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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.

House flipper perfecting the art of flipping houses by literally flipping houses around

Terms You Should Know in the House Flipping Industry

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

Real estate is a great industry to work in; it’s stable, and allows you to meet new people, take risks, and expand and grow to an almost endless degree. If you want to get started in this industry, you may want to learn some of the most common terms so you won’t get lost or confused doing your own research. 

House Flipping Terms

The house flipping industry has a lot of terms that are unique to the industry and are brought up a ton from experienced home flippers. Here as some of the most common that you’ll see and hear regularly:

  • Reno project – This one is pretty simple—this refers to a home that will need a renovation before it is sold on the market. 
  • Wholesaler – A wholesaler is a person who buys homes as-is and will sell them to another flipper. They don’t waste time renovating or selling a home to someone who will actually live in it. 
  • Bene – Bene is short for beneficiary, and that is typically a bank or lender that has ownership of a foreclosed property. 
  • Distressed property – A distressed property is one that is late on payments, and is in danger of foreclosure. 
  • NOD – NOD stands for notice of default, and is the point where a house is due to be foreclosed on. You can often get a list of these properties in advance, but it’ll cost you. 
  • Dollhouse and Haircut – Dollhouse and haircut just mean that homes are in pretty good shape, and need minimal renovation to be ready for the market.
  • LTV – LTV is just the Loan-to-Value ratio, meaning the difference in the loan and appraised value of the home. 
  • ARV – ARV stands for After Repair Value, and it’s just the value you of your home after renovations. This is where your profit comes in, so you need to have an idea of this number before you renovate.
  • Hard-money lender – Oh wait, that’s us! A hard-money lender is a private lender, meaning the money comes from private investors, and not from a bank. That means that you can get your money fast, and go on flipping or renovating your house much faster than a traditional lender. 

Contact Entrust Capital Funding, Today!

When you’re in need of a hard loan that can get you the house or renovation project with the lowest interest rates in town, call Entrust Capital. Let us finance your real estate dreams today!

hard money loans

A Review of Hard Money: Why These Loans Can Help You Kickstart Your Wealth

By | el paso texas hard money lenders | No Comments

hard money loans

Every loan—whether from a friend or from a bank— is contingent upon a certain amount of trust. The trust is that you will pay it back. When it comes to a bank, of course, there is usually some collateral or high interest involved so that there is some guarantee that their efforts in lending the money to you will be worth it in the end. Hard money loans function a little differently, as they don’t exactly require proof that you will pay them.

Lenders are usually interested in your past credit and credit scores. This record is a kind of proof that can be used to indicate the likelihood of your ability to pay the loan back. Hard money loans are not exactly concerned with your credit score, as your past spending is not as relevant as the project at hand. The collateral—or in the case of real —estate investment, the home or property, is used as collateral to secure the loan. Your past credit card bills become irrelevant. So the value of the home you plan to purchase and flip is more important than the actual history of your spending.

Real estate can be a quick business. A property that goes on sale and is a lucrative opportunity for profit or a great buy, it will go quickly. Going through a traditional lender can be a time-consuming process. If you have some blotches in your credit history or some negative items, they will certainly play a role in slowing down a lender’s loan process. Because hard money loans are not concerned with your credit scores or financial history or standing, the process of obtaining a hard money loan is far more quick and efficient. It can often happen in just a few days and get you squared away with your new funds for your upcoming project.

Benefits of Hard Money Loans for Real Estate

Hard money loans can be a really great opportunity for people that are considering trying their hand at real estate investments or house flips. They are beneficial because

  • They are generally short term loans of about one to five years
  • They are fast
  • They are reliable
  • They are very flexible loans
  • They don’t look at your credit scores or credit history

So What Happens if You Can’t Repay the Loan?

Because of the way it is structured, if you are not able to pay your loan, then the owners of the loan will take the collateral and sell it to pay themselves back.

So When is Hard Money a Good Option?

Hard money loans can be a good option for people that might not qualify for a loan with a traditional lender. If you’ve had some bad credit history due to credit card issues, or etc. it will not really become a factor with hard money lenders. These types of loans can also be ideal for a house flip, where the purchaser has the home for just a short amount of time and then turns around and sells it for a profit. This way, the loan can be paid back quickly.

Reach Your Wealth Potential With Hard Money Loans

Here at Entrust Capital Funding, we are excited to help people launch their wealth-gaining endeavors. We understand it’s hard work to flip homes or invest in real estate and our hard money loans with low interest rates can help make that happen quickly, effectively, and with a trusted and reputable lender that is owned and operated locally.