Short Sales, REOs, Flips and Rehab Loans

Investor Financing Programs

Do Short Sales lending, REO Funding, Investor Rehab Loans and Flip Lending. That is a mouthful for any lender to say. There are sources for all these programs for both commercial and residential properties. Now is the time for Real Estate Investors to make money. Many of these programs can be done with little or no money as a down payment. Sometimes the closing costs can even be rolled into the loan.

Short Sales

These are properties sold by the current owner below what is owed on them. The bank that holds the note would negotiate and approve a price less than the amount due them. This is an opportunity to get property well below market value. Many lenders will fund these transactions like any other transaction the problem is that the criteria at most financial institutions are so tough that these deals are next to impossible to finance through banks for real estate investors. There are sources for both commercial and residential short sales to be financed at little or no down payment based on the market value of the property and the credit profile of the buyer.

REO's

REO is short for Real Estate Owned. These are bank owned properties that many institutions sell that a investor may get a good deal on. One reason is carrying non performing assets on their books results in poor ratings from bank regulators. This can result in banks being taken over in the worse case scenario or in the least the will have reduce ratings by investment rating services. Secondly, these non performing assets cost money to keep. As such income producing property investors may find good deals buying REO's. As with short sales investor financing may be challenging but many of the same resources are available to finance them.

Rehab Loans

Many of these distressed properties have been neglected and sometimes vandalized and require updating, renovation and rehabilitation. As such the acquisition costs are lower but to realize the full value and be able to sell them at market value many REI's (Real Estate Investors) need to rehab the property. REI's of commercial and residential Short Sales, REO's, Foreclosures and otherwise distressed property need a source of short term financing to Purchase and Rehab their investment. The answer quite often is hard money, private funding or bridge loans.

Flip Lending

There are a group of REI's that are wholesalers. They find distressed properties at drastically reduced prices and wholesale them to other investors. These wholesalers must take title to protect their interest. This short term financing is termed transactional funding. A transactional funding loan can be for 1 day (most are) up to 90 days. This way wholesalers and legally flip property because they have gotten a loan and taken title in their name. This is usually a three party two transaction deal. Party "A" is the seller to the Wholesaler or other R.E.I. Party "B" is the wholesaler. Party "C" could be another R.E.I. or an end buyer. "A" sells to "B". "B" sells to "C" for profit. "C" rehabs, renovates and stabilizes the property to create optimal value. This can be done using transactional funding and rehab lending simultaneously. These resources are available for commercial and residential property Real Estate Investors.