Find Funding Right Now - 7 Ways to

Fund Your Deals In Today's Down

Market

A Special Report By

Dean Graziosi

If you listen to the media, you'd get the idea that real estate investment is taking a beating because lenders simply aren't coming up with financing. Nothing could be further from the truth. The sources for real estate funding are diverse and available anywhere a property is located. Some are localized, and others are more national in nature. The important thing to know is that you can get financing for your real estate investing, and this report will give you specific resources, links and information to help you to get your deals done.

We're going to give you specific go-to resources that will help you to locate financing in these seven major funding resource categories:

��. Community Banks and Credit Unions

��. Friends and Family

��. Government Funding and Grants

��. Investors

��. Hard Money

��. Lines of Credit

��. Short Term Funding

Some of these will have overlapping resources, and this report will be a lasting and valuable addition to your real estate investing toolkit. What's important is that you'll be hard pressed to find a deal you can't get done with one or more of these funding sources at your disposal.

Funding Resource # 1 - Community Banks and Credit Unions

Community banks are formed with a charter to help develop and support the communities in

which they do business. Community bankers build long term relationships with their customers

and local business, with the goal of building deposits and lending money profitably.

They want to do business in the community, and are usually easier to deal with than the large

regional or national banking establishments.

When working with a community bank, there is more "relationship" business than hard

numbers. The local banker comes to know you, how you do business, what you're doing that

helps the local real estate market, and they will use this relationship information in their lending

decision-making.

Of course, if your credit score is dismal, and you have no assets, even a local banker might

decline to handle your financing. But, all other things being equal, you will usually have a better

chance of getting your real estate funding from a local bank than from some of the larger lenders.

On their "About Community Banking" page at http://icba.org, the Independent Community

Bankers of America (ICBA) website makes these points:

Community banks focus attention on the needs of local families, businesses, and farmers.

Community banks channel most of their lending back into the local community, while

megabanks lend across state lines as a matter of course.

Officers at community banks live in the community and are deeply involved in the area's

economy and activities.

Many community banks are willing to consider character, family history and

discretionary spending in making loans.

Community banks offer nimble decision-making on business loans, because decisions are

made locally. Megabanks must often convene loan approval committees in another state.

With almost 8000 banks and 50,000 locations around the country, community banks constitute

almost 96% of banks. In March of 2009, the ICBA released a report titled: "The Impact of the

Financial Crisis on U.S. Community Banks: New Opportunities in Difficult Times." Here's a

quote from that report:

“While the financial crisis has affected banks of all sizes and in all regions,

community banks continue to lend and are typically faring much better than the

larger banks because they didn’t participate in the high-risk activities that led to

problems we are experiencing,” said ICBA President and CEO Camden R. Fine.

“This survey clearly shows that the vast majority of community banks are well-

positioned to survive the economic downturn and, perhaps, even reclaim some of

the customers from larger banks.”

The lower risk lending practices of community banks in the past are now contributing to their

present and future prosperity. While the huge banks and mortgage companies were lending to

marginal borrowers and devising ever more risky loan types to get people into homes they

couldn't afford, community banks were doing pretty much what they've always done. They

worked with their borrowers based on long-established lending criteria, and generally used only

proved loan products.

So, just when the media is lamenting the lack of money for mortgages, and they are telling us

that mortgage lenders have become overly cautious, reducing lending to a trickle, we find that

our community banks are doing just fine. They're increasing deposits from those who are

returning to their banks from the megabanks that are reducing their lending.

The ICBA site is a great place to start if you want to locate community banks in your area.

Their Community Bank Locator page is located at:

http://www.icba.org/consumer/BankLocator.cfm?sn.ItemNumber=51757

This lets you do a search by city and state, or zip code. It maps out the banks in the area, and

you can then do more research. You can take a link from their map right to the local bank's

website for more information.

Credit Unions are another resource that can be more localized. They can also be quite large, but

are member-owned and restrict their members to a group that has some common characteristic,

such as employment.

There are state educator credit unions, large corporation employee credit unions, and many other

groups with a common interest or characteristic. Only members can deposit and borrow from a

credit union, and their boards are elected by the membership. Interest rates are usually set by a

board elected for that purpose as well.

Much like community banks, many credit unions are focused on the local area, with a charter

that states their local and member focus, and that their business is set up to help and promote the

interests of their members. Historically, like community banks, their lending practices have been

more conservative, and they are in better health during financial crises than the large banks and

credit card issuers.

Now that we've said you must be a member, the question is whether there is any local credit

union in which you have membership eligibility. It's not as difficult as you might think. Using

the "Find a Credit Union" page at http://www.creditunionsonline.com, it is clear that there are a

lot of them to choose from in every state.

Just looking at an example search in Texas, alphabetically we find a credit union in Abilene, TX

that is community focused. Membership is based on your residence in that area, or possibly your

relationship to someone who resides in the area.

So, it's very likely that you can locate a credit union in your investing area that will allow you to

join based on your residence, or some other employment or avocation. All of the community

focus things we talked about above in community banks apply here. There is a mandate for these

credit unions to help the economic health of their membership. And, the membership runs the

show. Find one and join. The initial deposit requirements can be quite low, some only requiring

a $25 deposit to join. Then you can examine their lending policies and programs, possibly

finding an excellent resource for your future real estate investment funding needs.

Funding Resource # 2 - Friends and Family

We've all heard the admonition to never lend to or borrow from a family member or friend. It's

true for many people and in many situations. It's just as true that many real estate investors never

realize great success because they don't take the time and effort to learn everything that it takes

for success. Borrowing from a family member or a friend is no different than going to your local

bank, if you treat it that way.

First, we will assume that you've done a great deal of research and gathered data to support it.

You've taken this real estate purchase through the hoops, checking return on investment,

completed a rental income analysis, gathered comparative market statistics to make sure it's a

good buy, researched demographics data to determine long term area economic influences, etc.

You have a firm handle on your own ability to repay the loan, and you've put down on paper

your income and expense items to verify that you can carry the deal to its profitable conclusion.

If you're flipping, you know the duration and costs of holding and improvements.

If you're holding it for rental, you know what you can reasonably and conservatively expect for

rental income, how much may be lost to vacancy and credit problems, and what your expenses

will be in maintaining the property.

To this point, it's all about doing your homework to document the value of the deal, and that you

have the ability financially to meet the obligation you're going to incur. This is all stuff you'll

have to do with any commercial lender or bank.

Why would you expect your friend or family member to confidently loan you money if you can't

show them the same information and data? In fact, you may have the ability to get a loan from a

bank, another investor, or against a line of credit. It just may be much more beneficial,

especially as regards the interest rate you'll pay, to work with a family member or a friend.

This is where you aren't really asking for a favor. Instead, you're bringing an opportunity to your

family member or friend. You wouldn't be approaching this subject if they didn't have some

money tucked away somewhere. Or, maybe they have significant equity in a home or other

property, against which they can borrow at low interest rates.

You, on the other hand, may be looking at much higher rates from investors, or in the hard

money loan market. So, your friend or uncle can be approached with the opportunity to receive a

better return on their investments, while you can still save money by avoiding higher rate

options.

The Longer Term Loan

Because you've done your financial homework, you can lay out an investment opportunity for

your friend or your family member. Yes, they're loaning you money, but they're doing so

because they see a better investment than the one where their money is placed right now. If

you're securing the loan with the property, their security level goes up as well. Let's look at a

real life example, with numbers gathered in mid 2009.

You want to purchase a rental property for $100,000, and you need to put $15,000 into

improvements to rent it out. You have the $15k, but need the $100k as a loan.

You have data and local market numbers to show that the property is worth a good deal

more than this $115,000 investment.

Your uncle has this amount or more in Certificates of Deposit earning only 2.0% on

money invested for at least one year, and it is invested for retirement income.

You can rent this property out for $800/month based on conservative local rental rates.

http://bankrate.com is showing that the 2.0% CD, compounded monthly, will yield

$2018/year, or $168/month for your uncle's retirement income.

The same site shows that a $100,000 mortgage would have a principle and interest

payment of $477/month at a 4.0% rate.

You can't get a 30 year mortgage right then for less than 5.5%.

Even with taxes, insurance and maintenance, this looks like a positive cash flow to you,

before any property appreciation, of about $170/month.

Your uncle is getting a much better monthly income from this loan than from the CD

where his money is now, and it's secured by a mortgage on a property worth more than

$140,000 according to your data.

As you can see, you're not coming "hat-in-hand" to your uncle for a favor. You're offering a

valid and highly profitable investment to him. And, with this interest rate, you can realize a

positive cash flow on the rental home. These are very conservative numbers, with the possibility

of a much better deal for both sides if you find a bargain in the market. It's actually more

difficult to illustrate the value of friend and family financing for a long term purchase than it is

for a flip or shorter investment.

If you have located a great buy on a distressed property, and you have done the research to prove

that you can flip it for a substantial profit in 60 days, even after rehab costs, then we have a much

better investment opportunity for your friends and family. And, it's going to increase your

profits as well.

The Short Term Loan

You're into locating and flipping distressed properties, and there are some really good buys right

now in your market area. Most need repairs and rehabilitation work, but you can locate

properties that are close enough to rent/sale-ready, and needing only 25% or so in rehab

expense. Let's look at another example, using our home from above again:

You can purchase the home for $100,000, and it needs $15,000 in work.

It's a distress situation, and you have determined that the property should sell

conservatively for $149,000 in less than 60 days.

This example will also work if you are planning on keeping the home for rental, but can't

get a permanent loan until work is completed. Either way, you need some financing for

about 60 days or so.

You locate and market your properties yourself, so you expect to sell without listing with

a Realtor, thus your cost of sale is about 1.5%, or $2250 or so.

This means that selling for $149,000, minus closing costs, minus rehab and initial $100k

cost will be $149,000 - $117,250 = $31,750. There's even room for a Realtor

commission here, so you're profitable either way.

Your uncle can pull out his funds with a penalty, bringing his rate down to 1.0% on his

CD investment. So, he'll lose around $1000 over the course of a year if the investment

were left at the bank.

You, on the other hand, would have to pay more than 8% to a hard money lender to get

these funds for the 60 days, and some origination and other fees would be involved.

You've determined that your costs for this type of short term loan would be more than

$4000, fees and interest for the period.

You can pay half that to your uncle, doubling what he loses in penalties for pulling out of

the CD early. However, he's going to get a lot of that back anyway, as he'll put it right

back into a CD 60 days from now, losing only that short period of interest at the 2.0%

original rate.

All of these numbers are just examples, but they're based on experience and actual market

interest rates. The person with savings is financing everyone else, and getting a paltry return in

the process. If you have done your homework, and you've located the right deal, you're offering

your friend or family member an opportunity to be a lender instead of a saver, and get rewarded

handsomely in the process.

Funding Resource # 3 - Government Funding and Grants

This isn't the longest section of this report for no reason. Without a doubt, the single greatest

source of funds for mortgage and real estate lending is the government, or programs backed by

governments. This is both Federal and state governments.

There are so many sources, and so many loan programs that we can't hope to lay them all out for

you here. However, we'll give you the links and sources where you'll be able to ferret out money

for just about any purpose you can divine.

Of course, we're concentrating on real estate funding here, so that's our focus in presenting these

sources. Let's start big and drill down, by presenting Federal government sources and programs

first, then looking at what individual states, and even local governments, have to offer in the way

of real estate funding and programs to guarantee loans.

U.S. Federal Government Funding and Programs

Don't you just love the first of every year, when you're pulling together all of your federal tax

information, doing accounting, and getting the bill from your accountants for figuring your

taxes? Then you have to pay the government.

We pay for the privileges we enjoy in this country, and we should. But, isn't it better if we can

get back a bit more for what we contribute? Federal direct loan and loan guarantee programs are

huge, and millions of people own homes because they exist.

All of these programs aren't just for a single family primary homeowner. The government

encourages investing in real estate by providing programs and direct loans that allow investors to

purchase and finance multiple properties, as well as multi-family and commercial properties.

Too much of our economy is based on new construction to allow the American dream to

founder. So, let's look at some of the many ways in which you can get help from the U.S.

Government in funding your real estate investments.

We can talk about specific programs and government agencies, but here's one quote from

WashingtonPost.com in May of 2009 that gives you a feel for the commitment of the

government in keeping real estate buying and selling on track: "Starting in July, the Fed will

allow investors participating in its Term Asset-Backed Securities Loan Facility (TALF) to

purchase existing securities backed by loans for apartment complexes, office buildings, retail

shopping centers and other commercial property. In effect, the Fed will provide investors with

large loans to buy highly rated securities."

Opportunity right now is better than at anytime in recent memory. With all of the bad news on

the housing and commercial real estate markets, the government wants to bolster public

confidence by throwing money at investors and home buyers.

They want foreclosures to get purchased, and they want inventories to come down in order to

stabilize prices. The only problem most of us will face is just in locating the best deals with so

many government agencies, programs and initiatives out there.

Going first to the Loans > Housing tab at http://www.govloans.gov, we get an overview of the

largest of the federal mortgage loan programs for the housing sector. You get a description, as

well as links to programs like these:

Basic FHA Loans - This program can help individuals buy a single family home. While

HUD does not lend money directly to buyers to purchase a home, FHA-approved lenders

make loans through a number of FHA-insurance programs.

Veterans Administration Loans - For veterans, this program guarantees no down

payment loans.

Section 203k Home Improvement Mortgage Insurance - This helps homeowners to

finance improvements during a purchase, rolling into permanent financing upon

completion of work.

Though the programs just listed are meant for primary homes for borrowers, many investors do

just that. They purchase and live in a home while they remodel and improve it, then selling it

later for their profit. So, don't overlook these avenues if you're doing this type of investing.

There are also some opportunities to assume these mortgages if a homeowner is in trouble.

Check out the programs to see what is being allowed at the time, as they tend to modify and

loosen requirements when trying to stabilize a troubled housing market.

At this same site, at the Business tab under Loans, you find lending programs specifically

designed for and directed at businesses. Real estate investing is a business, and you should

check the resources out on the site.

Some of these programs could provide long term or short term financing for a real estate

purchase, renovation, or even for expanding your operation with your own building, perhaps

renting out office space in your owned and self-occupied structure.

Fannie Mae Helps Investors - Are you an experienced real estate investor with good credit?

Even if you lack a great deal of experience, you can illustrate your knowledge and ability and

perhaps participate in the newer more liberal Fannie Mae programs for investors.

In May 2009, Fannie Mae announced that the previous limit of four financed investment

properties was being increased to ten. That's a big opportunity for single family home investors,

as well as those investing in included 2 to 4 unit properties. It's not a money giveaway, as the

requirements are set up to encourage those with the credit score and some funds for investment:

A 25% minimum down payment is needed to buy a single family home.

Buying a two to four unit property requires a minimum down payment of 30%.

A real estate investor must have a minimum credit score of 720 in order to qualify.

The investor cannot have any mortgage delinquencies within the last 12 months.

There cannot be any history of bankruptcy or foreclosure within the last seven years.

Rental income documentation with two years of tax returns showing all rental property.

6 months reserves of principle, interest, taxes, insurance is needed for each property.

A limited cash out refinance is available with a maximum of 70% loan to value.

If this shoe fits you, this could be a great source of funding for your real estate investing. The

government is telling you that they want more investment from those who can meet these

criteria, so you can count on getting some attention from lenders if you fit.

Freddie Mac Offers Investment Loans - In a data sheet from their site at

http://freddiemac.com, this institution encourages mortgage brokers and lending originators to

work with them to make 1 to 4 unit loans to investors. From their benefits statement:

Benefits for Your Borrowers

Investment Property Mortgages help your borrowers:

Obtain flexible financing options for qualified investment-oriented borrowers.

Leverage a variety of mortgage product types to further customize home financing to

individual cash flows and financial situations.

It certainly sounds like they're looking for your business. They also state that there are cash-out

opportunities, as well as just straight mortgages. With the government pouring money into

housing, and both Fannie Mae and Freddie Mac being reorganized and strengthened by

government initiatives, don't overlook these excellent resources for mortgage funding.

HUD Programs for Multi-Family Properties - Some of the HUD programs will show up at the

FHA program sites, but an excellent place to look for some very focused loan programs for

investors is here: http://www.hud.gov/offices/hsg/mfh/progdesc/progdesc.cfm. There are a

number of niche programs just for investing in multiple units. Here are some highlights:

Rental Housing: Section 207 Manufactured Home Parks: Section 207 Cooperative Units: Section 213 Rental Housing for Urban Renewal and Concentrated Development Areas: Section 220 Rental and Cooperative Housing: Section 221(d)(3) and (4) Single Room Occupancy (SRO) Projects: Section 221(d)(3) and (4) Two-Year Operating Loss Loans: Section 223(d) Purchase or Refinancing of Existing Multifamily Housing Projects: Section 207 / 223(f)

Rental Housing for the Elderly: Section 231 Nursing Homes, Board and Care and Assisted-Living Facilities: Section 232 / 223(f) Construction or Substantial Rehabilitation of Condominium Projects: Section 234(d) Supplemental Loan Insurance for Multifamily Rental Housing: Section 241(a) Qualified Participating Entities Risk-Sharing Program: Section 542(b) Housing Finance Agency Risk-Sharing Program: Section 542(c)

Some investors should find this site of special interest. If you're looking for areas of real estate

investment off the beaten track, with opportunity related to the niche or lesser competition, some

of these programs may be just what you need.

There is also a Grants tab at the HUD site. HUD makes more than $1 Billion available for grants

in 35 programs. That's pretty amazing, as grants are better than loans. After all, if you don't

have to pay it back, that's a big draw! A great deal of this money is directed at construction or

rehabilitation of housing to better serve the elderly and disabled. Another big chunk is set aside

for rural housing, so you don't have to be in the big city to take advantage.

There is a huge amount of grants information at the HUD site. They tell you who received

money in that past, and for what type of projects. This can give you a great feel for what they're

trying to incentivize, and see if you have a project that might fit. Many programs are specifically

designed for locales or states, and you can find those by state links here:

http://www.hud.gov/local/index.cfm. You must be signed up at Grants.gov to be eligible to

participate in HUD grants, so go there first and get registered.

Let's just give you a quick-list of links here for these and other federal government loan

programs and agencies:

Website

www.grants.gov

www.hud.gov

www.govloans.gov

www.homeloans.va.gov

www.irs.gov

www.huduser.org

www.fhainfo.com

More in the way of grants and gifting options are available at these links:

www.ameridream.org

www.giftamerica.org

www.governmentgrantlist.com

www.Governmentgrantassistance.org

www.grantsourcedirect.org

www.grantsforhomes.com

www.freegrantsforhome.com

www.governmentgrantlist.com

State Funding Resources

The National Council of State Housing Agencies at http://ncsha.org is a great place to start when

investigating more localized mortgage funding options. One of the main stated purposes of this

organization is to leverage the federal initiatives in housing in the states. One of the programs is

HOME Investments Partnerships Program. "The HOME Investment Partnerships program is a federal

block grant that provides states and localities with a flexible funding source to meet their diverse affordable housing needs. States receive 40 percent of total HOME funding, and localities receive 60 percent based on a formula determining need."

Keep in mind during your research into all of these funding options and programs that you may

not always be the borrower. When you're re-selling your properties on the open market, you'll

want all of the knowledge you can get to help a buyer to get a loan for the purchase. When it

comes to the elderly, disabled and financially challenged buyer, many times price takes a far

second position behind financing in making a purchase decision. If you can provide them with

help in getting down payment assistance, structure modification or energy efficiency

improvements, you can likely get a higher price for the property.

State Agencies

Some states have multiple agencies to aid in home acquisition, rehabilitation and mortgages.

Some have more resources than others. However, just about all of them have some programs

that can help you to finance your real estate investing, or to help buyers for your properties. Use

these links to access their websites for complete information and programs:

Alabama Housing Finance Authority www.ahfa.com

Alaska Housing Finance Corporation www.ahfc.state.ak.us

Arizona Department of Housing/Arizona

Housing Finance Authority www.housingaz.com

Arkansas Development Finance Authority www.arkansas.gov/adfa

California Housing Finance Agency www.calhfa.ca.gov

California Tax Credit Allocation Committee www.treasurer.ca.gov/ctcac

Colorado Housing and Finance Authority www.chfainfo.com

Connecticut Housing Finance Authority www.chfa.org

Delaware State Housing Authority www.destatehousing.com

District of Columbia Department of Housing

and Community Development www.dhcd.dc.gov

District of Columbia Housing Finance Agency www.dchfa.org

Florida Housing Finance Corporation www.floridahousing.org

Georgia Department of Community

Affairs/Georgia Housing and Finance Authority www.dca.state.ga.us

Hawaii Housing Finance and Development

Corporation www.hawaii.gov/dbedt/hhfdc

Idaho Housing and Finance Association www.ihfa.org

Illinois Housing Development Authority www.ihda.org

Indiana Housing and Community Development

Authority www.indianahousing.org

Iowa Finance Authority www.iowafinanceauthority.gov

Kansas Housing Resources Corporation www.kshousingcorp.org

Kentucky Housing Corporation www.kyhousing.org

Louisiana Housing Finance Agency www.lhfa.state.la.us

MaineHousing www.mainehousing.org

Maryland Department of Housing and

Community Development www.dhcd.state.md.us

Massachusetts Department of Housing &

Community Development www.mass.gov/dhcd

MassHousing www.masshousing.com

Michigan State Housing Development

Authority www.michigan.gov/mshda

Minnesota Housing www.mnhousing.gov

Mississippi Home Corporation www.mshomecorp.com

Missouri Housing Development Commission www.mhdc.com

Montana Board of Housing/Housing Division www.housing.mt.gov

Nebraska Investment Finance Authority www.nifa.org

Nevada Housing Division www.nvhousing.state.nv.us

New Hampshire Housing Finance Authority www.nhhfa.org

New Jersey Housing and Mortgage Finance

Agency www.nj-hmfa.com

New Mexico Mortgage Finance Authority www.housingnm.org

New York City Housing Development

Corporation www.nychdc.com

New York State Division of Housing and

Community Renewal www.dhcr.state.ny.us

New York State Housing Finance Agency/State

of New York Mortgage Agency www.nyhomes.org

North Carolina Housing Finance Agency www.nchfa.com

North Dakota Housing Finance Agency www.ndhfa.org

Ohio Housing Finance Agency www.ohiohome.org

Oklahoma Housing Finance Agency www.ohfa.org

Oregon Housing and Community Services www.ohcs.oregon.gov

Pennsylvania Housing Finance Agency www.phfa.org

Puerto Rico Housing Finance Authority www.gdp-pur.com

Rhode Island Housing www.rhodeislandhousing.org

South Carolina State Housing Finance and

Development Authority www.schousing.com

South Dakota Housing Development Authority www.sdhda.org

Tennessee Housing Development Agency www.thda.org

Texas Department of Housing and Community

Affairs www.tdhca.state.tx.us

Utah Housing Corporation www.utahhousingcorp.org

Vermont Housing Finance Agency www.vhfa.org

Virgin Islands Housing Finance Authority www.vihfa.gov

Virginia Housing Development Authority www.vhda.com

Washington State Housing Finance

Commission www.wshfc.org

West Virginia Housing Development Fund www.wvhdf.com

Wisconsin Housing and Economic

Development Authority www.wheda.com

Wyoming Community Development Authority www.wyomingcda.com

Funding Resource # 4 - Investors

Let's agree on the term "investors," as it isn't necessarily someone who wants to invest in "real

estate." It can be anyone, or any business, that invests for profit, and it's a transaction in which

they fund a person, business or project for a specified period for profit. They invest money, and

expect a return on their investment that is commensurate with their risk and current money rates.

These investors make money with money, so it's a very structured and market-driven activity.

That's not to say that we're not also dealing with other real estate investors, as we may be. It

could be a joint venture, in which you provide certain services and expertise, and the investor

provides funds, expecting their profit from the sale or rental of the property. Whichever the case,

it's all about someone providing you with financing for their eventual profit. And, it doesn't

necessarily always need to involve short term funding. There may be instances where you'll

receive funding that participates in return on their investment over the long term, out of rental

income is one example.

Let's look first at general investors, not necessarily looking only for real estate investments, but

more a place to use money to make money. Some use terms like venture investors, or angel

investors. You won't be paying bank rates for this type of money. In some cases, their

participation will be for a significant portion of your profits rather than a stated interest rate.

This isn't a problem if your needs are met, and your profit requirements are fulfilled as well as

theirs. One website that can give you an education in how this might work is

http://go4funding.com. This site tries to match investors with those needing funds for all types

of projects, businesses, or just dreams.

The site has a category titled "Construction & Real Estate," right up our alley. Here are a few

examples of the posts there by those seeking funds:

"I am a new investor with the education to pursue real estate investing. I need the capitol

to buy my first investment property leading the way to building a successful real estate

investing business. ..."

"I am seeking investment funds to acquire multifamily apartment buildings requiring

cosmetic or light rehabilitation. All units will be refurbished/rehabilitated or upgraded to

community standards. U..."

We don't know how successful these two investors may be with this site, but this does give you a

picture of the process, and it lets you know that there is a supply of money to address demand.

Those with funds would browse these funding requests and possibly contact them for a

discussion and possible investment.

This approach may work for some, but it's far more likely that you'll need to join investor groups

around your area, where you can meet people who join just to locate opportunity for their

investing. They are there to locate promising real estate investors and entrepreneurs to get in "on

the bottom floor." Networking for business in your area is a good method to meet people who

could end up being investors in your future deals. Don't overlook community bank officers as

resources. They may not want a deal, but could recommend you to someone they know who

does this type of investing.

Other Real Estate Investors

Other real estate investors can be a great source of funding for your ventures and purchases.

This can take many forms.

Short term financing for renovations for a percentage of flip profits.

The same, but for a stated interest rate and fees paid before sale of the property.

Even without renovations, one investor may fund another who has located a great deal. If

you lock up a super deal, you can get another investor to participate for a portion of the

profits in a flip, or even finance your purchase with an agreed-upon immediate profitable

sale to them at closing.

You'll want to join local and regional real estate investment clubs and websites to meet other

investors. The more real estate investors you know, the more likely it is that you'll be able to

locate one who wants your deal when it's time. Many real estate investment clubs even have

areas on their websites where their member investors post their funding needs, and other

members can look them over for opportunity.

Not every investor in real estate wants to deal with repairs and renovations. Many don't even

want to deal with the resale of the property. They have the money, and are willing to invest in

your deal for a good return with little involvement on their part. Some will even get into a deal

over the long term, especially if they can see that your property rental prospects for income are

good, and they can get a better interest rate on your mortgage than where they currently have

their money parked.

Finding a Local Real Estate Investor Club or Group

Joining a real estate investment club or group is a good move for the novice or the experienced

investor. The contacts you make there will include people and businesses that you'll want on

your team in the future. Whether it's a remodeling contractor, a mortgage broker, or other

investors, the more contacts you make, the more resources you'll have at your disposal. If you

aren't familiar with groups in your area, do a search on the Web for "YourTown real estate club,"

or try one of these resources:

http://reiclub.com/real-estate-clubs.php

http://www.nationalreia.com/

It's Business - Be Prepared to Prove the Deal

Networking and making friends in real estate clubs and business is an excellent lead-in to

funding resources. However, these are all experienced investors, whether in real estate or

another area of investing. They know money, how it works, what makes it grow, and what

makes it shrink. Don't approach an investor for funding unless you have your "ducks in a row."

Have area economic and demographic data to support valuations

Do comparative market analysis to get true market value of properties

Have firm and reliable estimates for all repair and renovation work

Develop a realistic schedule from investment to liquidation and payment to investors

In short, have hard data to back up all your plans, not opinion or suspect information

One aspect of using funding from other investors is the need for you to "share the wealth." Don't

give away profits you need, or be an easy mark. But, understand that every deal will need to

result in everybody being a winner. If you want the wheels greased for your next proposal, the

surest way is to have a very happy investor from the last one.

Funding Resource # 5 - Hard Money

It's easy to be confused about the term "hard money loan," as it is in its simplest form a loan

backed by a security position in real estate. Of course, that's what most mortgages are as well.

Basically, the lender provides funding which is secured by a first lien on the property. Some

differences that are common to the hard money loan are:

The quick sale value of the asset is usually used for the Loan To Value (LTV) calculation

A common LTV for hard money loans is 60% to 70% of the quick sale value of the

property

Credit worthiness isn't necessarily a factor, as the loan is secured at a LTV that covers the

lender in case of default

These are smaller lending companies and private lenders in many cases

Though not the same as a bridge loan from a bank, hard money loans are also used over

the short term to fund in transition or during rehabilitation for resale

Interest rates for hard money loans are significantly higher than other traditional bank and

mortgage loans in order to cover the higher risk involved

Hard money lenders generally require that they be in a first lien position, but sometimes the

equity in the property will not allow the loan amount to be sufficient with a 60% to 75% LTV.

In these cases, cross collateralization is sometimes a strategy.

In cross collateralizing, the lender will take liens on other properties owned by the borrower to

make up the difference in the short LTV on the primary loan. "Blanket mortgages" are one way

in which this is accomplished. Let's say that you own several rental duplexes, most with

significant equity, or even no mortgages at all.

You want to purchase and rehab a new property and need a hard money loan. However, the LTV

of the property isn't such that the hard money lender's first lien position is enough to get them to

do the deal. You could execute a blanket mortgage covering multiple properties to provide the

security required by the hard money lender.

Hard money loans have significantly higher interest rates, as well as higher points involved in

originating the loan. So, you really need to know that you've exhausted other more traditional

lending resources.

Perhaps it's a timing issue, with a property about to go into foreclosure, and you need to get the

deal done quickly. If so, just run the numbers carefully for profitability after the higher loan fees

and rate. Hard money is a viable and valuable resource for you, as some of the best deals are

going to be those that need to get done fast.

Hard Money Lender Resources

1st California Hard Money in CA at http://1stcalhardmoney.com/

1st Equity Lending Corp. in CA at http://www.betterloansandrealty.com/

1st Quick Funding nationally at http://www.1stquickfunding.com/

Blazevic Funding Group nationally at http://www.blazevicfunding.com/

BlueWater Funding, LLC in multiple eastern states at

http://www.bluewaterfundingllc.com/

Brookview Financial, Inc in multiple states nationwide at http://reiclub.com/hml

EDC Capital Partners in multiple states at http://www.equitydevelopmentcorp.com/

Gala Resources, LLC in multiple eastern states at http://www.galaresources.com/

Lending Associates for west coast, AZ & NV at http://www.lendingassociates.net/

Valuation Mortgage Capital in southeast states at http://www.valuationmortgage.com/

These are just a few of the larger lenders covering wider areas. There are many more that you

can find with a search on your state and "hard money." It's just about always possible to find

money for a real estate investment deal if you want it.

The key is to nail down the profitability of the deal, then start working your way down the list of

resources from the least expensive. If you can't make it work with less expensive resources, hard

money is the way to go.

Funding Resource # 6 - Lines of Credit

You've done a lot of marketing, bandit signs, classified ads, websites and more. Suddenly you

get a call from a distressed homeowner who tells you that they're about to lose their home, have

tried everything, and they just want to sell it before foreclosure. And, the deal looks like a big

profit and fast flip situation. There's only one problem. You must get the deal done FAST, and

with cash. There's not even enough time to go find a hard money lender and prove the deal to

them.

It's no problem for you. You pull a special checkbook out of the desk and simply write a check

for the purchase. This special check is written on your line of credit at the local bank. You've

just borrowed a significant sum of money without even a phone call, much less a long

application, property inspection or valuation exercise.

You know it's a great deal, and that's all that's necessary. You take possession, do some repair

work, and flip the property for a profit. You then just pay off that temporary line of credit loan,

and you have the money available again to do another deal.

Local banks are a good resource for you if you have an operating business with good cash flow,

or assets to pledge for collateral for a line of credit. It's just an account set up at the bank that

takes your business cash flow and other assets as collateral against future lending.

A maximum amount is set, and you can access funds up to that amount at any time and

immediately when you need them. Your line of credit is reduced by what you have as

outstanding loans until they're paid off, and it bounces back up to the limit.

This can also be the way to finance remodeling and major work on a home you've purchased via

other mortgage resources. You get a mortgage loan to acquire the property, but use your line of

credit for the work. Once you get the job done and sell the property, you pay off the mortgage

and the line of credit loan, and you're ready to do it all again for more profits.

Other Line of Credit Resources

Though your local bank should be where you start, sometimes a larger resource is necessary, or

your local bank simply doesn't want to do this type of lending for whatever reason. There are

huge national banks and lending resources advertising their willingness to do line of credit

financing for business. These include:

GE Capital at

http://gecapsol.com/cms/servlet/cmsview/GE_Capital_Solutions/prod/en/index.html

KeyBank Lines of Credit at https://www.key.com/html/business-banking-loans-lines.html

Wells Fargo Lines of Credit at https://www.wellsfargo.com/com/bus_finance/lines_credit

BusinessFinance.com at http://www.businessfinance.com/capitalsearch.aspx

Funding Resource # 7 - Short Term Funding

One of the fallout effects of the mortgage and housing crisis is more difficulty in closing back-to-

back transactions. This would be when you're buying and selling as close to simultaneously as

possible. In the past, most title companies would allow the use of funds from the end buyer to

close on the purchase. Now, it's just not possible in most cases. You must fund the purchase

from your funds, then you can close the sale later.

Dean Graziosi teaches some really amazing strategies to buy and sell property with little or no

money down, an "other people's money" set of strategies. So, it is important for us to help you to

make these great deals happen, even if you don't have immediate cash. Short term funding, or

"flash funding" as one lender calls it, is one way to get the funds you need for hours to a couple

of days while you close a purchase and then sell to your buyer.

Let's take a look at a typical situation that Dean's clients encounter regularly. The investor

locates an amazing short sale, pre-foreclosure, or foreclosure deal. They also have cultivated a

list of buyers, some being other investors who value their ability to locate deals. There is room

for the investor to make a profit from buying the home and immediately flipping it to the buyer

after the closing on the purchase. The investor doesn't have, or they don't want to use, their own

funds to close on the purchase. But, it's going to be a very fast flip, some closing within minutes

to hours between deals. Then there is the waiting for funds wiring, verification, etc. So, this

investor needs some very short term funding to make it all happen.

Dean's investor students and clients love to use Coastal Funding at http://coastal-funding.com.

Here are some bullets from their home page:

Most Deals 2 points!

No LTV

No Appraisals

100% Funded

No Credit Checks

No Income Verification

No Up Front Fees

So, for a 2 point fee, you can secure the funds to close the purchase, and immediately resell the

property to the buyer. You just repay the very short term "flash funding" loan and pocket the

difference. Even better, using the coupon code "Dean Graziosi," investors get a special deal

from Coastal Funding because they know they're getting an educated investor.

Bringing It All Together - 7 Awesome Funding Resources for Investors

Never stop learning and increasing your real estate investment education. This report will be

invaluable to you in locating funding for any type of transaction or series of transactions that you

locate out there. Too many uneducated investors have had to pass on amazingly profitable

opportunities because they had no idea of how to fund them, either in the short or long term. We

want you to be able to take advantage of EVERY opportunity you uncover, and the resources in

this report virtually assure that you can do that.

Funding Resource # 1 - Community Banks and Credit Unions

We've helped you to understand the motivations of community bankers and credit unions, as well

as how to work within their charters to get creative financing that isn't available from large

national banks.

Funding Resource # 2 - Friends and Family

Your're not bringing them a request for help, but a valid investment that is better than their

current savings accounts and certificates of deposit. You've learned how to present the deal and

get their support.

Funding Resource # 3 - Government Funding & Grants

This wasn't the longest section for no reason. The federal government and state programs have

helped more real estate transactions to fund than any other type of backing. We gave you links to

sources for billions of dollars every year in real estate funding.

Funding Resource # 4 - Investors

You've learned who these investors are, where to locate them, and how to package and present

your deal to get the funding you need.

Funding Resource # 5 - Hard Money

For a concept unknown to so many, hard money lending is a huge part of the real estate

marketplace. You learned here what it is, how much it can cost, and when it's appropriate. We

give you links to hard money lenders around the country.

Funding Resource # 6 - Lines of Credit

This one section could be the most exciting of the resources we've presented to you here. If you

have assets and cash flow, banks will let you access money at will, when you need it, and for the

length of time that you need it.

Funding Resource # 7 - Short Term Funding

Don't let a lack of 48 hour funding keep you from flipping a property for major profits. We

show you where to look for "flash funding" to close those back-to-back deals.