6 Money Trends Set To Help Investors Wholesaling Houses
A merging of multiple money and financing trends could be set to make wholesaling houses a lot easier. So what are they and how to they benefit real estate wholesalers?
1. Big Players Switching To Debt Investing
Several of the worlds giant hedge funds and private equity firms have announced that they are exiting the REO to rental business in favor of debt investing. In particular two of the United States’ biggest funds just proclaimed that they are revving up to offer multimillion dollar loans to smaller investors and finance their activity instead of competing against them.
2. Fewer Regulations
In a shocking reversal of direction regulators just wiped out the major ‘skin in the game’ requirements for U.S. banks and mortgage lenders. This will only embolden them to further loosen up underwriting criteria and get back to work competing against each other to make new loans.
3. Builders Busted
After enjoying a huge upward run early in 2013 U.S. home builders have been taking a beating over the last few months. According to Bloomberg this has resulted in some builders attempting to hold onto their positions by pushing retail buyers to their in-house lenders so that they can provide ‘incentives’ without having to correct prices. As home buyers get smarter to these tricks thanks to the media coverage more will shun new home builders and line up to get better deals from those wholesaling houses.
4. Jumbo Mortgages Set a New Record
In September the Wall Street Journal reported that for the first time ever jumbo mortgage rates have dipped below those of conventional loans. This is believed to be a symptom of mortgage lenders and banks getting aggressive about pushing money out the door and keeping capital working.
5. The Rise of Short Term Lenders
One of the best things to come out of the recent downturn and tougher regulations has been a surge in alternative lenders emerging to offer short term funding for investors wholesaling houses. In fact, whether just seeking deposit money to lock down properties and flip contracts, transactional funding for double closings or transitional funding for turning properties around there is likely more money available today for investors than in many years.
6. Private Money Lenders
Private money lending has finally emerged from being the secret of the few and restricted to the well connected to virtually being mainstream, and it offers incredible flexibility and fantastic terms for those looking to turn up the volume and flip more homes.