Loans and financing Archives

 

The global recession has caused financial problems not only to companies, but also to ordinary people. People are in desperate need of money and taking out a loan can be nearly impossible if you don’t have a job. The need for small loans is increasing, but still, giving out loans to unemployed people is seen as too big a risk. The credit companies still categorize peoples ability pay out their loans by their job status. But as we all know that there are a lot of people who have jobs and can’t pay out their loans and a lot of people without jobs or with low income who manage to keep their finances in order.

When talking about business ideas most financial gurus think that there is no more room for new ideas in the credit sector. All sorts of loans are now available for the public. Still loans for the unemployed are not available or are not easy to get. Credit companies think that the risks are too big, but they are still happy to give out credit cards to shopaholics. Giving out small loans for the unemployed could give the credit companies the opportunity to make the terms of the loan better suited for their needs. It would increase their profits and the probability of people paying back their loans.

Still, taking out the loan should be made as easy as possible. Giving out loans online could be the answer. Today taking out unsecured loans for unemployed with no phone calls is almost impossible as most companies don’t usually give out loans online or without a personal visit to the bank. Maybe that is something that credit companies should look into. Small unsecured online loans could be the next big thing in the credit business. The risks are the same as with credit cards, but it can cost far less for the credit company as there is only one transaction instead of many. Transactions between different banks and accounts can cost a lot to a businesses.

Options For Financing Real Estate

You don’t need to come into big money to get started in real estate investing. What you need is to realize that there are lots of different options out there when it comes to finding money. During your investing career you will have to get creative or you will not have a career. This is not a traditional 9 to 5 and it demands that you think outside of the box and take some risks.

Owner Financing

I like this one because it give you the most options. It allows you to solve other peoples problems and ask for a favor in return and make some money in the process. Good terms on a loan can be that favor. This allows you to keep things off the books which gives you more options and allows you to close quickly, often in a matter of days. This is where creative financing lives and has huge potential.

Traditional Bank Financing

This is what most people think of first and it is probably the worst way to buy real estate but often the most familiar and straightforward. Banks have annoyingly strict requirements and it takes weeks to fill out all the paper work and wait for approvals. This is not the ideal method of purchasing investment property but sometimes it the only way to get your hands on the cash, and if the deal is good enough, go for it.

Friends and Family

Many a fortune has been made on a family loan and many a Thanksgiving dinner has been ruined by similar loans. Be on the same page as family or friends that give you a loan and make it a favor for them that you are getting them into real estate. Make it legitimate and legal for both parties protection, hand shake deals make you feel good but are not the best idea. With this type of loan you can really get good terms and lots of flexibility. Enter into these arrangements carefully, ruining family or friends ships in the name of profit is not wise.

Credit Cards

As frightening as it sounds credit cards can be a great option for fast cash. If you need short term cash and don’t have another option go for it but be certain of the deal. Make your money when you buy not when you sell and make sure you will be able to pay off the balance as soon as the deal is done. It is common to finance the improvements to a flip on credit. Risky yes, profitable yes, for everyone, NO

Hard Money Lenders

Similar to credit cards but a little more cut and dry. These are private investors with lots of cash. They can close fast but for all of this convenience you will pay a hefty price of 15-25%. Dangerous yes, but if used wisely very effective. Look through the yellow pages or contact your local real estate club to find these individuals.

Personal Savings

The old fashioned way is coming back in style. Spend your own cash and not a penny more. Borrow against your retirement, spend your retirement, or even your kids college funds. Hey, if the deal is right you make your money when you buy and it is nearly impossible to loose your money in the long term. As has been said before real estate is the single most certain way to get and stay wealthy in America. Make your money how ever you make it but hold it in real estate.

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