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Real Estate Investment & Coronavirus: Factors To Consider

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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

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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.

How Investment Meets Stability: Fighting for Your Financial Future With Real Estate

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There is a reason why countless television shows deal with real estate investing, flipping houses, and interior design. That reason is that regardless of the economic state of the country, people will always need homes. The housing industry, while suffering its ebbs and flows, always has some kind of demand, as people grow older, get careers, move out, and begin their own families in their own homes.  This is why real estate investing can always hold big opportunities for wealth building.

Many Americans look not for exorbitant riches and million dollar homes. Many people today are just looking for a way to establish a stable financial future with plenty of assets and security that gives them peace of mind for their retirement, their children, and grandchildren. And therein lies the magic word: stability. Real estate investing can be a great way to achieve some of this stability when handled properly and with care.

Real Estate Investment Provides Safer Returns

There are several ways to invest your money in an attempt to secure your financial future. One of these ways is investing in the stock market. This is one way that people build their wealth, but it comes with a lot of unknowns, headaches, and volatility. Stock investing can take advantage of a growing economy but can quickly tumble down as soon as there consumer and investor confidence plunges or some unpredictable change occurs.  Real estate investing still sees changes in the market, but it is far less volatile than the stock market. For investors, this means that even when an economy suffers, the likelihood that the market will rise again means higher returns.

Diversification Leads to Increased Stability

Don’t put all your eggs in one basket. This advice is valuable when it comes to your finances. Real estate investment is a lot more dynamic, as it can happen in several different ways. You can purchase a property to flip or rent. If you purchase and flip a property and then put it for rent, you can collect what is called passive income. If you purchase a property to flip and sell, you are making a one time profit.  Any financial planner will tell you that diversifying your portfolio is a great way to spread the risk and purchasing property can help to do that. Of course, it depends on your financial goals. Hard money loans are a great way to get in the game if you’ve had some trouble with your credit history in the past. These types of loans, of course, do not pay attention to your credit history but are more concerned with the value of the property itself.

Land and Assets Will Always Have Some Value

Even in bad economic times there is always value in your land and home. The value doesn’t just disappear the way that stocks often can.  That investment you make is worth something. Therefore, people are always looking to purchase homes and flipping houses is a great way to capitalize on that. Let’s say you buy a property that at first glance is not worth much. You pick it up. You fix it up, remodel it, repaint it, do the quick fixes necessary to make it a desirable residence and it suddenly becomes easier to sell. Someone is looking for that house and when they find it, you will profit.

Achieve Financial Stability With the Right Investment Strategy

Here at Entrust Capital Funding,  we can help you reach financial stability with hard money loans. If you’re looking to start building some wealth and not sure where to begin, real estate investment can be a great way to jump into the profit-making possibilities out there today. Bad credit score? No problem. We got you covered. Entrust Capital Funding has the lowest interest rate in the city.

 

How To Maximize Your Profits as a House Flipper

By | el paso texas hard money lenders, real estate investment loans | No Comments

 

Thinking about flipping homes? Rehabbing a home can be an extremely lucrative pursuit if it is approached with caution, understanding, and a little bit of insight knowledge into the inner workings of the industry. Your first flip might seem like an insurmountable task but arming yourself with a few key tips will really make a difference to the outcome. It can certainly help you produce the kind of profit you’re looking for. Let’s look at a few wise words to consider.

Think Carefully About Remodeling Choices

The fix and flip is often seen on television as a great massive overhaul of the home’s interior and exterior designs, bathrooms, kitchen, etc. This makes for great entertainment, as the full transformation of a home is something to witness. However, when dealing with a flip in real life, it is important to note that over remodeling it might not necessarily bring more profits to you as the flipper. As Forbes magazine points out, remodeling takes a lot more time, money, and resources. Embarking on complex remodels will often open the doors for more issues to arise.

  • Tearing into walls can lead to more problems. When digging too deep you might run into a problem you didn’t bargain for. Also, a mistake by the contractor can extend the timeline.
  • More time more money. Another reason why spending an extended amount of time on flips is not advisable is because the more time you spend on it the more money you will be spending and possibly losing.
  • The changing market can make a difference. If you hold on to a house for too long, the market may change and alter your original calculations, pricing, etc.
  • Keep it simple. Experienced house flippers have said that keeping the repairs and remodels simple is the best way to go. Completely changing the bathroom or kitchen will not necessarily pay off at the end. Keeping the changes to what is necessary is a wiser investment choice in a lot of cases.

Some possible risks

There is no shortage of date or factors you can consider when flipping a home. This doesn’t mean you have to fully learn the industry but only be aware of certain things that can impact the way you approach your flip, how much your renovate, how much you spend on repairs, and how quickly you get it back into the market.

Consider market trends. You don’t have to be a real estate expert to look for some big patterns on market trends. You can check in with a multitude of sources —like realtor.com, Joint Center for Housing Studies of Harvard University, neighborhood price ranges, local MLS statistics, census.gov, even social media— for updates on the market. This will give you some insight into demographic shifts that can impact the price of the property you are looking to buy.

Look at changing interest rates. The interest rates on home loans are always important to consider. The interest rates might tell you something about the prospective buyers for your planned property.

Valuation. This is a critical part of the flipping process. Carefully considering and estimating the price of the finished product.  What is the After Repair Value (ARV)? Get a good idea of what the selling price will be before you make an offer to purchase the property.

Choose contractors wisely. In a previous post, we talked about the importance of choosing the right contractors. Doing some research, weighing your options, and calling around, will go a long way when it comes to choosing a reputable and trustworthy contractor.

Ready, Set, Flip!

ATTOM, the real estate data company, reported the average profit on house flips can be up to $65,520 in the second quarter of 2018. Of course the number varies on whether you are doing a lower price range flip or a high-end flip.  If you’re ready to embark on the flipping journey, a hard money loan might be the solution for you to get started fast. We don’t do credit checks and you can hit the ground running asap. Give Entrust Capital Funding a call today.

Become a Profitable Investor With Real Estate Investment Loans

By | hard money loans, real estate investment loans, Uncategorized | No Comments

Making money on real estate is not a new idea. People have been doing this for some time, but as the market changes, shifts, and adapts to new trends and lifestyles so do the best tactics for turning a profit. Real estate investment loans are a great way to make money in today’s market. Entrust Capital Funding is a trusted private lender in the El Paso area. We can help you grow your wealth. Here are a few reasons why hard money can help you thrive:

As you may know the concept behind real estate investment loans from private money revolves around the idea of borrowing from private lenders and flipping the home. “Flipping” is an industry term for re-selling. The process of flipping a home will involve acquiring a property, putting in some repairs, and putting it back on the market. Private money lenders — also called hard money lender or peer-to-peer lending— circumvents the need for a bank and goes straight to private investors willing to put their money on the line for you.

#1 Find the Right Deal

When looking to flip homes, the first step is learning how to spot a good deal. Learning the basics of the real estate market can come in handy here. If you find what you think might be a good investment property, consider doing a little extra research on the neighborhood, the area of the city, assessing preliminary repair costs, crime, etc. These are all factors that will come into play when you’re looking to make some money off a property.

# 2 Know Your Market

New and seasoned investors should spend a little bit of time learning some trends in their market. Market cycles exist in every market and paying attention to these patterns can help you spot a deal and stay away from potentially bad ones. Evaluate the market before you purchase anything.

#3 Find the Right Lender

Real estate investment loans are key to a successful investment venture. Not only will the private lender be the source of your acquisition fund but they will be part of the investment with you. Interest rates are inescapable, but some private lenders can really go to town on this, so look for one that has a low-interest rate and clear straightforward contracts with no hidden fees. The right lender will also conduct proper and thorough market analysis that gives you an objective view of what you might get for the property.

#4 Make Time

If you’re a first-time investor, you might underestimate the time it takes to flip a property. First, it takes some time to find the right deal, once you have that and get the real estate investment loan, you’ll need time to do investments, supervise the investments, schedule inspections, and so forth.

#5 Be Patient and Confident

There are some unknowns when dealing with real estate but you have to trust the process and be confident and stay calm. By having the right lender and conducting your own research, you are already on the right path. Trust your work and your process and dive into the market with confidence. At the same time, don’t forget that patience is needed to get past some of the frustrations involved.

#6 Don’t Get Emotionally Involved

Real estate market —while more stable than the stock market — is still very much a numbers game and getting emotionally involved will often cloud judgment and lead to some bad decisions. Be honest with yourself about repair costs, vacancy cost, any closing costs involved, and be practical about your risk tolerance.

Go With El Paso’s Trusted Lender

Entrust Capital Funding not only has the lowest interest rates in real estate investment loans but is committed to seeing their investors thrive. Why? Because when you win, the community wins, and when the community wins, everybody wins! This is why, as part of the largest coalition of real estate-related companies, we understand the market, we know its tendencies, and have the best connections to ensure the best deal and the most accurate research.