Real Estate Investing Strategies: May 2009

Tuesday, May 26, 2009

How to Use Transactional Funding & Proof of Funds Letters in Real Estate Investment

If you are interested in purchasing Real Estate Owned (REO) or short sale properties, then you need to understand the basics of transactional funding and proof of funds letters and how they relate to your real estate interests and activities. Essentially, the transactional funding refers to the funds borrowed for a very short period to transfer a property from the current owner, to the transaction coordinator, then to the new owner. Proof of funds letters are used to help secure financing and smooth the way for the real estate transactions you are involved in.

Transactional Funding

The use of transactional funding allows the short sale process to take place smoothly. The basic premise for the loan is that once the original owner is ready to sell and the buyer is ready to take over the property (usually with a standard mortgage), there is a short term loan needed to faciliatate the transfer period. This means that the transactional funding is a loan that exists for just a few hours, before being recovered when the final property owner pays for the property.
The two separate transactions that place on the day of settlement create a unique situation known as a double closing. Lenders like these loans as the lending period is typically just several hours. If the transactional funding lender ensures that all the other financing for the transfer of the property is in place, this makes this short term loan delivers a relatively low risk opportunity for a profitable outcome from the provision of the short term loan.
Transactional funding works not only for the short sale scenario described above. A savvy investor can structure the use of a short term loan to easily carry out purchases of real estate owned (REO) properties, or any other real estate transaction that is based around a double closing.

Proof of Funds Letters

When purchasing property, the buyer must provide some form of evidence that they have the funds to cover the property acquisition - this is where a proof of funds letter becomes useful. This document that the investor can use to indicate to the parties involved in a real estate transaction that you have pre-qualified to purchase the real estate.

The proof of funds letters are used to demonstrate that investors have the financial resources or means to fund a property transaction. They indicate to the other parties that your funds are legitimate and can be used for the purchase of the property. This type of document is particularly useful if you are involved in short sale transactions and REO purchases that are structured with a double closing or when using transactional funding. They can also be used for other transactions that require documented evidence of your financial resources.
The proof of funds letter is generally provided as a bank, security or custody statement, stating that the investor or property buyer has funds for the real estate purchase that are obtainable and legitimate. Using this letter, the buyer/investor is able to secure any necessary additional funding or to assure the seller that they have the means to fund the real estate purchase.

To achieve success in real estate investment, it pays to fully understand the different options available to you and how to use them to maximum advantage. Transactional funding and the use of proof of funds letters are two added 'tools' in your investment toolkit. Once you understand how these financial opportunities can be used to the best advantage, you'll be on track to achieving financial security through real estate investment.

Saturday, May 23, 2009

How To Build a Buyers List

Here are some tips and resources that I use to build my buyers list.

Social networking sites:
Create profiles on these sites and network with other investors, join investor groups and include links to your web page.


Classified ad sites:
Post ads on these sites for investor specials, handyman specials, etc. You don't need to have a property currently under contract to do this. Include links to your webpage to join your buyers list.


Blog Sites:
Create a free blog using one of these free services and write about what's going on in your market and the great deals available. Include links to join your buyers list.

Local REI Club:
Go to the rei club meetings and network with other investors and collect and give out your business cards. You can then add these investors to your buyers list

Essential tool: Opt-in Form & Autoresponder

If you have a website or you're using a free blog service you need to have an opt-in form and autoresponder in place to be able to collect your buyers contact information and email them once you have a property under contract. The most simple service to use is aweber. You can use aweber to create a form and simply copy and paste that code in your website or blog to collect you buyer's information. You don't need any technical skills to do this as it's extremely simple. Aweber will provide you with video tutorials that will walk you through step by step. You can also use aweber to stay in contact with your buyers so that they will know immediatly that you have a property under contract to sell to them.

Monday, May 4, 2009

Transactional Funding JV Oppurtunity For Reo and Short Sales

Do you have a real estate deal lined up but you are unable to access the cash to get the deal closed? Maybe you don't want to pay the high fees associated with getting a hard money loan to flip your reo and short sale transactions. What if you can get transactional funds and proof of funds letter. How many deals do you think you can do then? Would an extra two deals a month help? Maybe you need to do five or more deals? Who knows, but times are tough and if you got burned with foreclosures in the real estate meltdown there is a way to benefit in these tough times. I want to extend to you an opportunity to make money in these tough times.

Let me help you to help yourself. I am a real estate investor that's been enjoying the benefits of using private money to flip properties and want you to enjoy the same benefits. Jv with me to close your deal or deals using private money for 30 percent of the profits. If you want to take advantage of this opportunity contact me and I will send you a JV agreement so we can get started.

To your success in 2009.