Archive for December, 2012

HomeVestors Knows How Profitable Commercial Properties Can Be

Tuesday, December 18th, 2012

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Commercial property, while riskier, equates to extremely high profits if located in a profitable section of town.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that commercial real estate investing may seem a little intimidating for small scale or beginner investors and there are quite a few good reasons for this. It is a much riskier kind of venture than investing in single-family units. To begin with, commercial properties are much more expensive and hence funding is difficult to obtain. In addition, there are more responsibilities involved in managing commercial properties and the potential to get sued is a lot higher. These risks however, are dwarfed in comparison with their potential returns and numerous tax exemptions. An investor, who has been in the business for a while and has accumulated an appreciable amount of revenue, may consider this lucrative investment. Use the following guidelines to make the whole venture considerably easier.

The first thing to take into account when considering commercial real estate investing is financing. Besides ensuring that one has the financial and credit backing to qualify for a loan to purchase commercial property, an investor should research the property for qualities that would improve the chances of the loan being approved. Lenders who fund the purchase of such properties would want to be assured that it already generates cash flow as a means of guaranteeing that an investor would be able to make their payments.

Other things an investor would have to look out for in ensuring that a piece of commercial property is going to be not just profitable, but manageable as well, include its’ vacancy rate and location. A good commercial investment property needs to have a low vacancy rate. The tenants should be reliable businesses or individuals, who pay their rents on time. This means the delinquency and eviction rates would have to be extremely low. The property would also be the type that is so popular among the public that it continues to succeed. A good piece of commercial property has to be well located and in a part of town that the average person is comfortable living and doing business in.

Success in commercial real estate investing really all comes down to the ability of an investor to find property that has potential. This means the property must generate cash flow, enough to keep the lender’s payments coming in while an investor gets something in their pocket at the end of each month. An investor with leverage potential, who takes the time to research the market and locate property with potential, sets themselves up for commercial real estate success.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

HomeVestors Knows That REITs Are A Great Long-Term Investment

Monday, December 17th, 2012

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Investors should consider adding REITs to diversify their portfolio and obtain long-term gains that are typical with this type of investment.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that conventionally held wisdom entertains the idea that investing in the stock market, in spite of frequent bumps along the way, leads to long-term positive returns as long as a competent investment manager manages those funds. This view was severely shaken during the 2008 stock market crash that accompanied the housing market crash, as a result, many investors saw dramatic slashes in the values of their portfolios. Although the markets have more or less recovered from that shock, it is nevertheless a good idea to look beyond Wall Street for safer investment vehicles. Investing in REITs is generally a safer option because they have proven to be effective at holding value and yielding positive returns over the long term.

REITs are to the real estate market, what stocks and bonds are to Wall Street. They constitute pooled funds from various investors, dedicated towards real estate investments. Just like stocks and bonds, they are publicly traded. What makes them attractive is that by law, they are required to have no less than 90% of their earnings paid out as dividends to the contributing investors. They are also expertly managed, giving investors a reason to be confident about putting their money into them. Over the past few years, investing in REITs has shown to be a better option then investing in stocks and bonds.

Using the S&P index as a model for the stock market, it is very clear to see why REITs make for better investment vehicles. From a long-term point of view, investing in REITs has consistently led to higher returns compared to the S&P. REIT dividends which constitute the majority of income earned by REIT investors, generate a generous 3.5% average return which shines compared to the S&P’s 2% or the 10 year T-note’s mere 1.5%. In addition, REIT dividends are enjoying an annual 4 to 6% growth rate and are expected to rise with an interest rate increase. REIT investments also offer excellent protections against inflation, something that stock market investments lack. General rises in the price index are normally accompanied by rent increases as well, which serve as cushions for commercial real estate investments and hence REITs.

Investing in REITs has become an almost indispensable activity for many investors and a wise investor should consider REITs as a part of their portfolio. This doesn’t mean that they should divert their entire portfolio towards REITs. For one thing, REIT earnings are taxed as normal income, unlike stock market investments that are taxed at just 15%. Experts recommend that some 5 to 15% of an investor’s portfolio go towards REITs.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

How Much Experience Does One Need To Be Successful With HomeVestors?

Wednesday, December 12th, 2012

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How many years of real estate business experience do most HomeVestors franchise owners have before starting with HomeVestors?

When an investor decides to pursue a HomeVestors franchise, they are trained with a two-week instructional course where they have the services of a personal coach, an exclusive territory, and HomeVestors’ analytic software that helps them determine the profitability of specific real estate investments. In addition, franchisees gain access to a ready market of retail investors who have networked with HomeVestors. These are all designed to grant franchisees the luxury of purchasing properties at discounts, sometimes as low as sixty-five cents on the dollar.

This business model does all the groundwork for investors, negating the need for years of experience that it takes to become a successful real estate investor. As a result, most investors who become HomeVestors franchisees are new to the real estate business. Therefore, don’t be intimidated by a lack of experience,HomeVestors will walk you through the process.

It’s little wonder that the average number of years of experience in real estate investing among investors who franchise with HomeVestors is close to zero. HomeVestors is set up for investors to start making money immediately because other experienced investors have all the ground work laid out for them, only requiring franchisees to make basic decisions.

How long does it usually take to start? How long does it take to turn a profit?

One of the most attractive aspects of owning a HomeVestors franchise is not just the profit potential, but how rapidly the profits start flowing in. Getting started should be the easiest part. HomeVestors makes it rather easy for its’ franchisees to take off on the right path. Franchisees are well prepped by the time they start and have access to a great deal of professional assistance. As a result, following up on leads and making the first purchase is quite simple.

Most HomeVestors franchises become profitable after making their first purchase. The degree of profitability depends on a few factors. One of the most important factors is dependent on reducing overhead costs. Franchisees need to have the necessary funds to cover the cost of purchasing and rehabbing a property. If any cost cutting measures can be employed it would prove useful in bolstering profitability. The lower the overall overhead costs, the greater the chance that a franchisee would make a quick and handsome profit.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

HomeVestors KnowsThat It Is A Great Time To Invest In Real Estate

Monday, December 10th, 2012

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Studies are pointing to 2013 as a great time to invest in real estate because prices have begun to stabilize.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that the air seems to be filled with good tides regarding the prospects of real estate investing in 2013. Demand is slowly catching up with supply, leading to a gradual reduction of inventories, and the rate of new foreclosure cases is decelerating. These are all indicators of a housing market that is on the verge of hitting rock bottom. If the numbers are right according to Fitch Ratings, this historical event is projected to happen towards the end of 2013. There couldn’t be a better time for investors to start buying because soon these deals will be a thing of the past.

There have been figures that have been trickling in throughout the year to support the rock bottom hypothesis. According to the National Association of Realtor’s quarterly report, real estate prices rose in 74 out of 146 major metropolises in the first quarter of 2012. This was a dramatic surge considering that real estate prices only rose in 29 out of the 146 in the last quarter of 2011. The same report showed that inventory supplies shrunk by 22% in the first quarter of this year compared to a year ago. This evidence further bolsters the case for a market where real estate prices are stabilizing.

Still not convinced? Well consider this report from Fiserve that shows a dramatic rise in real estate values since the worst days of the real estate crash in 5 of the most hard hit cities during the market bust (Merced Ca, Napa Ca, Daytona Fl, Ocala Fl, and Vero beach Fl). According to the report, Merced led the pack with an impressive 10% rise in real estate values, closely followed by Napa registering 9.7%. Ocala scored 9.1%, Daytona 8.8%, and Vero Beach 8.1%. These local markets should have stabilized this past summer and are expected to rise at an average of 4% per annum, for the next 5 years.

These numbers in themselves are not telling the whole story but should be enough in convincing an investor that real estate prices are stabilizing and better days are indeed ahead. The prospect of real estate investing in 2013 is rather promising. When taking into consideration the currently prevailing record low interest rates, a strong case can be made that now is the time to buy. From this point onwards, not only will prices seize to spiral downwards but interest rates will begin to rise

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

HomeVestors Knows How To Use Direct Mail Marketing To Obtain Leads

Monday, December 10th, 2012

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Direct mail marketing can be a great way to generate leads if they are specifically targeted and fresh.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that being a wholesale or a retail investor means dedicating a great deal of one’s time to being on the lookout for deals. Finding deals requires finding motivated sellers, sellers who have every reason to sell and move on. These include sellers who are trying to avoid foreclosure, those that are under pressure to sell because they have a new job out of town, and those who just want to leave the neighborhood. Finding motivated sellers has almost taken the form of an art as investors stop at nothing to find these people. One way to find motivated sellers is to prospect them by using direct mail. Effectively using direct mailing involves a lot more than just mailing postcards or letters to anyone who may seem to be a motivated seller. Without doing the homework that’s required to identify those truly motivated sellers, a direct mailing campaign may not yield a single lead.

So what kind of sources should an investor rely on to find these motivated sellers? There are companies out there that sell mailing lists, complete with names and addresses of people who fit the most common categories of motivated sellers. These lists are usually good sources for direct mailing when they are fresh. Investors have to make sure that their lists are not out dated and one way to ensure this would be to request a short sample list from any lead generator to try out before committing to purchasing. Most companies that are worth their salt wouldn’t mind doing this. An investor may also do the hard work by going down to the county registrar’s office and obtaining raw property tax data, which can be analyzed to identify possible motivated sellers.

It may not suffice to just send out one letter or postcard to each lead and hope for calls to come through. Persistence means everything here. It may take multiple rounds of mailings before an investor gets a substantial number of callbacks. Think about it, most people tend to feed the majority of the junk mail they get, directly to the shredder on impulse. However, if they keep getting the same mail from the same source over and over again, they might be tempted to inquire.

Lastly, the message has to be very precise and address a motivated seller’s specific needs to increase the likelihood of them responding to it. Investors should avoid using one generic message for all sellers. The sellers should rather, be placed in distinguishable categories and addressed accordingly. Sticking to this technique and the others mentioned above, makes direct mailing one of the most effective ways to generate useful leads.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

HomeVestors Knows How Valuable Commercial Property Will Be In 2013

Saturday, December 8th, 2012

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Investors should consider investing in commercial property in 2013, specifically in cities that are expected to increase in population.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that there have been bits and pieces of information that have been surfacing lately, suggesting that the housing market may finally be on the verge of a turn around. When it comes to specific subsets of the market, the most promising sector includes the commercial real estate sector. As predicted by PwC US and Urban Land Institute’s Emerging Trends in Real Estate Forecast for 2013, we shall continue to experience slight gains in commercial real estate with respect to leasing, rents and pricing. This prediction is based on a report compiled from interviewing close to a thousand experts in the business.

The same report reveals that retail, office and industrial real estate will all be expected to experience slight increases in occupancy as the jobless rate continues to dwindle. This will also be encouraged by the fact that fewer new construction projects are taking place.

Investors seeking to capitalize on these forecasts for 2013, should zoom their attention on these ten promising cities or regions, where the prospects of a commercial real estate boom are expected to be felt; San Francisco, New York City, San Jose, Boston, Houston, Seattle, Austin, Denver, Orange County, California and Dallas Ft. Worth.

In San Francisco, Silicon Valley continues to boom and to drive the city’s job outlook in a forward direction. In addition, the sophisticated mass transit system that has been developed as well as the accompanying pedestrian friendliness of the streets, present great investment incentives.

Next on the scale of importance is New York City, which looks promising with its’ growing healthcare and education industries, as well as its’ booming population rate. San Jose’s proximity to San Francisco, the world’s tech capital, has enabled it to experience an upsurge of its’ own technology industry, boasting 6,600 tech companies that employ 225,000 people. This represents a good quarter of the city’s entire population.

Austin, another city with a booming millennial population that will largely contribute to its 2.3% projected population increase in 2013, is expected to be the next most promising area for commercial property investing. The oil town of Houston continues to be a commercial hub and thanks to that, takes the number five spot on the list.

All over the nation, are similar stories of promising population, job, and income growth booms, all necessary ingredients for a thriving commercial real estate for the year ahead. Investors may consider putting some of their funds into commercial real estate, with all its promises for 2013.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

Investors – Take Advantage Of A Changing Market

Sunday, December 2nd, 2012

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Anyone who hasn’t been living in a cave these last few years, must be aware of how radically the housing market has changed. Even without ever switching on a radio dial or picking up the paper, it is very hard to go about without noticing the tell tale signs of the housing bust; vacated neighborhoods, and “bank owned” signs on lawns, just to name a few. Changing for the worse doesn’t always spell gloom and doom for investors. The most opportunistic investors know how to turn any bad situation around and make it work in their favor. Investing in today’s changing market requires investors to change course and adapt to the new rules.

As investors are concerned, the main difference between today’s market and the one that preceded it lies both in the availability of good deals, and the ease of selling. While it may be more difficult to sell for huge profits today, finding good deals is much easier. Successful investors today have become more efficient at buying at the lowest possible discounts because buying low is the surest way to minimize risks in a down market.

One of the characteristics of today’s market is slumping property values. The implication for investors is that, investment models like wholesaling and rehabbing are not as profitable at this time. Investors need to divert resources towards those investment models that don’t rely on property values appreciating by huge leaps within a short period of time. A rental property investment would be a favorable investment type in today’s market. Another favorable investment is commercial property for those investors who have the resources to invest in them.

The way real estate purchases are funded has also been revolutionized. Cheap access to credit is now a thing of the past as banks have introduced stricter rules to reduce the possibility of another round of mass defaults such as those that accompanied the housing bust. The crash in property values that resulted from this bust also means that the equity that property owners relied on for leveraging additional loans is no longer available. Investors finding themselves unable to qualify for traditional loans could take advantage of one of many alternative methods of funding, such as private lending. This shouldn’t be relied on for a long term investments because of their higher than average interest rates, and the lack of adequate regulation governing them.

At the end of the day, an investor who comes out on top, not just in today’s changing market but in any type of market undergoing a transition, is the one that is most flexible in diverting resources to more profitable investments. Such investors stay abreast with information regarding market trends, and always have an exit strategy in case something goes wrong.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Investors – Considering Public Auctions?

Sunday, December 2nd, 2012

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Investors on the prowl for deals, frequently wind up at public auctions in the hope of buying properties at discounts. Contrary to popular perceptions, buying at auctions doesn’t usually mean buying inexpensively. Auctions aren’t always teaming with discounted properties up for the pickings as so many tend to assume. Many houses that go on sale at auctions don’t have much equity in them and when they do, a crowd usually shows up. Without doing enough research about the properties they are bidding for, property purchased at an auction may turn out to be a cash sinkhole and not a cash generator as an investor might have hoped. That said, it is still possible to find great discounted properties at auctions which can potentially yield an investor handsome profits.

Even before going to the auction, a wise investor should do some research about the property they plan to bid on. They need to at the very least, drive to the property’s location to check it out for themselves and if possible ask for a showing. By physically checking out the property, they will have a better idea of any fix up costs. They should also carry out an independent appraisal to determine the house’s market value, especially if they plan to flip it. They should then make up their mind about the maximum bid they will be willing to offer. A title check should be carried out to make sure the title is lien free and that the seller or a trust representing the property is the legal titleholder.

On the actual day of the auction, an investor should arrive well on time, and be present at the auction venue before the auction is scheduled to start. Auctions don’t take a great deal of time,some last just a matter of minutes. An investor should show up with adequate certified funds, enough to pay the required payment, if they happen to win the bid. In some jurisdictions, only a certain percentage of the winning bid has to be paid on the spot, in others, the whole amount may be required. Once the bidding starts, it is important for an investor to relax and avoid engaging in a bidding war or end up bidding higher than the maximum they planned on paying.

Buying at auctions should never be regarded as the sole source of an investor’s purchases for the reasons we have just examined. This doesn’t mean that they should be avoided altogether. With good homework and due diligence, it is possible to find deals at auctions just like anywhere else. Auctions should remain an integral part of an investor’s sources of finding new deals.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Beginning Investors

Sunday, December 2nd, 2012

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For anyone looking to make their debut into a real estate investing career, the perceived challenges can be quite intimidating. It is essential for a beginning investor to prepare adequately in order to take on the challenges that will present themselves once they land that first deal.

Adequately preparing for a real estate investing career requires an in depth knowledge of how the business works, the best practices and access to reliable data. This means that a beginning investor would have to be extremely familiar with laws and regulations governing contracts, tax policies, and borrowing regulations. It would help to be familiar with market trends regarding the average demand, supply and market value of inventories, the average time that houses stay on an MLS, the percentage of listings that don’t sell and any other information that may be useful in gagging how the market is fairing.

This may require that an investor ally with a real estate agent who can supply them with sales information about current listings. For beginning investors who may be thinking about getting into flipping properties, knowledge about where to find the best deals and where to hire the best labor, will prove to be a game changer. It may be wise to include contractors in their network with whom they can start a long-term business relationship.

After having armed themselves with the knowledge that is necessary to get going, the next thing a beginning investor has to work out is a feasible plan for a profitable investment. A good plan must begin with determining what kind of investment to get into. This depends on what kind of resources they have access to. Certain types of real estate investments may not require as much starting capital, while others require massive amounts of capital and would be more appropriate for seasoned investors. Certain investments may require excellent marketing skills, while others may demand the skills of a good manager. A careful assessment of all these should guide an investor on where to start.

Building a great team of affiliates and partners is also a blueprint for success. Besides forming a partnership with an agent or contractors, a beginning investor would have to broaden their network to include a legal professional, and a few other professionals connected to the real estate market. It may be a good idea to find a mentor whom they can partner with and get some real world experience working alongside them. A real estate club is a great venue for getting introduced to and meeting such people.

By following these guidelines, a beginning investor better prepares themselves for the inevitable hurdles that lie in their way and greatly improves their chances of success.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Investors – Be Aware Of Title Seasoning Requirements

Sunday, December 2nd, 2012

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It’s easy to direct blame for the housing market bust at lenders but some investors had a hand in it as well. Before the bust, there was a practice that was common in the real estate business that was perpetuated by some unscrupulous flippers. These investors convinced naive buyers to sign inflated loans to purchase houses whose real market values were a lot less than their selling prices. This was usually done in cohorts with appraisers and loan brokers, who all financially benefited from this. As a result, with pressure from the federal government, lenders have imposed stricter requirements known as title seasoning requirements, to stamp out this sort of fraud.

Title season requirements aim at lengthening the time between purchasing a piece of property and selling it, with the ultimate goal of reducing mortgage fraud. The requirement as imposed by the FHA, requires lenders to only provide loans for the purchase of a house that has been owned by the previous owner for at least 90 days,in hopes of stoppingfraud. The hope is to crack down on properties whose selling prices are significantly higher than their purchase prices since these are the sort that are likely to be at the center of such fraudulent activities. In addition, transactions involving properties selling within 12 months of their purchase date for a price as little as 5% more than the purchase price, are also subject to lender review. The FHA requires lenders to demand documentation that justifies such a property’s appreciation in value especially if the buyer is not among the top tier of borrowers in terms of their credit score.

Another consequence of title seasoning is that most lenders will not provide a cash out refinance loan for any property that has been held by its current owner for less than 6 months. Those that do would rarely provide 100% of the amount asked for. This is particularly bad for investors who rely on private lenders to finance a fixer up operation. Private lenders charge very high interest rates and in order to avoid those huge rates while the property is still on the market, investors usually apply for a cash out refi to pay off the private lender. The interest rate on the refi loan would normally be much less than that charged by the private lender and hence, a cash out refi saves the investor some money. With such restrictions on cash out refinancing, relying on hard lenders to finance a fix and flip has become a challenge.

In essence, a few investors muddied the waters, as such, wholesale and retail investors operating in today’s market have to pay the price. Investors going into the market today, should be familiar with the most common restrictions they have to live by and take them into consideration as well as any alternatives, before venturing into wholesale or rehab investing.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.