Realty411 Magazine Featuring Patty Arvielo - New American Funding

of the home, educated investors are buying 30- 40% below a retail buyer – that creates instant equity at purchase. Also, in a typical transaction, RRs cut out the middleman cost, such as: com- missions, mortgage broker fees, loan fees, and attorney costs are also lower because there is less work for them to review. An experienced and educated RR is able to offer buyers a fully renovated home at or below everything else in the neighborhood. The goal is to buy right so you can attract a wide variety of PMLs for your projects. Keep in mind: RRs make money when we BUY. HOW PRIVATE MONEY HELPS AS A RESI- DENTIAL REDEVELOPER (RR) Private money lenders bring speed and effi- ciency to the RR’s transactions, and their leverage is far greater when they purchase using private cash funds. Many of the homes RR purchased are in need of a quick sale, within 10 to 14 days. A traditional bank requires 30 to 45 days to close a loan. Many traditional home sales fall out of contract because of financing issues. Using quick cash as leverage allows the RR to negotiate a much lower purchase price and reduce risk. Being able to offer a fast closing with private funds motivates sellers to take the RR’s offer over the competition, and entices them to take a much lower price than they would from a conventional buyer. Also, lending guidelines are also continu- ally changing and are requiring applications, ap- provals, junk fees and strict investor guidelines. They also limit the number of investment proper- ties that can be purchased by one company. On a new home purchase requiring renova- tions, private lender funds will be allocated to the purchase price, renovations, carrying costs, cost to resell and a small buffer for unexpected expenses. PROTECT YOUR LENDERS Mortgages offer the banks solid, long-term, fixed returns. The PML can put themselves in the position of the bank by directing their investment capital, including retirement funds, to well-se- cured real estate mortgages. Mortgages have ul- timate safety because if default occurs, the bank can recover its investment as the first lien holder on the property. Each property acquired should be put through a rigorous evaluation process in order to assess the profitability before the property is ever pur- chased. “lntegrity” should be an essential part of the RR’s business. Also, for the PML’s protection, OVERVIEW OF THE PRIVATE LENDING PROCESS Private Lender Funds the Deal Repeat the Process Lender Receives Documents Securing the Loan Lender Receives Principal + Interest Home is Renovated Home Is Purchased Home Is SOLD

Realty411 Magazine Featuring Patty Arvielo - New American Funding | Page 18