How To Get Investment Property Financing In A Tight Market
Cash is King When it Comes to Investment Property Financing
The best type of financing when you want to get a property at rock bottom pricing is no financing. This means that you use all cash to buy the property so that you can get a really low price. The easiest way to do this is to find private investors who are getting low rates of return on their retirement or other investment funds. Then, you can make “all cash” offers on commercial or residential property and use your investors money as your financing source.
Creative Methods For Investment Property Financing
In a market where lenders are hesitant to provide financing for investors, you can put together creatively financed offers as a way to help a seller out of a tight situation, and get a great deal for yourself in the process. You’ll need to make sure that you’re working with a motivated seller, something that is easy to find in today’s real estate market. Then you can make offers using creative financing methods such as a Master Lease Option, Owner Carry Financing, and buying while leaving the Existing Financing in place.
No matter what method of creative real estate financing you choose, the advantage of getting started now is that you’ll be able to build your real estate portfolio without having to wait for lenders to relax their lending criteria. This gives you the chance to get into owning more real estate at a time when prices are at a low point. Smart investors work to connect with private parties who may be able to provide funding for their real estate deals.
Types Of People That Might Provide Cash For Your Investment Property Financing
I’ve discovered that it’s hard to tell if someone is going to be a good candidate to provide you with the funding you may need for your investment properties. Sometimes the person who looks like they don’t have much money at all can end up being one of your best sources for investment property financing. So don’t rule out anyone when you are putting together your list of potential private lender prospects.
The best way to approach someone is to simply mention that you are buying houses or commercial property to take advantage of all the great deals that are available. Then ask them this magic question:
“Do you know of anyone who might want to be earning higher rates of return in their IRA or other retirement funds?”
If they say, “Well yes, I do!” then you’ve just found another possible source of investment funds. Once you get a positive response, make sure that you don’t chase after them. Instead, You’ll want your private investors to be chasing after you. So take it easy. Say something like:
“Everything I have right now is fully funded, but if I did come across something new, would you want me to at least let you know about it so that you could decide if you even had any interest in getting a stronger rate of return or not?”
Then you make sure you have their cell phone, and email address so that you can “tickle” them with potential investment financing deals. In an email or on a phone call you can casually mention the big property that you were looking at last week that “Didn’t meet the requirements” that you demand for your investors who help to provide the funds for your investment properties.
The Key To Getting Investment Property Financing
The formula you are going to be following is to mention a potential investment property financing deal you are working on, but then “take it away” because it either did not pass your review or even better, it did meet your requirements, but other private investors that you are already working with got there first and now it is no longer available. It’s strange, I know, but people always seem to want things that they can’t have. So use this to your advantage when you are looking to attract investment property financing.
Why Early-Stage Startup Companies Should Hire a Lawyer
Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.
The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?
They Know What’s Best for You
Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.
Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.
They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.
Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.
They Contribute to the Increase in the Value of Your Business
Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.
They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.
Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.
Wrapping Up
All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.
Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.
Think Twice Before Getting Financial Advice From Your Bank
This startling figure comes from a recent review of the financial advice offered from the big four banks by the Australian Securities and Investment Commission (ASIC).
Even more startling: 10% of advice was found to leave investors in an even worse financial position.
Through a “vertically integrated business model”, Commonwealth Bank, National Australia Bank, Westpac, ANZ and AMP offer ‘in house’ financial advice, and collectively, control more than half of Australia’s financial planners.
It’s no surprise ASIC’s review found advisers at these banks favoured financial products that connected to their parent company, with 68% of client’s funds invested in ‘in house’ products as oppose to external products that may have been on the firms list.
Why the banks integrated financial advice model is flawed
It’s hard to believe the banks can keep a straight face and say they can abide by the duty for advisers to act absolutely in the best interests of a client.
Under the integrated financial advice model, there are layers of different fees including adviser fees, platform fees and investment management fees adding up to 2.5-3.5%
The typical breakdown of fees is usually as follows: an adviser charge of 0.8% to 1.1%, a platform fee of between 0.4% and 0.8%, and a managed fund fee of between 0.7% and 2.1%. These fees are not only opaque, but are sufficiently high to limit the ability of the client to quickly earn real rates of return.
Layers of fees placed into the business model used by the banks means there is not necessarily an incentive for the financial advice arm to make a profit, because the profits can be made in the upstream parts of the supply chain through the banks promoting their own products.
This business model, however, is flawed, and cannot survive in a world where people are demanding greater accountability for their investments, increased transparency in relation to fees and increased control over their investments.
It is noteworthy that the truly independent financial advisory firms in Australia that offer separately managed accounts have done everything in their power to avoid using managed funds and keep fee’s competitive.
The banks have refused to admit their integrated approach to advice is fatally flawed. When the Australian Financial Review approached the Financial Services Council (FSC), a peak body that represents the ‘for-profit’ wealth managers, for a defence if the layered fee arrangements, a spokesman said no generalisations could be made.
There are fundamental flaws in the advice model, and it will be interesting to see what the upcoming royal commission into banking will do to change some of the contentious issues surround integrated financial advice.
Many financial commentators are calling for a separation of financial advice attached to banks, with obvious bias and failure to meet the best interests of clients becoming more apparent.
Chris Brycki, CEO of Stockspot, says “investors should receive fair and unbiased financial advice from experts who will act in the best interests of their client. What Australians currently get is product pushing from salespeople who are paid by the banks.”
Brycki is calling for structural reform to fix the problems caused by the dominant market power of the banks to ensure that consumers are protected, advisers are better educated and incentives are aligned.
Stockspot’s annual research into high-fee-charging funds shows thousands of customers of banks are being recommended bank aligned investment products despite the potential of more appropriate alternatives being available.