WITHANY DEALYOUDO, I RECOMMEND
This strategy ensures you can close the deal quickly and/or get great rates and terms. For instance, if time is on your side, traditional banks may be your best option. But note that they can take four weeks or more to close the loan, which means you could miss out on a potentially lucrative deal. If you need to close a deal quickly, consider a loan from a private real estate lender. Opportunities still abound for real estate investors. More than ever, locating those deals depends on your discipline, execution and willingness to pass on certain deals if they don’t meet your need to be conservative. With strong in-house management, resourcefulness, and effective risk mitigation, you’ll not only endure this turbulence, but you’ll also prevail. And when the good times start rolling again, you’ll be in as good of a position as anybody. • THEPATHTOVICTORYIN TURBULENTTIMES
• Housing affordability and employment and income levels For deal-level decisions, analyze micro data, such as the local market’s: • Rent versus homeownership rates • Available inventory • Home price trends • Number of cash or investor transactions, number of foreclosure listings, and home flipping activity Now, you may be asking yourself: Where can I obtain solid real estate market data? My recommendation is to read reports from CoreLogic, House Canary, Collateral Analytics, ATTOM Data Solutions, and other reputable real estate data firms. Their research will give you accurate valuations, investment trends, and detail on what strategies will be most successful (fix-and-flip, buy-and-hold, new construction, etc).
PARTNERWITHARELIABLE LENDER Things have changed in the lending world. Similar to real estate investors, lenders too are mitigating risk by being conservative in their terms and guidelines. Due to the shift in the real estate market, you can expect lower leverage, a little higher cost of capital, stronger experience requirements, and a need for more cash reserves. All this means you must understand the lender’s loan structures and your available leverage options. Since identifying deals has become more difficult, you must know these granular details about your lender in order to develop a good relationship with them. That relationship will enable you to better handle capital risks and navigate through the investment. With any deal you do, I recommend always having a backup lender. Get pre- qualified with the following two lenders: • The lender that can offer you the best terms. • The lender you know can execute and help you close the deal.
Nathan (Nate) Trunfio is a real estate lending and investing expert, with a career that has spanned the entire real estate financing spectrum. He is the
President of DLP Direct Lending Partners, a national private lender, and has developed a multimedia platform, Talking Loudly with Nate, which leverages his expert position to provide other investors insight into all aspects of real estate investing.
68 | think realty magazine :: june 2020
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