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A Secure Investment: Real Estate and House Flips During a Time of Crisis 

By | Home Buying | No Comments

Young business entrepreneur woman working at home while having breakfastAccording to a recent Gallup poll, both high-income and low-income Americans have lost faith in their stocks. Interest in stocks and mutual investing fell dramatically in the first quarter of 2020. Of course, these are unprecedented times and the market has certainly shown it.

Thirty-five percent of Americans say real estate is their favored long-term investment. This has been the case since 2013 and remained so especially during the time of the pandemic. The reason for this can be twofold: one, real estate is tangible, and even during a pandemic, it is still there. You can see it. Feel it. Touch it. Two, the markets will always come back, at some point or another, but they do come back, and when they do, people will always need a place to live. 

Tips For Preparing For a Recession as an Investor

We don’t actually know what is going to happen to the markets as the country begins to open up. There are plenty of analysts and market gurus projecting their predictions. Some claim that there is likely to be a recession coming out of this. That may or may not be the case. In fact, it may be that the markets bounce back as people are eager and able to get back to work immediately. After all, we’ve never had a self-imposed economic shut down before. Yet, as a real estate investor, you always want to be prepared and have a few things in mind in case a recession does hit. Here are some things to keep in mind:

  • If you have properties or assets, you might consider selling some so that you have more liquidity. 
  • If you are prepared, consider making cash offers on properties likely to go back up quickly, that is, places with desirable schools, good neighborhoods, etc. 
  • If you have the capital, buy properties that you see have potential. Many real estate investors, after the great recession of 2008, figured out that they could have bought more properties since prices went insanely low. 
  • If you’re a house flipper, you can work on building relationships and using several lenders, so you have trusting relationships before a recession hits. 

Well, that still doesn’t answer the million-dollar question directly. Does that make now a good time to put in an offer on a property? 

The truth is, there is likely no straightforward answer to that question. The answer will largely depend on what you plan to do with the home, your current situation, your other properties, etc.

It might very well be a good time to buy an investment property if there is inventory at a good price. The challenge is, of course, that there were a lot of pauses put on the home selling process, that inventory is quite low in many American cities, including El Paso. 

How the Stay at Home Orders Upended the Home Buying Process 

Many companies that specialize in buying or selling homes have put a pause on operations. New listings, according to Market Watch, were down 44% in April compared with the previous year. This translates to about 189,000 fewer homes on the market than during the same period in 2019. New home construction was also halted, as many builders became wary about the state of the housing industry. 

So there might be a lower amount of inventory due to these reasons:

  • Seller uncertainty 
  • Real estate companies halting services
  • The rapid rise of unemployment and sellers pulling their listings
  • Lack of foreclosure homes. 

All this being said, it doesn’t mean that it’s necessarily a bad time to buy an investment property. A deal is a deal. And if a deal pops up in a market that you, as an investor, see as a good investment, it is the right time to buy. The returns will come later, as the market picks up. In fact, there is already data suggesting that buyers are returning to the markets and slowly things are picking up. 

It’s important to keep in mind that all of the above reasons are only temporary. Seller uncertainty tends to fade as the market begins to reopen and states go back to normal. Texas is one of the states that is opening the fastest after coronavirus. And while El Paso seems to be slower than the rest of the Lone Star State, there are still plenty of listings in the El Paso market. That being said, Texas is a robust state with a strong economy and a business-friendly environment. This will likely mean a quicker recovery. 

Get Confident, Look for a Deal, and Be Ready to Invest For Your Future

Every investor knows that investing—whether it be real estate or stocks—always involves some risk mitigation. Uncertain times, certainly call for more attention to detail and keeping your eye on the markets. That doesn’t mean, however, that it is not a ripe time to capitalize on the market downturn. Finding a good deal means that your returns will likely increase as the market picks back up. Here at Entrust Capital Funding, we encourage investors to go with their gut and use their entrepreneurial spirit to seek the right deal for the best price. If you’re looking for some funding to invest in that diamond in the rough, give us a call today.

Sold Home For Sale Real Estate Sign and House.

Real Estate Investment & Coronavirus: Factors To Consider

By | El Paso, real estate investment loans | No Comments

The global COVID19 pandemic is causing unprecedented levels of medical and economic damage, choking hospitals of resources and killing small businesses like barbershops, restaurants, and nail salons. Global shipping has taken a huge hit, and governments are scrambling to guard against an economic collapse unlike anything the world has seen.

The far-reaching effects of the coronavirus have left no industry untouched, including the real estate market. Close eyes are on the real estate market, and early reports are dire. In this blog, we’ll analyze the current effects and predictions for the real estate market.

How COVID19 Is Shaking Up The Market

The coronavirus is quickly overwhelming citizens and governments alike, while the negative ramifications continue to build. The economy was already slowing down, so the coronavirus has acted to accelerate and exacerbate the already-coming recession. Unlike the previous recession, though, the housing market may not take as big a hit.

The head off the effects of the coronavirus, state and federal governments are helping by providing relief and assistance for those with mortgages. Since many people rent, especially young adults, some help is likely in the works for them.

For investors, the most important numbers will be interest rates, which will continue to drop as this pandemic progresses. Lower interest rates mean more investment in property and development, given how fruitful it will be as opposed to bonds or CDs.

At the time of writing, normal housing behavior has been maintained more or less. Recent surveys have shown that 80 to 90 percent of home buyers and sellers report no change in interest or sales, despite the crisis. The National Association of Homebuilders has sent President Trump a letter asking for federal support for the housing sector nonetheless, likely worried about the future implications of the pandemic.

For now, the housing market is relatively stable. Future forecasts, however, are not as optimistic.

The Future Of The Housing Market

The housing market, like the rest of the economy, has its underpinnings in debt. Lots and lots of debt. It’s estimated that there’s enough debt for each American man, woman, and child to have $12,000 each in debt. The pandemic presents a huge opportunity for the housing market to collapse ordinary Americans, but it all hinges on the way the government responds.

The Trump administration has taken steps to head off the crisis by putting a freeze on mortgages backed by federal bodies like Freddie Mac, Fannie Mae, or the FHA. While this will put mortgage servicers in a bad spot, it should ultimately save the cascade of foreclosures that would have happened otherwise.

It’s also important to keep in mind that the housing market as a whole was already pretty tight. Housing prices have been skyrocketing for some time now, and the available homes for sale have also decreased across most major cities.

Besides the 2008 housing crash (which ultimately caused the stock market crash), the housing market is actually quite resilient during a recession. In fact, many people are looking to shift their investments into real estate because it seems like a safer option than other types of investments.

How Should I React To The Coronavirus?

Unfortunately, it’s hard to know how to respond since we have no clue how long or severe the coronavirus recession will end up being. It’s hard to make decisions when the future is so uncertain. Many investors, as stated above, are taking advantage of rock-bottom rates and are investing in droves.

If you recently bought a home, refinancing may be a great idea, though many banks are pausing their refinancing programs due to the coronavirus. Some experts warn of a liquidity crunch in the market, due to the lack of capital from lenders. Getting a mortgage and a new home will be difficult, thus making the housing market grind to a crawl.

The best advice at the moment would likely to practice very cautious and well-calculated moves. As the stock market is showing, many people are panic selling their stocks and panic buying toilet paper. Those probably aren’t the wisest moves, especially since the markets are going to be receiving some major help from the government.

Investing in real estate may represent a much more stable choice, but the best tool you can have in times like these is knowledge. Stay up to date with the latest news and government actions will best inform your investing decisions.

Choose Entrust Capital Funding As Your Real Estate Partner!

Still looking to invest in real estate? Let our team help out with industry-best loan services! Contact our office to get started on your real estate investment!

8 Ways to Invest in Real Estate Without Actually Buying

By | El Paso, real estate investment loans | No Comments

Home renovations being completed to sell for a larger profitThere is a risk of investing in anything. You always need to make sure that the market that you are investing in is profitable and will continue to be profitable. Investing is always a risky business and some markets are riskier than others. Investing in the real estate and housing markets can be a risk and many people are intrigued by it but not willing to just dive all the way into it. There are ways to invest in real estate that can help you learn all about the market without as much risk as actually buying property. Here are 7 ways to invest in real estate without actually buying property and posing less of a risk to your wallet. 

 

Become a Real Estate Agent or Start a Brokerage

Being a real estate agent and a broker requires some education and licenses that need to be obtained. Those licenses and levels of education sometimes depend on your location and area of expertise. This is a great way to learn about the market and work your way up. Successful agents earn a decent amount of commission and brokerages can earn a decent amount of commission from their agents that work under them. If you are a successful agent, building a brokerage might be a very profitable option for you to consider.  However, starting a brokerage can be very expensive. It does take money to make money, so consider how long it can take to grow and see a return in profits. 

 

Wholesaling Houses

This is similar to owning and flipping a house, except you don’t have to own the property to do it and you don’t front the cost of maintenance. You essentially contract someone who is looking to sell their home and you then take that contract and sell it to a buyer for a profit. The trouble with this way of investing is that it can be very difficult to find a home that has been undervalued in the market that a person is willing to renovate and sell. Lots of factors need to line up in order for this kind of investment to be successful. 

 

Real Estate Mutual Funds

Mutual funds are pulled together and overseen by an investment manager. You can choose a fund that is growth-oriented or income-oriented. These are designed to minimize the risk of investing, but like anything in real estate, there is still a slight risk. If a real estate related risk affects one of the investments, it is likely to infect the other investments as well. This is where you would really want to evaluate the market and see if the risks are too big to take. 

 

Invest in Home Construction Companies

By this we mean investing in the stocks of home building companies. Be sure to look closely at stock numbers and study the home building market. Perhaps, start small and work your way into investing more money if you see that you are turning up a profit. Invest if you truly believe that the home building market is going to boom and remain steady. 

 

Real Estate Partnerships

Investing can be really expensive to do on your own. This is where it can be beneficial in having an investing partner. Each person had their own responsibilities that they take care of. This is a great way to purchase property at a lower price. Depending on the agreement, you can choose what is most enjoyable and easiest for you to take care of, and leave the rest to your partner. 

 

Invest in Real Estate Service Companies

This is a great way for beginners to dip their toes into the housing market and build their portfolio until they can really invest. This involves minimal work and is a great way to gain experience and learn. 

 

Become a Real Estate Appraiser

This is another great way for you to learn about the housing market and learn what times are the best to invest in. As a real estate appraiser, you can specialize in commercial or residential properties. You will determine the values of properties and their surrounding areas while making a decent salary and learn about valuable housing markets. 

 

Obviously, any kind of investing can be tricky, but the housing market is a particularly tricky market, especially in this economy. Entrust Capital Funding id here to help. Contact us to learn more about real estate investing.

Preparing Future Homeowners: Requirements for Buying a Home in Texas

By | hard money loans, Home Buying | No Comments

Still of a conventional home with a Texas and U.S. flag hanging over the front porch and walkway.

If you’re interested in buying a home in the state of Texas, you’ve made an excellent choice. Real estate investors and homebuyers are in for a treat when deciding to reside in Texas, especially in major cities such as Dallas, Houston, and San Antonio. In order to diminish your share of challenges in the home buying process, it’s important to understand specific laws and issues. If you’re wondering what exactly you need to purchase property in the state of Texas, you’ve come to the right place! We touch on the requirements and steps it takes to successfully make a Texas home yours.

Assessing Your Finances and Do Your Research

One of the most important primary steps for looking and purchasing a home in Texas is to do some research. This research doesn’t have to be arduous, but it should be just enough so that you can gain a general understanding of how home buying works in Texas. Some of the key points you will want to look at should consist of credit score, average down payment, home programs, and mortgage payments. By reading up on these requirements, buying a home in Texas can be much more feasible for investors.

Finding a Real Estate Agent

Although the state of Texas is one of the very few that does not make it mandatory for an investor to hire a real estate agent but utilizing their help could make a world of a difference. By hiring a real estate agent to guide you through the home buying process, their presence minimizes the potential for errors in other requirements to buy a house in Texas. If you want to ensure that you are choosing a qualified agent for your home buying journal, it could be helpful to seek the wisdom of referrals and more.

Getting Pre-Approved for a Mortgage

The next step regards getting pre-approved for a mortgage, which is essential before making an offer after searching for investment properties for sale. If you are a first-time home buyer in Texas, it is crucial that you learn about the lender’s requirements.

Initiating the Property Search

You can start hunting down properties by scouring your desired area or by searching for local advertisements. Even better, you could search for investment properties for sale online, as 90% of real estate investors do.

Make a Written Offer

Once you’ve set your mind on a specific property, you can then move onto the next step of buying a house in Texas: making an offer. In Texas, offers to purchase must be written. This is one of the requirements to buy a house in Texas that a real estate agent can provide a significant amount of help for investors. The agent can review the contingencies and terms of the offer and any other associated legal aspects.

Have the Property Inspected and Appraised

The next step in meeting the requirements to buy a house in Texas includes the expertise of two real estate professionals: inspectors and appraisers. Whenever you are purchasing a home in Texas, these two professionals must be prevalent throughout the process. An inspector is available to assess the standards of the property, while an appraiser determines the property’s value.

Determine Escrow and Finalize the Deal

The following steps of buying residential property in Texas near the ends of the home buying process. A legal advisor, who can simultaneously be the agent, helps to determine escrow of the deal. Once escrow is determined and agreed upon, the closing of the deal can begin.

While some detailed specifics can be different based on your real estate agency and property, these are the general requirements and steps to buying a house in Texas. Above the requirements, it is essential that you take your time with the process, especially if this is your first time purchasing property. Never agree to anything in the deal until you come to a full understanding and level of comfort.

Entrust Capital Lending: Here to Accompany You Throughout the Process!

The Entrust Capital Lending group is just as passionate about working with investors and homebuyers as we are about providing loans for Texas homes. If you need a loan in a timeframe that is convenient and fast for you, we are here to help! Contact us today to learn more about how we can get you started.