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? Flipping real estate can give you an income with little credit investigation.
? Section 8 tenants can keep your income property 100 percent filled.
? Always try to mortgage out—it’s the premier creative financing technique.
Find and Use Unique and Unusual Funding Sources
Your whole key to getting rich on borrowed money (OPM) in real estate is finding suitable lenders. In this chapter, you’ll learn how and where you can find suitable lenders for your real estate projects.
Sure Steps to Finding Your Suitable Lenders
You can get better results—sooner—in your search for real estate money—if you follow a proven procedure. “And what’s that procedure?” you ask. Here it is, in seven simple—and lucky—steps for you:
1. Decide what type of real estate you want to own. At the start, it is best to specialize in just one type of real estate. Why? Because then you don’t scatter your efforts or energy.
2. Search in your area for the type of real estate you want to own. Earlier chapters tell you where to conduct your search. if you can’t decide, give me a call and i’ll help you on the phone.
3. Get full data on projects that interest you. You’ll need the Price, the Income, the Expenses, and the Down Payment.
4. Focus on one project that appeals to you. Don’t try to juggle three or four at once. it will boggle your mind and you’ll give up—confused. (And please don’t send me four or six projects to evaluate at one time! I’m just one skinny little guy and I can only think of one project at a time!)
5. Determine how much money you need to take over the project.
Remember: Your first mortgage is usually easier to get than your down payment money. Buy if your credit isn’t the strongest, your first mortgage may be harder to get than you expect at the start.
6. Look for your money in two places: long-term lenders for your first mortgage; short-term lenders for your down payment money.
7. Take the action needed to get each loan so you can close on the property and start earning money from it. That—remember— is the whole idea of your work—to earn money for yourself and your loved ones!
Pick the Type of Real Estate You Want to Own
You must know what kind of real estate you want to own. “Why?” you ask. Because for each type of real estate:
• There are specialized and unique lenders.
• Who know and specialize in one type of real estate.
• Making loans on that kind of real estate almost daily.
• Giving advice and help to borrowers who come to them.
• Understanding the ins and outs of that type of real estate.
• Being more willing to make loans on “their” type of property.
So if you know what type of real estate you want to own to build your fortune, you can approach a lender who specializes in that type of real estate. There are four basic types of real estate you can own for income purposes:
1. Land for development or leasing to others.
2. Residential properties—single- or multi-family.
3. Commercial properties—stores (strip malls and shopping malls), offices, recreational facilities.
4. Industrial properties—factories, storage buildings, and yards.
Most of my readers already know what type of real estate they want to own when they call or write me. I’m sure that right now you have a
Find and Use Unique and Unusual Funding Sources
good idea of what type of real estate you’d like to own. So let’s get you your lenders!
Find the Unique Lender for Your Kind of Real Estate
For every kind of real estate, there’s a group of lenders that specialize in handling loans for that kind of property. And—also—for every kind of real estate, there are a few unique and unusual lenders.
Your job is to find both types of lenders. And I’m here to help you every step of the way in finding those lenders. For example:
If you want to own raw land for development or leasing purposes, you’ll find there are fewer lenders who’ll work with you than with other types of real estate. Why is this? Because raw land—in general—does not produce income. So lenders rate raw land as a non-income producing asset. Hence, they’re less likely to lend you money for it. Yet there are some lenders that like raw land as a loan asset.
Finding suitable lenders can be highly rewarding for you. Why? Because once you find a suitable lender and do a deal, the next deal becomes much easier. So, too, for follow-up deals with that lender. Thus, your efforts are rewarded—again and again.
How to Find Unique Lenders for Land Deals
Few lenders specialize in land deals. So you have a real challenge in finding such lenders. When you want to buy raw land, look at these loan sources:
• The seller—many sellers will finance their land sale, asking for little down payment-sometimes as little as just $100.
• Government sellers—state and federal governments sometimes offer land for as little as $1 per acre—with no financing charges. And if you buy large amounts of this land—several thousand