Applying for an ITIN home loan is as simple as calling a loan officer. They are well trained in non-traditional loan products and can walk you through the process step by step.

As with a normal mortgage loan, an ITIN loan will require that the lender review your tax information, pay stubs, and bank account information in order to make you a series of competitive offers at the usual timescales of 10-30 years at both fixed and adjustable rates. It is important that you have two consecutive years of tax returns under the same ITIN number, ensuring that it has not changed due to job changes or previous filings under a corporate tax ID number, which doesn’t work for this loan program. 

The number one piece of advice for getting an ITIN loan is to be honest and transparent with your loan officer. If you try to hide anything that might complicate your loan -- a previous bankruptcy or owed child support -- the lender will still find out and you risk them revoking their offer or hiking the interest rate due to your lack of honesty. If you are honest, your loan officer can help you work around and explain away any potential issues. If you are dishonest, your loan is in jeopardy.

An ITIN loan is a typical loan like a normal buyer would receive, only for people who have an Individual Taxpayer Identification Number (ITIN) rather than a Social Security Number. These people are generally greencard holders or guest workers who have permits to work in the United States legally, while not being citizens or permanent residents.

This loan product works almost exactly the same as a traditional mortgage loan, allowing a whole class of people excluded from FHA loans to achieve home ownership. However, because they do not have access to traditional FHA loans, they will need to put down more than the 3.5% that the FHA offers to first-time home buyers -- generally 15% or more.

As well, the interest rate can be a bit higher for ITIN loans, generally by around 3%. With today’s low rates, however, that puts the interest rate of an ITIN loan at around 6%, which is still good for a non-traditional loan product.

Once you have a lot loan for property that you plan to build on, you can apply for a construction loan. For a half-a-million dollar lot and half-a-million dollars in construction costs, you can get a loan for up to 80% of that total value, or $800,000. If there is a pre-existing mortgage, that is paid off first, with the remaining sum going toward the construction.

In terms of time from receiving the lot-loan to receiving the construction loan, it can be much longer than people imagine. Some clients think that after receiving a lot loan they’ll be building in weeks. However, local permitting processes add a significant amount of time -- generally from 8 months to 2 years, depending on how much housing developing is going on in that area and how streamlined the local processes. However, in the absolute worst-case it can be six years! To get a better estimate, talk to developers who are already working in the city and ask them for their honest opinion on the local timeline.

However, if you want to avoid these huge timelines, you can do what is called a ‘purchase construction’ that involves purchasing a lot that already has plans developed, permits pulled, and contractors ready to go, to reduce this timescale down to around 4 months. However, this requires that the seller has the floorplan already designed and approved, rather than allowing the buyer to design it from the ground up. However, minor changes are still able to be made by the buyer.

Though new-build construction can be a lengthy process, a good loan officer can help you expedite the process and find a good loan that fits your needs. 

If someone is buying a house, but they want to add a second story, a renovation loan is a great financial product that can help them realize their vision of the property. It is nominally the same as a construction loan, but focused specifically on remodels rather than new-build construction

For example, if you buy a turnkey house that is a little beat up for $1 million, but need to redo the kitchen and add a second story, the loan is calculated based on the expected value of the home after the completion, with the total loan amount going to 70-80% of that value add. 

There is perhaps nothing more important than having a mentor who can help you find the right mindset to succeed in the real estate business. If you can find a partner who can teach you the ins and outs of this business and be your cheerleader along the way, they will give you the expertise and the drive and focus to be the best you can be.

While it may seem difficult to find a mentor, it really isn’t. Just keeping your eye out for opportunities to link up and work with people who are driven and knowledgeable, and sticking to the people you run across like that like glue, will eventually turn one of them into someone you will call a mentor. Part of this mentality is just surrounding yourself by people who are as driven as you -- even if they are older or younger or not the kind of people you think of yourself as being similar to. Putting yourself in a situation of being surrounded by successful people is a huge part of the path to success.

While there is lots of quantitative advice out there for how to finance your first investment property, there is another side of this investment that is rarely talked about: you can get the money you need through sheer willpower and sacrifice.

Establish credit. Purchase a vehicle. Work 70 hour weeks. Demand the pay that is worth your time -- and work hard enough to make that value worth it for your employer. Live within your means and save up enough money and soon enough you will be able to afford your first property: a 3.5% downpayment isn’t that much.

From there on out it gets easier, but for that first property the sacrifice is worth it. When we are young we often want to spend our time having fun, but that fun is all that much better after you have already reached success.

The best advice for finding real estate opportunities is to keep your eyes open. Rather than planning to go home after work and spend an hour watching TV, spend 15 minutes each night looking for new real estate investment opportunities. That can mean going on MLS or calling real estate agents, but also simply driving around. Just looking around a neighborhood can find you excellent direct-to-owner deals that are highly profitable.

Some people psych themselves out and think you have to wait around for a good deal, but the best philosophy is to always be on the lookout for a good opportunity. If you try to beat the market, it will always win. If you try to find good investments, you will come out on top.

We all have the opportunity to decide what our threshold for life is, and the most successful of us wake up and go out and grab it by the horns. The more you put in, the more you get back.

In Episode #51 I spoke with Carlos Delherra about his real estate portfolio before and after the 2008 housing crisis. How he changed his perspective on real estate was instructive for me and should be educative for anyone getting into real estate investing.

Before 2008, Delherra was over-leveraged in about 25 million dollars of real estate across three states. His strategy was equity appreciation, which would make him money as homes increased in value. At the time, values were going up and up and up and it seemed like he was set for life. Once the market crashed, however, that paper equity of $25 million crashed to a $500,000 debt.

After 2008, he shifted his strategy toward cash-flow generation in the student housing real estate niche. Because students are an inelastic market, with a near constant demand as college attendance rates continue to increase, and because students are often willing to pay a premium for good housing, shifting to this niche allowed him to consider his business in terms of the cash it was bringing in month after month, rather than the paper value it might have at some point in the future.

This kind of stable investing allowed Delharra to rebuild himself and his business to a better position than he had before the crash.

There are good opportunities for real estate properties to flip everywhere in every market. The easiest deals are cosmetic flips, where some new paint and a few fixtures can add enough value to a property to make some serious money with little investment. However, these deals can be hard to find.

A good way to find good properties to flip is to specialize in a particular aspect of home repair and then seek out properties that require that repair. For example, in markets with seismic activity, it can be great to learn how to fix a foundation and then focus on buying homes with foundation issues, fixing them, and flipping them.

In general, however, if you are buying direct on MLS, most good deals are going to require a lot of fixing up in order to be worth your while. If buying direct to homeowner, however, you can get away with buying properties in much better condition that will still be profitable. Overall, it isn’t about one thing, but rather finding a good deal.

The common saying in our industry is, “Attract, Convert, Deliver, & Scale,” but too often real estate agents get stuck in a vicious cycle of “Attract, Convert, Deliver” and never find the time to scale. This is because they are trying to do everything themselves.

Think about it, if you spend your time attracting new customers and then spend your time trying to convert them and finally spend your time delivering them a quality service, when the cycle is done you need to quickly start attracting new customers in order to keep the money coming in. The purpose of delegation in a real estate business is to free up your time so that while you are working with one client, your support staff is chasing down new leads that you can tackle when you are done delivering a service.

Indeed, at scale, a real estate business owner may only be superficially involved in any particular step of a client’s journey through the pipeline. Their role is to ensure quality, smooth over any mishaps, and offer expertise when it is needed. But getting to this point requires actually being able to spend time on the systems that make a business run smoothly at scale. Plan on spending 20% of your time working on the business itself.