Dean Graziosi - 7 Ways to Finding Funding Right Now

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Find Funding Right Now - 7 Ways to Fund Your Deals In Today's Down Market.. 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

Text of Dean Graziosi - 7 Ways to Finding Funding Right Now

  • 1.Find Funding Right Now - 7 Ways to Fund Your Deals In Today's Down Market A Special Report By Dean Graziosi

2. 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. 3. 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, 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 didnt 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 4. 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: 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, 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. 5. 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 opportunit