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Performance Property Real Estate Question

How Equity Participation Loans Increase Private Investor Profits

Q: Our friend fixes and flips houses and he offered us the opportunity to invest in his next project. What’s the best way to get compensated? Curtis, Scotch Plains, NJ A: As a private money investor in a real estate fix and flip, you can be compensated with interest for the time period your money is being used, you can be compensated with equity which will give you a % of the final profit, assuming there is a profit or you can be compensated by a combination of both interest and equity. You can formalize your stake in the profit derived from the transaction in an equity participation loan agreement which spells out how and when you will be compensated […]

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Performance Property Real Estate Question

203K Mortgage Loan Risk To Home Buyers

Q: I’m trying to buy my first home. I am really excited because I actually found a home that’s within my price range. The house is a fixer upper that needs work but my mortgage broker said I can still get a mortgage for it and I can actually borrow the money as part of my mortgage to make the repairs. Do you think that’s a good idea? Susan, Bloomfield, NJ A: Your mortgage broker is likely referencing a type of construction loan for residential home buyers called a 203K. Section 203(k) insurance allows homebuyers to finance both the purchase of a house as well as the cost of its renovation through one single mortgage. Conceptually, a 203K loan is […]

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Real Estate Insight

US Homeowners Gained Over $1 Trillion in Equity in Q3 2020

US Homeowners Gained Over $1 Trillion in Equity in Q3 2020.

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