VRBO Investment Properties: A Smart Way to Grow Your Income

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Thinking about owning a vacation rental? VRBO investment properties are a great way to earn extra income while building long-term wealth. These properties allow you to rent out homes or condos to short-term guests, usually in popular vacation spots.

For example, imagine owning a cozy cabin in the mountains or a beachside condo. By renting it out on VRBO, you can earn nightly income while still enjoying the property yourself when it’s available.

One of the biggest perks? Short-term rentals often bring in higher income compared to traditional long-term leases. If your property is in a high-demand area, a few booked weekends could cover your mortgage payment for the month.

Of course, success with a VRBO property requires smart planning. Location is key. Travelers look for destinations that offer great attractions, beautiful scenery, or unique experiences. You’ll also need to think about property management, like cleaning and maintaining the home.

Done right, VRBO properties can be a game-changer for your financial future. They help you pay off debt faster and enjoy life more, giving you both cash flow and a fun asset you can call your own.

Ready to learn how to get started? Contact us today to find out more! We can walk you through the process from choosing the right property, to financing options, and even tips to maximize your profits. 

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Is a VRBO right for you? Contact us today to find out more about investment properties!

Free Tools For You! 

We also have free tools available! Download the Quick Deal Analyzer to see if your potential property will be a good investment.

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Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Raise your credit score today! 

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Never underestimate the power of your credit score as a real estate investor! Your credit score could easily make or break your next deal. Remember, the best part of real estate investing is that anyone from anywhere can begin building wealth if they know how to use leverage! However, the biggest piece of leverage is an investor’s credit score. Are you setting yourself up for success? Let’s take a closer look at how you can raise your credit score today!

  1. Identify the problem: Are you using a personal credit card to cover business expenses? If so, that will decrease your credit score dramatically.
  2. Usage Loan to the Rescue: A usage loan can be used to pay off credit card debt and in turn raises your credit score.
  3. Open Business Credit Cards: Once your credit score is back on track, get into the habit of using business credit cards to protect your personal credit score long term. 

It’s really as easy as 1, 2, 3! By getting back on the right track with your credit score you will have the flexibility you need to succeed! 

 

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Is your credit score where it should be? Contact us today to find out more about a usage loan and how you can boost your credit score quickly.

Free Tools For You! 

We also have free tools available! Download the Credit Score Checklist now to see what changes you need to make in order to get on the right path.

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Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

What Is Hard Money?

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Today we are going to answer the question, “What is hard money?” Hard money is a quick and flexible way for real estate investors to get funding. It’s different from traditional loans. Instead of banks, private lenders provide the cash. The loan is backed by the property itself, not your credit score or income.

Think of hard money as a bridge. It helps you close deals fast or fix up properties when traditional lenders might slow you down.

For example, let’s say you find a fixer-upper with huge potential. A regular bank says no because the property needs repairs. A hard money lender, on the other hand, sees the property’s future value. They offer you a loan based on that. This gives you the chance to buy the property, renovate it, and either sell it or refinance with better terms later.

The trade-off? Hard money loans often have higher interest rates and shorter terms. They’re not meant for long-term financing, but they’re a powerful tool when used wisely.

If speed and flexibility are key, hard money can open doors that traditional loans keep shut. It’s about making the deal work, even when the numbers seem tricky.

Ready to learn how to use hard money the right way? Stick around for more tips and insights!

Contact Us Today! 

What type of financing is right for you? Contact us today to find out more about real estate investment loans!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

What is ARV

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What is ARV? ARV stands for After Repair Value and is the amount that the property is worth after it is repaired. To put it another way, ARV is the value that the property could sell or appraise for. It is determined by three min factors.  

First, you need to determine what you will do to improve the property. This would include any upgrades or additions to the property, as well as the quality of the repairs.

Second, you must research the comps for your property. Comps are properties that are similar to yours, but are finished. It is imperative that comps are in the same area, approximately the same size, and have a relevant sales date that is within the last 3 to 6 months.

Finally, take into consideration any concessions. Concessions are when the seller helps the buyer purchase the property. Keep in mind that any contributions will impact your bottom line. 

Be honest and realistic!

It is imperative that you are honest and realistic with your numbers! The more truthful you are, the better it is. An honest ARV leads to more deals, more loan approvals, better terms , and more money!

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To find out more about how to calculate your ARV  Contact us today.

Free Tools For You! 

We also have free tools available! Download the Quick Deal Analyzer now to see what changes you need to make in order to get on the right path.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

How to Guarantee 100% Financing for BRRRR Properties

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Investing in BRRRR properties (Buy, Rehab, Rent, Refinance, Repeat) can be a great way to grow your real estate portfolio. However, one big question always pops up: How to guarantee 100% financing for BRRRR properties? With some careful planning and understanding of the numbers you can set yourself up for success. Let’s walk through the steps.

Step 1: Know Your Maximum Loan Amount

Before diving into the deal, you need to know how much your lender will finance. This comes down to two key numbers: your After Repair Value (ARV) and your lender’s Loan-to-Value (LTV) ratio.

What is ARV?

ARV is the expected value of your property after repairs. It’s what you can sell it for or the appraised value when you refinance.

Loan-to-Value (LTV)

LTV is the percentage of the ARV that your lender is willing to lend. Most lenders offer 70-75% of the ARV. So, if your property’s ARV is $200,000, and your lender offers 75% LTV, they’ll lend you $150,000.

Here’s a quick example:

  • ARV: $200,000
  • LTV: 75%
  • Maximum Loan Amount: $150,000

Step 2: Fit All Costs Under Your Loan Amount

To guarantee 100% financing, all your costs need to fit under the maximum loan amount. Your costs typically include:

  • Purchase Price
  • Rehab Costs
  • Closing Costs

For example, if your maximum loan is $150,000, your purchase price, rehab, and closing costs need to total $150,000 or less.

Example:

Let’s say you have the following costs:

  • Purchase Price: $100,000
  • Rehab: $40,000
  • Closing Costs: $5,000

Total costs = $145,000. Since this is under your $150,000 maximum loan, you can cover all your costs with the loan, meaning 100% financing!

Step 3: What Happens if Your Costs Are Over?

Sometimes, your costs may exceed the maximum loan amount. For instance:

  • Purchase Price: $120,000
  • Rehab: $40,000
  • Closing Costs: $5,000
  • Total Costs: $165,000

If your loan maxes out at $150,000, you’ll need to bring $15,000 of your own money to the table. This is why it’s crucial to carefully estimate your costs and compare them to your maximum loan.

Tips for Securing 100% Financing

  • Plan Your Rehab Costs Wisely: Keep your rehab within a budget that fits under the loan amount.
  • Negotiate Purchase Prices: The lower you negotiate the purchase price, the more room you have for other costs.
  • Include Closing Costs: Some lenders allow you to roll closing costs into the loan, which can help with 100% financing.

Conclusion

Getting 100% financing for BRRRR properties is possible when you know your numbers and plan carefully. Focus on maximizing your ARV and keeping your costs within your lender’s loan limit. Contact us today if you have questions about fitting everything under your loan, tools like loan calculators can help you run the numbers before you commit. 

Watch our most recent video to find out more about: How to Guarantee 100% Financing for BRRRR Properties

Airbnb Investment Property

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What exactly is an Airbnb investment property and is it the right choice for you? Today we will be taking a closer look!

What is an Airbnb?

An Airbnb is a vacation rental as opposed to a long-term rental property. Think about a small cabin in a popular hiking town or a beachside condo. People are able to book short stays, which can bring in more money than a traditional rental. 

How can an Airbnb help me?

Airbnb properties also give you flexibility. You can use the property yourself or rent it out when you want. Some investors start by renting their home part-time, testing the waters, and seeing how much they can make. A well-located and nicely furnished space can attract guests, especially if you offer extras like a guide to local spots or cozy decor.

Check out an Airbnb as an investment property! 

There are challenges, of course, like dealing with cleaning, guest management, and local regulations. But with the right setup, many investors find it worth it. And since you’re earning nightly, the income adds up quickly, giving you cash for future investments. In short, Airbnb properties can be a solid way to build wealth through real estate.

Contact Us Today! 

Is a Airbnb right for you? Contact us today to find out more about investment properties!

Free Tools For You! 

We also have free tools available! Download the Quick Deal Analyzer to see if your potential property will be a good investment.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Second Mortgage vs Hard Money

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When it comes to borrowing money for real estate investments, two common options are second mortgage vs hard money. Though they might sound similar, they have important differences.

Second Mortgage

A second mortgage is a loan you take out on a property that already has a first mortgage. Let’s say you own a house worth $200,000, and you still owe $100,000 on your first mortgage. If you take out a second mortgage for $30,000, your total debt would be $130,000. The second mortgage usually comes with a lower interest rate than a hard money loan, and it’s often offered by traditional lenders like banks or credit unions.

Hard Money Loan

On the other hand, a hard money loan is a short-term loan secured by real estate. Hard money lenders don’t care much about your credit score; instead, they focus on the property’s value. These loans are easier to get quickly, which makes them great for fix-and-flip investors or anyone needing fast access to cash. The downside? They come with higher interest rates and shorter terms than a second mortgage.

Example:

For example, if you’re flipping a house and need quick cash to buy the property, a hard money loan might be a good choice. But if you’re looking for a longer-term loan with lower payments, a second mortgage could work better.

Both have pros and cons, depending on your investment goals. 

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Which is best for you? Have you compared a second mortgage vs hard money loan best for you ? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer now to see what changes you need to make in order to get on the right path.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Credit Score Requirements

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Today we will discuss how credit score requirements impact your loan approval. Oftentimes investors wonder whether or not their credit score is killing the approval for a DSCR loan. The answer is yes! One of the biggest factors on credit scores is credit score usage. The credit score usage or utilization rate can greatly affect not only your score, but your ability to be approved for a loan. We recommend that customers use a simulator through MyFico, Experian, or Credit Karma in order to show you how your credit score can change after a debt is paid down. How can you pay down your debt or pay it off entirely? The answer is a usage loan. Keep in mind, you’re not alone! 7 out of 10 investors use their personal credit instead of their business credit. This drives the utilization rate up and investors stress levels up as well! 

Contact Us Today! 

Is your credit score where it should be? Contact us today to find out more about credit score requirements!

Free Tools For You! 

We also have free tools available! Download the Credit Score Checklist now to see what changes you need to make in order to get on the right path.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Financing is Key

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When it comes to real estate, finding the right financing is key. Most investors don’t just buy properties with cash. Instead, they use loans to maximize their money. Why? Because leveraging a loan allows them to buy properties they couldn’t afford outright, while still keeping cash on hand for other projects or emergencies. 

Let’s say you want to buy a small rental property. Instead of paying the full price, you use a loan to cover a big chunk of it. This means you can save your cash for things like repairs, upgrades, or even a future investment. The right loan gives you flexibility and a stronger foundation to grow your investments.

Different types of loans work best for different types of deals. Some loans are ideal for buying rental-ready properties, while others help fund fix-and-flip projects. That is why finding the right financing is the key to your success! By understanding which loan to use, and how to use it, you can set yourself up for better cash flow and bigger opportunities.

Contact Us Today! 

What type of financing is right for you? Contact us today to find out more about real estate investment loans!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Does Your Real Estate Loan Cover All of Your Costs?

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Does Your Real Estate Loan Cover All of Your Costs?

Hey everyone, it’s Mike with Hard Money Mike! When you’re planning to invest in real estate, one of the most important questions to ask is: does your real estate loan cover all of your costs? Today, we’ll dive into what goes into your loan, how to verify it, and how you can make sure you’re covered.

What Goes Into Your Loan Amount?

When you’re dealing with real estate loans, it’s easy to know your loan amount. But the real question is, what can fit under that loan amount? Let’s break down what could be included to ensure you’re not caught off guard by unexpected costs.

The Basics: ARV and LTV

Two key numbers determine the maximum loan available for your property:

  1. After Repair Value (ARV): This is the value of your property after all repairs and improvements. It’s the price you expect to sell it for or its value when you refinance.
  2. Loan-to-Value Ratio (LTV): This is the percentage of the ARV that a lender is willing to lend you. Most lenders offer between 70% to 75% of the ARV.

Example:

Let’s say you have a property with an ARV of $200,000. If your lender offers an LTV of 75%, they’ll lend you $150,000 (which is 75% of $200,000). Now, the question is, will that amount cover everything you need?

Breaking Down the Costs

To figure out if your loan will cover all your costs, you need to look at the expenses involved in your project. Typically, these costs include:

  • Purchase Price
  • Rehab Costs
  • Closing Costs

Let’s see how these add up in a real-world scenario.

Real-World Example: Are You Covered?

Imagine your total costs look like this:

  • Purchase Price: $100,000
  • Rehab Costs: $40,000
  • Closing Costs: $5,000
  • Total Costs: $145,000

With a maximum loan amount of $150,000 based on your ARV and LTV, you’re in good shape! Your total costs of $145,000 fit comfortably under the loan amount, so you won’t need to come up with extra money out of pocket.

But what happens if your costs increase?

What If Costs Go Up?

Let’s say your purchase price jumps to $120,000 while keeping the rehab costs at $40,000 and closing costs at $5,000. Your new total cost is $165,000. Since your loan maxes out at $150,000, you’d have to cover the extra $15,000 on your own.

Make Sure You’re Prepared

Understanding what fits under your loan amount can make a huge difference in your project’s success. If your costs exceed what your loan covers, you’ll need to have additional funds ready.

Tools to Help You

At Hard Money Mike, we offer free tools like the Loan Cost Optimizer to help you run these numbers. Use it to make sure your loan covers everything, so you’re not surprised by out-of-pocket expenses.

Have Questions?

We know this topic can be tricky, so if you have any questions, drop them in the comments below. We’re here to help you run through the numbers and make sure your next project is a success!

Stay Connected!

For more tips and tools to make your real estate investments easier and more profitable, check out our website at: HardMoneyMike.com. Don’t forget to like, comment, and share this article with other investors! 

Watch our most recent video to find out more!