#IzmahShavu post 5 Hello everyone, I want to talk today about financing transactions. Following the post…
# Initiated week Post 5
Hello everyone,
I want to talk about transaction financing today.
Following the previous post on buying properties for Buy and Hold 'atku tu asked me a few people about transaction financing options, people I talk to about investments say I wish I had money…
Most people have money but they don't know they have money, money held by other people but they still have money.
First option for those who own property, to take out a loan for any purpose at the expense of the existing property, and so-called in the vernacular - mortgage cycle.
As long as a mortgage on the current asset is less than 50% of the property value, a loan can be taken for any purpose up to the sum of 50% of the property value, some insurance companies today give mortgages on 70% of the existing property value.
Another option, for those of us who have education and provident funds, you can take out a loan at the very expense of very low interest rates and funds, on the one hand it's our money that the insurance companies and funds make money on, it's time you make money, it's very cheap money.
Short term loans, mainly for making flips can be obtained from Hard Money in the area you work in, usually this is about 9-10 annual interest rate.
The most interesting game is for those who have several properties in the US:
For those with over 8 assets, you can apply to US banks for a mortgage, some banks refer to the Asset Portfolio as Multifamily and you can take a mortgage on existing assets and purchase additional assets with the same money, and then refinance and purchase more assets.
The leading option for all options is OPM - Other People Money - to use investors' money to execute the transactions, there are a large number of models for calculation and conduct with investors.
I hereby declare that I am not a tax advisor or accountant, and all that is said in the post must be verified with your accountant and tax advisor, everything stated in the post is from personal experience.
It is very difficult to find a bank that will agree to give a single loan on a number of assets, called it blanket loan
Amit Pinto
I will add: In a mortgage in Israel, loans from provident / pension funds, etc., interest expenses are not recognized for tax purposes, this must be taken into account.
In addition, the more leveraged the risk, the more probably the FULL RECOURSE loans.
For those who are interested in funding for Flip - Multi - Portfolio…
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