The Great Mortgage Puzzle of 2008 - Part III of III

There are several investment houses that can help a user set up a Roth self-Directed IRA or 401K from current account holdings or even from scratch. The IRS requires that such accounts be held by a third party administrator/trustee and the following are just a few of the companies in the marketplace that provide this service to the public:

Equity Trust Pensco Guidant Sterling

self directed iras and 401ks, state of the mortgage industry, mortgage underwriting process, private money lenders, hard money lenders The great thing about a self-directed IRA/401K is that although you are limited as to how much you can put in on the front every year, you can make all the profit that you can and pay no tax on the gain! If you are 49 & below, you can only contribute $5,000 annually to the IRA (Age 50 & up can contribute $6,000). And if you already have an IRA or 401K, you can roll those balances into a Roth vehicle and begin today to make larger returns with the following options and more:

Invest in real estate
Loans secured by real estate (mortgages, deeds of trust and the like)
Equity funding through private placement
Unsecured loans to businesses or individuals
Stocks/Bonds/etc.

self directed iras and 401ks, state of the mortgage industry, mortgage underwriting process, private money lenders, hard money lenders It should be evident now that an astute saver and investor can become a private money bank and enjoy much greater returns tax-free. Contact the vendors above or your CPA for more detail and contact a local real estate investment club as well for a supply of loan applicants needing cash to finance their individual real estate ventures.

Hard Money Lenders

Most loan officers in mortgage brokerage firms are connected to investors that have money ready to lend. These investors are individuals and loan monies on short term basis for real estate ventures and business purposes or to persons who may have experienced personal tragedies and may need funding quick that is unsecured. Many of these lenders are using IRA/401K balances in a self-directed manner to provide these loans although there are large firms that provide this service as well. The HBH Group has connection to many on a national and local level that we can put you in contact with.

Generally speaking, a person would not make a long term mortgage with a hard money lender. The rates are too high and most of the loans are balloon notes that get money back to the lender more quickly than a 30 fixed rate mortgage would. The typical terms are:

Interest rates average about 15%
Lending periods are usually 6 months or less
Loans are frequently "interest only" in nature with a balloon at the end of the period
Amortization periods vary from 10-15 years usually
Points are usually from 1-10 in addition to interest
There are usually origination fees from $500-1,000

self directed iras and 401ks, state of the mortgage industry, mortgage underwriting process, private money lenders, hard money lenders These loans are attractive to investors in a remodeling project where a property is being rehabbed and flipped for profit.

To sum up, given the current state of the mortgage market, closing on real estate has become more difficult than in the last 15-20 years. The lenders are more squeamish than ever and that trend runs from the primary to the secondary mortgage lenders. On the other side of that coin, with the volume of foreclosed properties on the market there are many deals to be had for personal use or for investment purposes. This could add up to a fantastic market for non-traditional lenders to clean up along with individuals and investors. These trends could fuel the start of a housing recovery and could be the silver lining to the dark cloud of real estate that has been so trumpeted by the mass media in the recent past!

This article is part III of a three part series discussing the mortgage markets in the USA and why the process has become so difficult in the past few months in light of the high foreclosure rates in the country. Tune in to the other two parts to come in the next two days. I will post links to them here as I get them posted here on AR. Thanks for reading!

The Great Mortgage Puzzle of 2008 - Part I of III
The Great Mortgage Puzzle of 2008 - Part II of III

Our real estate team is connected to:

Buyers and sellers of commercial and residential real estate.
Investors in both the above classes of real estate.
Property acquisution, leasing and management services for investors of commercial and residential real estate.
Business brokerage to help you find and acquire a local business.

We would love to assist you as you invest in Texas and the greater Austin area. Call us to find all we can offer you and to ask for a FREE information package!

This information is brought to you as a public service of the The HBH Group Realty Team with Keller Williams Realty. You can learn more about us at our websites located at: http://www.TheHBHGroup.com/ and http://www.TheHBHGroup.biz/ or contact our offices at (512) 439-3772 or toll-free at (877) 268-1877.

We teach a monthly real estate investment seminar in the Greater Austin area and YOU ARE INVITED to this FREE event. Simply call our offices to reserve you seats! Also ask about the investors club that we are forming in the North Austin markets currently - We would love to have you participate!

Steve Homer
The HBH Group (Keller Williams affiliate)

Steve Homer: Real Estate Agent in Round Rock, TX

Office: (512) 439-3772

Mobile: (512) 731-4948
Secondary: (512) 659-2514

Real estate broker specializing in real estate investing, both commercial and residential. I service the communities of Round Rock, Georgetown, Cedar Park & Pflugerville, Texas.

The Great Mortgage Puzzle of 2008 - Part III of III

Steve HomerThe HBH Group (Keller Williams affiliate)

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Steve Homer
The HBH Group (Keller Williams affiliate)