Finance Roll

When I first got started as a real estate investor, I had not mastered the borrowing game, was scared to death of the thought of having to go to a bank and "ask" for money to buy and renovate my deals.  There were several reasons for this, but the most prominent one was that I didn't think lenders would find me or my deals credit worthy.

Now... if you are a real estate investor or an agent who has investor clients you know how critical it is to have ready sources of capital... and in today's tightening lender market, it is even more important.

So... how did I overcome this fear of bankers and master the borrowing game?  I learned how to approach lenders, this included banks, hard money lenders and private lenders and instead of "asking" for funds for my deals, instead I sought to create relationships with each type of lender so that when I needed the capital for my deals, I always had it!

Mastering the borrowing game as a real estate investor can mean the difference between maybe getting a deal funded, or being able to fund all of your deals... and as I as often times have said allowing you to "buy with impunity".

I believe that mastering the borrowing game is so critical that I prepared a report that helps investors to understand how to approach lenders and how to get them to fund your or your clients deals.

I have included the first part of that report below. 

Part - 1 MONEY... and how to Master the Borrowing Game so that lenders will be tripping over themselves to lend to you.  I will be discussing this subject in four installments. 

Many people have asked me to share with them the primary reason for the successes I have achieved as a real estate investor.  In a word I would have to respond... MONEY!  In the business world this money is referred to "capital".  Without it you can't do a darned thing... With it you can build an empire!

And if I were to name the number one... no holds barred... absolutely... positively... the first amongst equals reason that real estate investors don't achieve their goals... are your ready???  DRUM ROLL PLEASE.........

THEY EITHER DIDN'T HAVE ENOUGH MONEY TO START... OR THEY RAN OUT AND DIDN'T KNOW HOW TO GET MORE IT!

IT IS THAT SIMPLE!

OK... so if it is that simple... how do I get what I need, or more to expand my business to accomplish my goals?  Are you ready for this answer!

It's all about...

RELATIONSHIP building.  That's it.  It's that simple.  So go out there and build some relationships and watch your empire grow.

When I mentioned above that ensuring you have a steady stream of funds available for your projects is based entirely on your relationships with lenders I wasn't kidding.  And when I speak of relationships, I am speaking about the kind where your lender is willing to spend an afternoon with you driving around town looking at your projects and sharing with you where the big money is about to be spent in your market.

These successful relationships will find you being contacted by your lenders to discuss the current state of the real estate market.  Where your lenders are seeking your advice regarding certain areas, how appraisers are valuing your properties, and even what other lenders are doing.

When you have relationships like that, you know that you can count on your lenders to get your projects financed. 

OK... who are these lenders?

Well, eventually you need to associate a name to a specific individual.  But, first you need to know that not every lender is the same.  So lets spend the rest of this report discussing the most important types of lenders.

Most investors take the path of least resistance when it comes to finding a lender.  That path is the residential mortgage market.  While this is an OK place to find funds,  it is not the best place for several reasons.

First, all mortgages in the residential market are controlled by rules promulgated by either FANNIE MAE or FREDDIE MAC.  These outfits are quasi-government organizations that take individual mortgages and bundle them into packages which are then sold to investors on Wall Street.  Since these Wall Street investors demand consistency with the products they purchase there are many rules that apply to these loans.

And you know what these rules are.  First and foremost to get a residential loan you must be subjected to a proctology examine... well not really, but it sure seems like one by the time your loan gets out of under writing.  If it makes it out at all!

Then you can only get the loan if it is in your name personally.  And how about the fact that this loan shows up on your credit score and impacts your debt-to-income ratio.  Or that you can only have 10 loans underwritten by FANNIE or FREDDIE, (kind of kills you dream of building an empire doesn't it).  Or how about this one, you can only purchase homes that don't need renovation.

It's amazing that we can even survive as investors with all of these crazy rules.

But we can! 

And here is the secret...

You need to be creating relationships with lenders who don't, I repeat don't bundle their mortgages and sell them to Wall Street investors.  Just think, if the lender is not selling their mortgage portfolio to outsiders, who do you think gets to make the rules?

That's correct.  They do.  So who are these banks?  Where can I find them? And how do I create this cherished relationship with them???

Tune in for the next installment.