Banks Want To Help Investors Wholesaling Homes
While the big banks may have been among the first to try and throw real estate investors under the bus when the housing bubble burst they can also be great allies for those wholesaling homes.
So why could banks be one of your best partners when wholesaling houses today, who do they want to fund, and how can you make sure you don’t fall into any of their traps this time around?
Coverage of emerging trends on Bloomberg today reveals America’s big banks and mortgage lenders getting aggressive about making new home loans, and especially jumbo mortgage loans. While they have recently had a larger appetite for jumbo loans due to being able to charge more interest on them, they are now desperate to put deposits to work, with some offering jumbo mortgages at a full percentage point less than conventional mortgages.
This means larger mortgages are easier to get for more affluent Americans buying luxury homes or investing in higher end rental properties. Where the end financing is easier so is flipping or wholesaling houses. Easy access to credit in this domain suggests these luxury properties can be turned over faster and for better spreads.
So for those real estate investors looking to step up their game and sales volume perhaps now is the time to move it up a notch and start wholesaling higher end homes.
Making bank contacts at all levels can also help add traction to this mission. Branch managers, loan officers and those in servicing departments can all make incredibly valuable contacts for gaining referrals, finding distressed property opportunities and speeding up the loan process for end buyers. So try to make it a habit to at least reach out to a handful of these mortgage professionals each week and lunch or have coffee with at least one of them to build relationships and increase deal flow.
However, real estate wholesalers must also watch their own backs and make sure these individuals and institutions don’t end up getting them in trouble. Greedy and unscrupulous bank employees were notoriously among the worst and most prevelant perpetrators of fraud in the last boom. They also got away with it, without penalty. So make sure you don’t sign anything that isn’t correct, don’t do it because “everyone else is” or “no one will ever find out”.
Finally for those that fear moving in more affluent circles and dealing with multi-million dollar properties, buyers and sellers – don’t. The deal is just the same, and often these home buyers and sellers are a lot easier to work with and respect that as an investor you ought to be compensated well for providing a good service more than others.
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