Tag Archive for: Fix and flip

Why Renovation Speed is the Key to Your Success

/in ,

Today we are going to discuss why renovation speed is the key to your success. Renovating a property can make or break your success as an investor. The key? Speed. The longer a project takes, the more it costs. However, when you move quickly and efficiently, you keep more money in your pocket and get to the next deal faster. Let’s break down why speed matters and how it can boost your profits.

Time is Money

Every extra day of renovation costs you. Loan interest, utility bills, as well as property taxes keep adding up. The longer your project drags on, the smaller your profits become.

Fast Renovations Mean Faster Profits

Let’s compare two investors:

  • Investor A flips a house in three months and moves on to the next deal.
  • Investor B takes six months, paying twice the holding costs.

Who do you think makes more money? The faster you finish, the faster you profit.

Rentals Need Speed Too

If a rental sits empty, it’s losing money. A one-month delay means missing an entire month of rent. Fast renovations get tenants in sooner, putting cash in your pocket.

Speed Without Sacrificing Quality

Fast doesn’t mean sloppy. It means having a solid plan, hiring the right team, and keeping things on schedule. Delays kill deals, but efficiency builds wealth.

Conclusion

If you want to maximize your real estate success, focus on speed. Whether flipping or renting, a fast, well-planned renovation means lower costs, quicker profits, and more deals in the future. Don’t let delays eat into your success—keep things moving and watch your investments grow!

Contact Us Today! 

Do you have more questions about what makes an investment property a good investment? Contact us today to find out more! 

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! 

Fix & Flip Like a Pro: Hard Money Strategies for Maximum Profits

/in ,

Today we are going to discuss how to fix & flip like a pro: hard money strategies for maximum profits. Flipping homes is one of the fastest ways to build wealth in real estate. But without the right funding, your project can stall before it even begins. That’s where hard money loans come in. They offer fast, flexible financing that can cover up to 100% of your deal (in the right conditions).

In this guide, we’ll break down the key numbers, loan terms, as well as roadblocks that can make or break your success. Plus, you’ll get access to a free Excel spreadsheet to help you run your numbers before making a move.

Step 1: Know Your Key Numbers

Lenders evaluate fix and flip deals using three key numbers:

1. Purchase Price

  • This is what you’re paying for the property.
  • Example: $200,000

2. Rehab Budget (Scope of Work)

  • This includes repairs, upgrades, and improvements.
  • Example: $50,000

3. After Repair Value (ARV)

  • This is the projected value after renovations.
  • Example: $350,000

💡 Pro Tip: Your lender will use the ARV to determine how much they can lend. Most lenders offer loans up to 75% of the ARV.

Step 2: Understanding Your Loan Amount

Lenders will calculate your loan based on the ARV, purchase price, and rehab costs.

  1. Maximum Loan Amount (75% of ARV)

    • $350,000 × 75% = $262,500
    • This is the highest loan amount a lender might offer.

  2. How Much You Actually Get

    • Lenders will not give more than the total of your purchase price + rehab.
    • In this example:
      • Purchase + Rehab = $250,000
      • Since $250,000 is less than the $262,500 max loan, you could qualify for full coverage.

✅ Result: If your numbers align, you may be able to secure 100% financing. If not, you’ll need additional funds.

Step 3: What Costs Do You Need to Cover?

Even with hard money financing, you’ll have out-of-pocket costs. Here’s what you should prepare for:

1. Down Payment

  • Lenders typically fund 80–90% of the purchase price.
  • You may need to bring 10–20% of the purchase price in cash.
  • Example: $200,000 purchase price × 20% down = $40,000 out-of-pocket.

2. Rehab Cost Contribution

  • Many lenders fund 80–100% of rehab costs, but you must pay upfront and get reimbursed.
  • Example: $50,000 rehab × 90% lender coverage = $5,000 out-of-pocket.

3. Closing Costs & Loan Fees

  • Loan origination, title fees, and processing costs typically range from 2-4% of the loan.
  • Example: $205,000 loan × 3% closing costs = $6,150.

4. Carry Costs (Holding Expenses)

  • Monthly interest-only payments on the loan.
  • Taxes, insurance, utilities while holding the property.
  • Example: $205,000 loan at 10% interest = $1,700/month.

💡 Pro Tip: Many first-time investors underestimate how much cash they need upfront. Make sure to plan for these costs before diving into a deal.

Step 4: The Biggest Roadblocks & How to Overcome Them

Even great deals can fail if you don’t have the right funding strategy. Here’s what commonly trips up new investors:

❌ Not Having Enough Upfront Capital

✅ Solution: Build your Money Bucket with personal savings, business credit lines, or HELOCs.

❌ Not Understanding Escrow Releases

✅ Solution: Hard money lenders hold rehab funds in escrow and release them in stages. Make sure you can cover materials and labor upfront before reimbursement.

❌ Underestimating Holding Costs

✅ Solution: Budget for at least 4–6 months of carrying costs (interest, taxes, insurance).

💡 Avoid These Issues by Running Your Numbers First!

Step 5: Get Your Deal Funded the Right Way

Hard money loans are powerful tools when used correctly. The key is knowing your numbers, planning ahead, and ensuring you have enough funding to complete the project.

✅ Grab Your FREE Fix & Flip Calculator that is featured in this video that discusses fix & flip like a pro: hard money strategies for maximum profits. 

This tool will help you:
First, Calculate your loan amount
Second, See your cash needed upfront
Finally, Estimate your monthly payments

Got questions about fix and flip loans? Contact us today! Let’s make sure your next flip is your most profitable one yet! 🚀

Need More Funding?

Visit HardMoneyMike.com for more expert advice on real estate loans, BRRRR strategies, as well as funding solutions.

How to Sell Your Fix and Flips Faster in 2025

/in ,

Today we are going to review how to sell your fix and flips faster in 2025. Selling a fix-and-flip property quickly can mean the difference between a good profit and unnecessary losses. With rising interest rates, it’s more important than ever to make your property attractive and affordable to buyers. Here are practical steps to sell your fix-and-flips faster while maximizing your profits.

Why Affordability Matters More Than Ever

In 2025, most buyers focus on payments, not just price. Whether it’s a car, a boat, or a house, people think in terms of what fits their budget—and what they can qualify for. For a property to sell quickly, you need to control the buyer’s monthly payment. That means focusing on two key numbers:

  1. The purchase price
  2. The interest rate

Instead of dropping your price, consider strategies to lower the interest rate for your buyers. This expands the pool of people who can afford your property, creating more competition and selling your property faster.

Example: $400,000 Property in a High-Interest Market

Let’s say you’re selling a property for $400,000. Current market interest rates are 6.875%, and your target is to keep the monthly principal and interest payment under $2,000. Here’s how the numbers play out:

  • At 6.875%, the payment for an 80% loan (with 20% down) would be $2,100.
  • To attract more buyers, you need to lower the payment below $2,000. This could double or triple the number of potential buyers who qualify.

You have two main options to achieve this:

Option 1: Drop the Purchase Price

A common strategy is to reduce the property price. Here’s what that looks like:

  • A 5% price drop from $400,000 brings the price down to $380,000.
  • At 6.875%, the payment drops to $1,997.

This method works, but it costs you $20,000. If your profit margin was 10%, you just lost 50% of your profits. For a 15% margin, you lose a third of your profits. That’s a significant hit just to open up the buyer pool.

Option 2: Buy Down the Interest Rate

Instead of reducing the price, focus on lowering the buyer’s interest rate. Here’s how:

  • Keep the purchase price at $400,000.
  • Offer to buy down the buyer’s interest rate by 1.5 points.
  • The cost of the rate buy-down is based on the loan amount, not the purchase price. For an 80% loan of $320,000, 1.5 points would cost $4,800.

This strategy lowers the payment to $1,996, the same as the price drop, but it costs only $4,800 instead of $20,000. By focusing on payments rather than price, you keep more money in your pocket while still attracting more buyers.

How to Market This Strategy

When advertising your property, emphasize lower monthly payments, not the buy-down itself. Many buyers and even Realtors don’t fully understand rate buy-downs, but everyone understands affordability. Use phrases like:

  • “Affordable monthly payments”
  • “Lower payment options available”
  • “Permanent payment savings”

Highlighting the payment advantage makes your property stand out in a competitive market.

Key Takeaways for 2025 Fix-and-Flips

  1. Buyers focus on payments, not just price.
  2. Lowering the interest rate is often more cost-effective than dropping the price.
  3. Market your property by emphasizing affordability and payment savings.

At Hard Money Mike, we’re here to help you succeed with your fix-and-flips. Whether you need financing for your next project or strategies to sell faster, we’ve got you covered. Reach out to us for the best tools, rates, and terms to make your projects a success.

Watch our most recent video to find out more about: How to Sell Your Fix and Flips Faster in 2025

What is Transactional Funding?

/in ,

Today we are going to answer the question, “what is transactional funding?” Transactional funding is a short-term loan that helps real estate investors complete quick, back-to-back property deals. Think of it as a bridge that gets you from point A (buying) to point B (selling) without using your own cash.

Let’s look at an example

Here’s how it works: You find a property to buy (let’s call it Deal 1). At the same time, you have another buyer lined up to purchase that same property from you (Deal 2). Transactional funding steps in to cover the purchase of Deal 1 until Deal 2 closes. After Deal 2 wraps up, the funding gets paid back.
This type of funding is ideal for wholesalers or investors working on assignments where timing is everything. For example, imagine you’ve negotiated a great deal on a fixer-upper and have already lined up a flipper to buy it. Transactional funding ensures you don’t miss out on the opportunity just because you don’t have cash on hand.

What’s the best part? 

These loans don’t typically require credit checks or income verification since they’re secured by the property and paid off quickly. Just be sure all pieces of the deal are in place before moving forward.
In short, transactional funding is the ultimate tool for quick real estate flips. It keeps your deals moving and helps you maximize opportunities without tying up your own money.

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! 

Private Money vs. Hard Money: What’s the Difference for Real Estate Investors?

/in

Today we are going to discuss hard money vs private money. As a real estate investor, you’ll hear the terms private money and hard money tossed around a lot. Both can help you fund deals, but they come with key differences. Knowing these can save you time, money, and stress.

Let’s break it down.

Hard money loans come from professional lenders. These lenders specialize in quick, short-term loans for real estate deals like flips or rentals. Hard money often means higher interest rates and fees, but you get speed and reliability in return. For example, if you find a fix-and-flip deal that needs to close in 10 days, hard money might be your go-to.

Private money, on the other hand, usually comes from individuals—friends, family, or other investors. These loans often have flexible terms since the lender isn’t a professional. Imagine asking a retired family member to fund your next rental in exchange for interest payments. With private money, relationships matter more than a credit score.

So, which is better, hard money vs private money? It depends on the deal. If you need speed and structure, hard money may be the answer. If flexibility and trust are key, private money might work best.

Contact Us Today! 

Which is best for you, hard money vs private money? Contact us today to find out more!

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! 

Small Town Investing: How to Energize Your Real Estate Deals

/in

Small Town Investing: How to Energize Your Real Estate Deals

Why Invest in Small Towns?

Today we are going to take a closer look at how you can energize your real estate deals when doing small town investing. Small towns often get overlooked by big banks and private lenders. However, investing in these communities can be a goldmine. Most importantly, you’ll help the community grow as well. Here at Hard Money Mike we have the flexibility to help you accomplish your real estate investing goals! Let’s take a closer look! 

Financing Options for Small Town Investors

1. 100% Financing

If you find a great deal, you might not need any money upfront. We can finance up to 100% of the purchase as well as the rehab costs.

2. Fix and Flip Loans

These loans cover both the purchase and renovation costs. Therefore these loans are perfect for properties that need a little love.

3. DSCR Loans

Don’t have a high income or perfect credit? No problem. DSCR loans instead focus on the property’s income, not yours. We offer these loans for properties for as low as $50,000.

4. Finish-a-Project Loans

Stuck with an unfinished project? We provide loans to help you complete it.

Example: A Success Story from Oklahoma

Imagine buying a house for $40,000, putting $30,000 into renovations, and then having a property worth $120,000. This isn’t just a dream. We helped an investor do just that in a small town in Oklahoma. She bought several properties, renovated them, and either rented them out or sold them. In just 18 months, she turned her initial investments into a thriving portfolio.

Steps to Start Investing in Small Towns

First, Find the Right Property

Look for undervalued properties. These can be homes that need a little TLC or rentals ready to go.

Second, Get Financing

Don’t worry if big banks turn you down. Look for lenders who specialize in small town investments. They offer flexible options and don’t always require perfect credit.

Third, Renovate and Improve

Fix up properties to make them attractive. A well-renovated home can bring new residents to the town.

Finally, Rent or Sell

Decide whether to keep the property as a rental or sell it for a profit. Both options can be lucrative in small towns.

Making Money While Helping Your Community

Fixing up homes does more than fill your pockets. It revitalizes the community. Updated homes attract new residents, which boosts the local economy. Plus, it brings life back to once-vacant houses.

Why Choose Us?

We understand small towns because we come from them. We offer:

  • Flexible Loans: Not based on your credit score or income.
  • Quick Approvals: Get your project moving fast.
  • Personal Touch: We’re here to help you succeed.

Ready to Invest?

If you’re ready to start investing in small towns, reach out to us at The Cash Flow Company. We have tools like the Deal Analyzer to help you find and finance the best deals.

Watch our most recent video to find out more about:Small Town Investing: How to Energize Your Real Estate Deals

How to Get 100% Fix and Flip Financing

/in

The key to real estate investing is leveraging other people’s money to cover your fix and flip financing.

Getting your fix and flips covered 100% comes down to 3 things:

  • Finding the right money 
  • Striking at the right time 
  • Understanding hard money

Especially for new investors, hard money (also called private money) loans are usually the key. Hard money is flexible and often has less rigid requirements than more traditional loans. This makes them perfect for fix and flips.

3 Ways to Get 100% Financing for Fix and Flips

Especially in today’s real estate climate, using hard money is a crucial link in the chain of building wealth. 

Rates are high and a lot of banks are offering fewer loans. So where are you going to find the money?

There are three strategies that help you leverage hard money to build wealth by covering 100% of fix and flip financing.

1. Find Great Deals

This may seem obvious, but it’s more important to be strategic than ever before. 

Look for properties that have a minimum 70% ARV (After Repair Value). Take your time to make sure you’re finding properties that are going to have a solid return. Don’t take risks on properties that aren’t likely to flip.

Remember: it’s better to have 2-3 solid deals than 6-8 bad or marginal deals.

So look for those 70% ARV properties.

2. Cross Collateralize

Sometimes called “crossing,” this strategy lets you use one property to get another at 100%. 

If you have another rental, a home, or a fix and flip that’s hit the market, you can use that property as leverage to get the next property. 

You will need to have a mortgage on both properties. Doing this basically gives the lender more protection. If you’re confident that you’ve picked good properties with high ARVs, then cross collateralizing is a fairly low-risk move on your part.

As long as you get that flip done and paid off, then both liens are released once you sell the new flip. 

3. Find a Cosigner

Again, this strategy helps lenders feel more secure on their end. If you’re a new investor, it can be helpful to find a guarantor with the assets who’s willing to cosign on a loan. 

As with crossing, as long as you’ve selected strong properties, this is a low-risk strategy that simply allows you to get 100% financing that you can pay off when you resell the property. 

Your guarantor should never need to pay a cent, but it makes it easier for the lender to approve financing. 

Fix And Flip Financing Made Easy

The market is gearing up to be great for real estate investors. Don’t be afraid to start your investment journey. Just remember:

  • Find great deals
  • Cross collateralize 
  • Find a cosigner

Hard money loans are a great place to start. They’re flexible, and you’re more likely to find 100% financing through a hard money lender, especially as a new investor.

If you do end up needing DSCR or other traditional loans, you can check out our sister company, The Cash Flow Company. 

If you’re interested in discussing a deal, reach out to us at Info@HardMoneyMike.com. We’re always happy to run through deals and answer questions.

Top 5 Hard Money Loan Options

/in

What types of hard money loan options are out there for real estate investors?

Hard money (sometimes called private money) loans are often the key to getting started in real estate investing. 

Most hard money lenders have a lot of options and many even have particular specialties. This article explains what’s out there so you’re equipped to have discussions with lenders.

Here are the top five loans that you’ll encounter in the hard money industry.

1. Fix and Flip Loan

The nice thing about a fix and flip loan is that it has everything to do with the property. Even if you’re less experienced as an investor, if the property has potential, hard money lenders will listen.

If the value is there, hard money lenders could fund up to 100%.

2. Bridge Loans

You’ll typically use a bridge loan to either purchase or refinance a project. There are a few places where they generally show up:

Bridging Gaps Between Projects

If you’re currently working on a project but you come across another great deal, a bridge loan can tap into that equity. You can use this money this as an opportunity to efficiently line up your next project.

A bridge loan would put a small lien on a property that’s about to go up for sale (or is currently being sold) which gives you money to purchase your next project.

Finishing and Buying Properties

Hard money moves more quickly than large, standard bank loans. If the clock is ticking and you need to either pay or lose the deal, a hard money bridge loan can save the day.

Wholetailing

Bridge loans can also work as a crucial part of wholetailing. Wholetailing involves anything from purchasing a discounted property and performing basic fixes to outsourcing renovations altogether. 

Typically, wholetailing only requires simple funding, often 60-90-day loans.

3. Gap Loans

You can explore gap funding to cover all sorts of money holes that might show up as you go through a project:

  • Down payments
  • Getting a project started (consider funding for escrow draws)
  • Completing a project
  • Carrying project expenses (like HOA fees)

You can even use gap loans to pay off old investors if you have someone who’s ready to move on. Treat your investors well and make sure you have the financial flexibility to let them out if they need.

4. Usage Loan

A usage loan is a private non-reporting loan that helps you pay off your credit card balances. If you’re using your personal credit card for business, this can be an important way to raise your credit score.

Real estate investing is all about leverage, and a lot of banks see your credit score as a reflection of your ability to use leverage well. 

The higher your credit score, the better terms you’ll often find for loans. 

5. BRRRR “Buy” Loan

The two big ticket items in the BRRRR method are 1) the purchase, and 2) the refinance.

Hard money loans come into play on the purchase side of a BRRRR. Because hard money is so flexible, it can also often fund a good portion of the rehab. 

Questions?

These are the top five hard money loan options, but if you’re looking for something else, just ask! Remember, hard money lenders are often smaller companies and individuals. They all have preferences and specialties, so get to know them and let them get to know your project.

If you’re interested in learning more, check out the free tools on our website or our YouTube channel where we discuss other tips and tricks for successful investing.

You’re always welcome to reach out to us at Info@HardMoneyMike.com if you have any questions or would like to discuss a deal.

Happy investing!

Why You Shouldn’t Use a DSCR Loan for a Fix and Flip

/in

A DSCR loan is great for rentals, but why don’t they work for flips?

DSCR loans definitely have their place in the real estate investor’s arsenal. But if you’re trying to do a fix and flip, this loan might not be the right fit for you.

How Does a DSCR Loan Work?

DSCR stands for Debt-Service Coverage Ratio and is a loan particularly suited for rental properties. Like any other traditional loan, a DSCR is able to fund up to 80% of the purchase price or appraisal, whichever is lower.

For example, if you have a $200,000 property, the DSCR will cover up to $160,000 (80% of the total purchase price). This leaves $40,000 left for you to cover on your own.

As mentioned above, this loan is very well-suited for properties that generate steady cash flow (like a rental), but they can be more difficult to work with in the fix and flip game.

Why You Shouldn’t Use DSCR for Flips

You Need to be Rent Ready to Get a DSCR

In order to qualify for a DSCR appraisal, a property must be rent ready. This creates a lot of hurdles in the fix and flip world since many flippers are doing more than basic cosmetic repairs. 

DSCRs Have Prepayment Penalties

Most DSCR loans come with prepay penalties. These penalties typically come in 3- or 5-year plans. Again, in a rental market where you’ll be holding onto the property for longer amounts of time, you typically don’t need to worry about the prepay. 

However, the fix and flip market moves quickly. DSCRs penalize investors who pay off these loans quickly, something fix and flip investors often work towards.

You’ll Pay More For Rehab

In addition to the remainder of the purchase price, DSCRs don’t cover renovation costs. This means that even more money will need to come out of your pocket. 

Make Sure Your Loan Fits the Project

DSCRs are a great product for rental properties. However, if you’re looking at doing a fix and flip, take a look at other types of loans.

The most flexible loans are going to be hard money (also called private money) loans. 

We have a ton of free tools on our website that can help you find the right loan to fit your project. We’re also happy to chat with you about any particular deals or questions you have. 

Just reach out to us at Info@HardMoneyMike.com.

What Is ARV? (And How Does It Impact Real Estate Deals?)

/in

How does value-add property investing work? And what is ARV?

After-repair value (or ARV) is one of the biggest concepts used in real estate investing.

Let’s talk about what ARV is and how to calculate it.

Value-Add Real Estate Investing

The type of real estate investing we specialize in involves value-add properties.

This means you buy properties at a lower price, change them in some way, then sell for more. This could look like:

  • Splitting up a rental into multiple units
  • Adding a bedroom
  • Doing needed repairs and renovations
  • Etc.

The property’s value at the end of your project will be more than the price you originally bought it for.

That higher ending value is referred to as the after-repair value. This value is decided by either: 1) what it can sell for on the open market, or 2) what it will appraise for (if you’re going to hold the unit as a rental).

How to Estimate ARV

All of the financials of a value-add real estate investment are dependent on the ARV. How do we decide the ARV number? Well, it’s really just an educated guess. Let’s go over some of the key factors used in estimating an after-repair value.

The Amount of Work and Quality of Work

The work you put into a property is what adds the value. So, how you’re changing the property is a good indicator of the ARV.

For example, adding a bedroom or granite countertops will impact the future value more than just a fresh coat of paint.

However, the planned work can’t be the only thing ARV is based on. After all, you can’t guarantee the quality of work will really turn out to be worth it. So there’s another important factor in estimating ARV.

Comparing to Similar Properties

To make our estimate slightly more accurate, we’re going to look at properties that are just like yours but finished. Here are the criteria you’ll use to calculate ARV with comps:

  • The same subdivision. Comp properties, at most, should be within a half mile of your property.
  • The same size. What’s the square footage? Don’t compare a 1,200-square foot place to a 2,000-square foot place.
  • The same condition. What will your property look like when it’s finished? Look at other properties that already look like that.
  • Sold within the last 3-6 months. It’s not accurate to use the list price for a property that hasn’t sold yet. You can only guarantee the actual value of a property when it’s been purchased in your market.
  • Sold without concessions. Concessions mean the seller is helping the buyer purchase the property. Some sellers will contribute anywhere between 3% and 6% of the sale price to help the buyer cover closing costs (especially in a FHA or VA market). This is important to watch out for in comps, because if a house sold for $200k with a 5% seller concession, then the seller was really only able to sell if for $190k.

Market Conditions

We usually have a ballpark idea of what the market will look like in the next 6 or so months. This is important to factor into your ARV.

For example, 2022 saw a market decline after May. So, if you were comping out a property in June of 2022, you’re expecting the market to get worse, so you factor that in. Maybe you take another 5-10% off the ARV you calculated based on comps to set a realistic expectation for the future market.

Why Is ARV So Important?

When you’re calculating the ARV of the property, remember to be truthful with yourself. Work with comps to get a full picture of your actual after-repair value. Fudging these numbers only hurts you.

ARV has a direct impact on the amount you can get from a lender. Accurate after-repair value is important to your investing financials. You can read about how ARV affects LTV here.

You can also use this free tool to calculate your lendable amount on a property based on ARV.

As always, reach out to Info@HardMoneyMike.com with any questions.

Happy Investing.