that they either own or guarantee 60% of all loans in America.

In the past, studies have pointed out that when it comes to effective measures in avoiding foreclosure, principal forgiveness or forgiving mortgage debt wasn’t shown to be any more effective than loan modifications. In addition, since Freddie Mac and Fannie Mae have been under government supervision since 2008, principal forgiveness could end up costing taxpayers an excessive amount of money.

What has placed principal forgiveness back on the table are incentives provided by the Treasury Department. A recent assessment has shown that Freddie Mac and Fannie Mae could reduce their losses by almost $10 billion if they could get 700,000 homeowners to accept principal forgiveness.

DeMarco, however, suggested the principal forgiveness would only act on the margin when it comes to the current housing crisis. This is evident by the fact that there a CoreLogic report showed that an estimated 11 million homeowners owe more on their homes than their home’s current value.

He also went on to say that this initiative could have negative impacts as many homeowners may try to stop paying their mortgage in order to have a portion of their principal forgiven. This chain reaction could in essence, eliminate any benefits that Freddie Mac and Fannie Mae would potentially see from this program.

There is little doubt, as Laurie Gooman, senor managing director of Amherst Securities puts it, that principal reduction is becoming a more ‘politically’ popular as a way to prevent foreclosure. This is evident in the $25 billion mortgage settlement between the government and five large banks. This settlement requires these mortgage lenders offer up to $10 billion in principal reductions. In addition, these reductions are outside of the scope of Freddie Mac or Fannie Mae.

Proponents say that principal forgiveness will help stabilize the housing market by avoiding future foreclosures. Because DeMarko is under extreme pressure from the Obama administration, his discussion of principal forgiveness is an indication that all options are on the table

If you liked ‘Will Principal Forgiveness Help or Hurt the Housing Market?‘, then you may also enjoy other articles about real estate investing written by Phill Grove at http://REIMaverick.com.

http://www.photoexit.com/wp-content/uploads/2010/09/living-room-decorating-ideas-1.jpg

I really love the rustic, yet elegant feel you get from the simple wood wire frame chair and the low sleek mantle.

http://aboutproject.com/wp-content/uploads/2011/10/modern-living-room-interior-02.jpg

Everything about this living room is classy and modern, but that chair looks like it belongs on the porch.

http://www.deckay-banjarsari.co.cc/2010_02_01_archive.html

Open kitchens, sunrooms, and light colors really suit coastal homes.

Rooftoop Terrace Living Room

 http://www.hometrendesign.com/traditional-house-in-singapore-but-used-modern-interior-design-by-ong-ong

This is a living room in a rooftop terrace apartment in Singapore.  Can I appreciate it?  Yes.  Is it going in my house?  Probably not.

I’m Phill Grove and I’m in real estate investing.  If we have similar tastes, be sure to “Pin” my pictures and better yet check out all of my Pinterest boards.

Has the housing market hit the bottom yet?

Jobs and the housing market are two significant factors in economic recovery. The job market has shown slight signs of improvement but real estate prices have continued to drop. This trend is troublesome because while housing effects GDP, it’s an indicator of personal wealth. When home prices escalate, wealth increases and that leads to more confidence in the economy. With no economic signs indicating any types of improvement in the housing market, things look somewhat grim.

This is why experts have been concerned with lowering home values. They have been eagerly awaiting either government involvement in housing market issues or the time when the market would hit bottom and begin inching upwards.

Are we at the Housing Bottom Yet?

However, a few reports that have surfaced have led many analysts to be optimistic that the bottom has been reached.  In a report from Zillow Inc., prices, while in decline since the beginning of 2012, showed an increase in the month of March. This has led Zillow to predict that the housing market will bottom either by late 2012 or early 2013.

In addition, Zillow indicated that in larger markets, where prices have reach bottom, increased rental costs and lower mortgages are contributing to stabilizing housing prices. This should help the housing market to find its footing.

The second report was from the National Association of Realtors Pending Sales Index. This predicted a jump in contract signing of around 4% in the month of March. This brought contract signings to a yearly total to 101.4%. Anything over 100% indicates a robust housing market. Add to that the fact that first-quarter closings of homes were higher than they’ve been in the last five years.

The question is, does this mean the housing market has reached bottom. While it’s possible, housing experts have heard this before. So there’s reason to be skeptical.

Financial columnist Barry Rithotz had this to say about why the housing market hasn’t hit rock bottom. While he points to many things, he sites 4 reasons why it hasn’t happened yet.

• There is still too massive of a backlog of homes in foreclosure.
• With high unemployment and tightening lending practices, buyers can’t obtain mortgages to buy homes.
• With no income growth, consumers are unable to increase their spending and aren’t buying homes.

Homes, like other commodities, don’t simply stabilize. A big fall usually means a slide into worse than predicted territory. All the housing aid in the world wouldn’t stop this from happening.

While experts would judge the housing market from a price standpoint as being fair, it’s likely things will get much cheaper in order to get consumers back into buying homes.

Some people feel that the Rithotz analysis of the housing market is simply too negative. While that may be true, virtually everyone has said the housing market has hit bottom and they’ve all been wrong. It’s also important to remember that even if the housing market has reached bottom, there’s no guarantee prices will increase immediately. Unemployment issues may be a significant drag on the housing market going forward.

Photo source: http://immobilienblasen.blogspot.com/2008_08_01_archive.html

If you liked ‘Mortgage Aid Program and the Housing Bottom’, then you may also enjoy other articles written by Phill Grove, the REI Maverick.

Tips on how to payoff your mortgage early

Many people think the only way to save money on a mortgage is by choosing the right one in the first place. Au contraire! It is what you do after the initial choosing that can make the real difference between you paying thousands of needless dollars or becoming a savvy saver who takes home far more cash at the end of the day.

So, what are the tricks that will help you become a mortgage champ?

Switch to rapid repayments

A rapid repayment of your costs on an average mortgage (around $300,000, amortized over 25 years) would save you $19,887 in interest and would slice two years from your mortgage (based on an interest rate at 3.52%). Don’t believe me? Fine, but at least check on a mortgage calculator.

Bi-weekly repayments cut your monthly bill in two, so you pay every other week. If you add the value of this together, you would make one full extra payment each year. This leads to massive savings on interest. Result!

Make lump sum payments

Take a look at this math: if you made lump sum payments a year on our average mortgage ($300,000, amortized over 25 years remember), you would make savings of a whopping $10,747 in interest, PLUS a year off your mortgage.

The good news keeps coming, right?

Ok, now obviously everyone has different budgets and £1,000 is hugely more valuable to some than other, but think of it this way: $83.50 a month is the equivalent of cutting back on 17 lattes in 30 days. Whatever your budget, make sure you work out your personal expenses and put aside what you can afford. And if you get tempted to splash out, just remind yourself of those huge benefits in the long term.

Do NOT sign your mortgage renewal letter

Now this is an easy one to save on. But still, about 40% of Canadian homeowners fail to do it. Now I know it seems like the easy way out – a letter comes through your door and you’ve hardly even thinking about your renewal; you have a lot on your plate and just fancy getting it sorted, so you sign and return. Big mistake. What a lot of people don’t know is that banks will NEVER give you the best rate straight off the bat.

You might want to stick with your current lender. That’s fine but make certain you negotiate the rate at least. But consider other lenders. Use comparison sites to compare the market and find the best rates. If your lender can’t match the prices of a competitor, why even think about jumping ship?

Compare mortgage rates

Here’s a truth for you: those who make the effort to compare mortgage rates result in saving themselves big money. Users of one particular website save an average of 72 basis points (0.72%) on their mortgage, compared to those who went for the big five banks’ discounted rates.

This means rate comparison site users would gain savings of $35,000 in interest over the course of our average mortgage example ($300,000 amortized over 25 years).

So there you have it – four ways to knock your mortgage out. It’s down to you – you’re in the ring, the lights are on you – time to pull your combinations and feel like a champ!

Will the Faster Short Sale Process Lead to More Underwater Homes?

The skills and benefits of negotiation and compromise seem to have been forgotten in the 21st century, and that’s a shame. These are exactly the skills that could be used to solve many of our collective present day economic problems, and this broad statement can be applied to a number of fields, the hard-hit real estate industry being just one example. In fact, strange as it sounds, now may be an ideal time to learn sound principles of real estate investing for beginnersin today’s market. There are several simultaneously occurring factors at work here:

First, there is little doubt among industry experts that the rate of foreclosures, which was stalled during the litigation of the ‘robo-signing’ fracas, will increase again now that most major lenders have settled. In fact, some predict a ‘flood’ of new foreclosures, which can’t be a good trend for anyone. At the same time, the short sale process, which was always sluggish at best, has become mired down in lenders’ own red tape.

As things stand now, the process of obtaining lender approval for ‘short sale’ transactions has been taking so long a time period that viable deals have been breaking down before closing. For some time, it has been apparent to experts that something needed to be done to cause the Short Sale Process To Get Faster, and now action has actually been taken. To alleviate this financial log jam, the Federal Housing Finance Agency has enacted a new set of ‘guidelines‘ that will take effect on June 1st. These new rules will help ensure that lenders answer requests for short sale transactions within 30 days, and issue a final approval or denial within 60 days, or twice that time period.

These events are occurring at the same time that the Housing Affordability Index is at an all time high, which is a fancy way of saying that median-priced houses are very affordable for median-income families, if they can only get financing. Many families can’t, because banks have so much capital tied up in mortgages turning sour that they are becoming their own worst enemies. (Whether they know it or not, lenders have as much to gain as anyone else by allowing the Short Sale Process To Get Faster.)

Short Sale Process To Get Faster | The Fallout

The good news is that the shortening of this process will allow the housing market to finally hit bottom so the correction can begin.  The tough news is that in the meantime, housing prices will continue to drop and banks will continue to make it more difficult to obtain financing.  These two combinations will make traditional real estate methods very difficult.

So what should beginning real estate investors do in the meantime?  Understand the problems facing both sides in a real estate transaction and develop a solution.

Problems:  There will be more sellers selling their houses with little, no, or negative equity that can’t afford to come out of pocket to pay for the note deficiencies or the closing costs.  These ‘unsellable’ houses will lead to more foreclosures, thus the downward spiral of the housing market continues.  There will also be more buyers who want to purchase houses but cannot obtain a bank loan.  These ‘unloanable’ buyers would be good buyers in past economies, but due to very high credit standards and the requirement to have a W2 job, many good buyers are eliminated in this market.

Solution:  Real estate professionals who can match up sellers with ‘unsellable’ houses with ‘unloanable’ buyers who want to buy a house will have great success in this down market.  Utilizing the assignment of mortgage payments strategy, which is a combinations of wholesaling, subject-to, and wrap around mortgages, will allow more real estate transactions to occur at market price.  The more market prices transactions that occur, the quicker the housing market gets back on its feet again.  For more information on the assignment of mortgage payments system, please watch this video on AMPS.

In conclusion, after June 1, 2012, we can expect the Short Sale Process To Get Faster, and that we will hear much more about it. The time for people of business acumen to learn about it, however, is right now. Future opportunities don’t wait around hoping to be noticed.

If you liked ‘New Regulations Will Shorten the Short Sale Process ‘, then you may also enjoy other articles about short sales written by Phill Grove at http://REIMaverick.com.