British Columbia, Canada -- (SBWIRE) -- 04/26/2013 -- In 2005, real estate investors were the darlings of banks and mortgage companies offering "no income", "no asset" loans for almost anyone who had an investment property that needed funding.
Roll ahead to 2013….
Today, banks will only fund real estate investors who have near-perfect credit ratings and large down payments. Few real estate investors qualify under bank and mortgage company stringent underwriting guidelines. Real estate investors, however, have helped banks solve a big problem--a glut of bank owned property inventory. Real estate investors are buying bank owned and government owned properties. Known as "REO" properties, or "real estate owned", these properties are on the banks books as a result of the tsunami of foreclosures occurring in the aftermath of the Greenspan era of relaxed mortgage credit requirements. Real estate investors have been taking these properties off the banks hands and helping the banks, mortgage companies, and government agencies to get these REO properties off their books. Even so, the banks and mortgage companies are still carrying millions of properties in a "shadow inventory" which includes properties that have not been listed for sale. Real estate investors have been able to cash in on these investment REO properties by purchasing them from banks for pennies-on-the dollar. It is common for real estate investors to purchase these properties for 50% to 65% of the market value and sometimes for even a fraction of that value.
Real estate investors have discovered a new way to get financing for their buy and sell, fix and flip, and buy and hold deals-- private hard money lenders. Different than banks, these private hard money lenders are asset lenders. The loans provided to real estate investors by private hard money lenders are based on the value of the property rather than the investor's credit, income, or assets. These private hard money lenders and bridge lenders can fund virtually any type of non-owner occupied residential property or commercial income property. Some of these lenders loan investors up to 100% of the purchase price. Hard money rehab lenders loan investors money based on the "after-repair-value" of the property which means that the private hard money lender is able to lend enough money for the investor to purchase the property and even include the rehab costs in the loan. The investor then purchases the REO property by using the money from the private hard money lender and within a month the property has been rehabbed and is on the market for resale to a homeowner. These properties that need to be rehabbed can then be purchased by homeowners who don't have to be involved with property repairs. The property is ready to occupy so it is a perfect match for the first-time homebuyer. Banks and mortgage companies finance the homebuyers with a traditional 30 year mortgage. When the deal closes, the real estate investor then repays the private hard money lender and pockets the profit from the sale of the property.
In 2006, http://www.OPMCredit.com began offering resources to real estate investors who were seeking funding for non-owner occupied residential and commercial income property. At that time, investors had few alternatives because bank funding for investors had dried up. Because of that, a new resource was created for real estate investors which detailed the lender programs of more than 290 private hard money lenders and bridge lenders who loan nationally, regionally, and locally for investment property. The resource is called the Private Money Lenders Source. Real estate investors for the first time had a variety of lender program options and were able to match their deals to the lender programs. Real estate investor, Diane Hilliard, who began using www.OPMCredit.com resources including the Private Money Lenders Source in 2010, said "I did not realize that I can actually buy these properties from "long distance" and make offers initiating a phone call, emailing and even make offers via fax… We are rehabbing a 3-2-2 w/sunroom and other amenities."
Eight years later, thousands of real estate investors across the country use the resource and each year, OPMCredit.com publishes a new, updated edition detailing approximately 300 lender programs. Almost ten thousand real estate investors subscribe to the OPMCredit.com daily newsletter to learn about new resources and investor techniques and strategies for getting deals funded with private hard money.
According to RealtyTrac, investors flipped almost 100,000 homes during the first half of 2012, averaging almost $30,000 profit per flip, including rehab property deals. That is almost $3-BILLION in profits for these investors, just in the first half of the year. That means that private hard money lenders funded billions-of-dollars of deals for real estate investors.
In 2006, http://www.OPMCredit.com began publishing the copyrighted Private Money Lenders Source. Since that time, additional resources have been developed including Hard Money Loan Blueprint, and the Ultimate REO Report. The resources are for real estate investors using private hard money lender and bridge lender funding for non-owner occupied residential investment property and commercial income property.
Gary Zaccaria, Private Hard Money Lenders Funding Consultant, Newsletter Author
Private Money Lenders Source
Vancouver, British Columbia