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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.

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Benefits of House Flipping as a Profession

By | El Paso, hard money loans | No Comments

House flipping, as a profession, can be pretty rewarding and demanding. Many people in the industry simply love real estate, or were tired of living in a 9 to 5 corporate environment. It has become more popular than ever before, with shows and social media accounts chronicling the lives of house flippers reaching millions of people a day. However, some people still have too little information on the industry and remain skeptical. If you are on the fence, check out just some of the benefits of house flipping below.

  1. Take Control of Your Time – When you flip houses for a living, you are your own boss. You don’t have to have lunch right at 12 or have that report done by Monday; you decide how much you want to do, when you want to do it, and how. 
  2. Financial Potential – As you may already know, there is a lot of money to be made in real estate. After all, for most people, the majority of their net worth is tied into their home. This can be daunting for some people since they have never had to deal with such large amounts of money before. But for motivated individuals, the potential for money-making in the house flipping business is as big as their desire and drive.
  3. Networking – Flipping houses requires talking to people, and we mean a lot. Marketing, getting loans, getting info on neighborhoods, and all the other aspects of house flipping require communication. If you love talking to people or want to branch out, this is a great industry to be in.

Pairing Your Dream With The Right Lender

House flipping can be made easy and profitable with the right lender. Here at Entrust Capital Funding, we pride ourselves on being able to offer the best loans for home flippers of all types. Contact us today to see how we can get your dream off the ground. 

How Hard Money Loans Improve Communities and Help Build Wealth

By | El Paso, Hard Money Lending, hard money loans | No Comments

When you say the words ‘hard money’ to someone, there is a high probability that it might prompt the kind of glazing of the eyes common with financial speak. So many people are unnecessarily intimidated by concepts of real estate investment and buying, but it might be worth to let everybody know that hard money loans and investing in real estate could be for everybody and not just professional house flippers we see on television. Thousands of Americans have grown their wealth through hard money loans and finding opportunities in the thriving real estate market. 

 


Where does the Term Come From?

 

The first question you might have is, “Why on earth is it called “hard” money?” When one understands the concept of these types of loans, the name might make a lot more sense. The term refers to the reliability of the loan in the sense that it is not from a bank, but from a fund of investors who agree to use their money for these short-term loans. 

 

A hard money loan is secured by the real estate project itself. So, if you find a home that you want to purchase and are willing to renovate and then flip, these loans are designed to be short-term and to use that very piece of property as collateral. 

 

Where Does the Bad Reputation Come From?

 

Let’s face it. Hard money also carries some stigma and bad reputation from a few bad apples that took the concept and took advantage of it. These bad apples provided very risky loans to borrowers with the intention of foreclosing on the property. So, unfortunately, a lot of hard money lenders today carry that bad reputation that even people outside of the real estate investing world seem to have. 

 

What Role Does It Play In My Community?

 

You might be surprised that many homes in your neighborhood were purchased with hard money. If you live in a neighborhood where there are older homes that have some renovation happening, you can rest assured that many of those renovations were funded by hard money. These types of loans help the cash flow and help people with bad credit invest in and purchase their homes. Hard money is composed of a group of investors from a community, interested in improving that community by allowing people to renovate and remodel homes, thereby improving the neighborhood, the community, and the value of the homes. 

 

The Security of these Loans

 

Just like taking out any kind of loan—whether it is a student loan or other private loan— there is some responsibility involved. For aspiring real estate investors, there is a lot of resources out there that help them learn about how to maximize the opportunities provided by hard money. Here at Entrust Capital, we help aspiring investors navigate the complicated and sometimes daunting process of borrowing money for a house flip. 

 

Choose Lenders You Trust

 

Precisely because of this bad stigma, we understand that some people might be apprehensive to go with hard money lenders. There are, however, a lot of benefits to getting these loans, as opposed to regular bank loans. They are available faster, they have lower interest rates, and they are reliable. After all, for the group of investors funding your loan, they know that there is some security with the real estate, so they are not so concerned with your credit. If you’re looking for a quick short-term and reliable loan, call Entrust Capital Funding and we’ll give you more information.