Tag Archive for: gap funding

Fix and Flip Escalator: Bigger and Better

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When you use the Fix and Flip Escalator, you’ll quickly realize it’s not magic. It’s SIMPLE math.

This week, let’s use the escalator to see what your money does when you complete four deals per year.

 

Hard Money > Soft Money

Profits increase by­ $12,000

$12,000 x 4 deals = $48,000

 

Hop up another step to bank financing, and this happens:

 

Hard Money  > Banking

Profits increase by $17,000

$17,000 x 4 deals = $68,000

 

Then look at how your profits skyrocket over the course of two years:

Hard Money > Soft Money

$48,000 x 2 years = $96,000

 

Hard Money > Banking

$68,000 x 2 years = $136,000

 

You know what these numbers mean, right? Yes, instead of losing $136,000, you’re making $136,000. That’s money you can reinvest or spend on…anything! Hey, it’s your money. You can do whatever you want with it.

Are you ready to hop on the escalator yet? If so, contact us!

Motivational Monday – Invest Today

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Motivational Monday – Risk

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Motivational Monday – Later

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Friday Fun – Lenders Be Like

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Tricks to Get Approved for a Loan

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So, you keep getting turned down for a loan.

As mentioned in a previous post, there’s likely a valid reason. The most logical explanation is a lender doesn’t have the kind of loan you’re looking for. They might only offer loans that include:

  • Lower LTV’s
  • Shorter terms
  • Smaller loan sizes
  • Borrower entity requirements
  • Loans for higher credit scores
  • Loans for those with more experience

Even so, it gets old. So, what are some tricks can you try to avoid hearing, “No,” instead of “Yes”? Here are just a couple:

  • Look for smaller banks in your area. They will charge a little more but don’t mind the churning because they have smaller buckets of money.

With that said, we recommend you always work with one or two small banks because they’ll tighten the money outflow as they fill their buckets up.

  • Look for lenders who like real estate investors. How? Just ask them upfront if they work with fix and flippers before you go through the four-week process of being turned down.

Are you ready to set yourself up for success, rather than failure? Give us a call at 303.539.3000 to get the ball rolling!

Introducing the Hard Money Mike Loan Optimizer

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With the Loan Optimizer, our goal is to help you make MORE money every time you complete a fix and flip or fix and hold. This software will help you discover the real cost of various finance options.

The key benefits you can expect from using the HMM Loan Optimizer include:

  1. Seeing how much money you’ll need to contribute to the project and how it will impact your profits and cashflow.
  2. Comparing all lenders (and their hidden fees) and EASILY calculating the TRUE cost of your loan.
  3. Evaluating your terms and deciding which is better: paying higher points or a higher rate.
  4. How the length of your project will impact the cost of each loan option.

Since the Loan Optimizer is a newer product, we’d love to hear your feedback on how we can make it as user-friendly as possible!

Our goal is to help real estate investors like you succeed, so feel free to share this vital tool with your network.

Ready to make more money on your next deal? Then request our HMM Loan Optimizer and start comparing your options today! For a limited time, we’re offering this tool for free, so email Info@HardMoneyMike.com for your copy or download it here.

 

Motivational Monday – Courage

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Fix and Flip Escalator – A Closer Look

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Let’s continue with the example we used last week and examine the Fix and Flip Escalator a little closer.

As reminder, we used the following scenario to evaluate figures:

You need a loan for $250,000. That covers purchase price and repairs. After 6 months of hard work, you fix the property and sell it for $335,000 (nice job!). Once you take into account all of your holding, closing, and realtor costs, you should walk away with $50,000.

So, now let’s see what happens when you jump from a higher step (i.e. hard money), to a lower step:

When you move from hard money to soft money, you:

  • Make $12,000 more in profits.
  • Drop your monthly payment by $1,100—that’s more money in your pocket!

When you move from hard money to banking, you:

  • Make $17,000 more in profits.
  • Drop your monthly payment by $1,500—again, more money in your pocket.

Are you following along? We hope so, because it’s pretty cool to see how much you can make when you consider the actual math.

Yeah, yeah. We know.

Math.

But it’s worth running some small numbers to see BIG results, right? If you’re ready to tackle the numbers for your project, give us a call.

Motivational Monday – Team Sport

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