Tag Archive for: #Hard Money Mike

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. 

Contact Us Today! 

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!

Hard Money vs Private Money: Do You Know the Differences?

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Today we are going to discuss hard money vs private money. As a real estate investor, you’ve probably heard terms like hard money and private money thrown around. While they may sound similar, these two types of loans have important differences that can impact your deals. Therefore, by knowing which one is right for you can save time, money, as well as stress.

What Is Hard Money?

Hard money loans are usually offered by local institutions or individuals. To clarify, these loans focus on the property’s value as opposed to your credit score or experience. Here’s how they work:

  • Asset-Based Lending: Hard money lenders care more about the deal rather than your financial history.
  • Flexibility: Hard money loans offer flexible terms, therefore making them ideal for unique deals like cross-collateralization or projects needing 100% financing.
  • Quick Approval: If you need fast funding in order to close a deal, hard money loans are your best bet. Approval can happen in days, not weeks.

Example

You find a great fix-and-flip project but need 100% financing: A hard money lender might offer that if the deal makes sense. They focus on whether the property has enough value, rather than your credit score.

What Is Private Money?

Private money loans usually come from larger lenders backed by Wall Street funds. These loans have stricter requirements, however they often offer lower rates for those who qualify. Here’s what you’ll find:

  • Stricter Criteria: Private money lenders look at your experience, credit score, as well as liquidity.
  • Lower Rates for Experienced Borrowers: If you’ve flipped several properties or have solid financials, you may get better rates.
  • Fixed Guidelines: Private money lenders have specific loan programs you must fit into, such as 90% purchase financing and 100% rehab costs.

Example

You’re an experienced investor looking to fix and flip a property. A private money lender could offer better rates if you have a high credit score as well as some money to put down.

Key Differences Between Hard Money and Private Money

Feature Hard Money Private Money
Focus Property’s value and deal strength Investor’s credit, experience, and liquidity
Flexibility Highly flexible, deal-specific Strict guidelines, fits into specific boxes
Approval Time Fast approval, often within days Longer approval process
Down Payment Can offer 100% financing for strong deals Typically requires 10% or more down
Best For New investors, quick closings, unique deals Experienced investors with time to qualify

When Should You Use Hard Money?

Hard money loans are perfect if you:

  • Need fast funding for a time-sensitive deal
  • Have little experience but found a solid investment
  • Require creative financing, such as cross-collateralization
  • Are dealing with smaller or unique properties

When Should You Use Private Money?

Private money loans might be your best option if you:

  • Have experience with flips or rental properties
  • Have a strong credit score and liquidity
  • Want lower interest rates
  • Can wait longer for approval

What’s Best for You?

At the end of the day, hard money and private money both have their place in real estate investing. However, if you need flexibility, quick approvals, or 100% financing, hard money is the way to go. On the other hand, if you have a solid track record and can fit into stricter guidelines, private money may save you some costs.

Need Help Finding the Right Loan?

At Hard Money Mike, we offer tools like our Loan Cost Optimizer to help you compare hard money and private money rates. Whether you’re looking for 100% financing or need a specific loan for your fix-and-flip, we’re here to help you get the deal done.

If you have questions or need guidance, leave a comment below or contact us for more details. We’re here to help you find the best option for your next project!

Watch our most recent video to find out more about Hard Money vs Private Money.

Property 911: Best Solutions for Real Estate Investors in Trouble

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Property 911: Best Solutions for Real Estate Investors in Trouble

Sometimes, real estate investing doesn’t go as planned. Don’t worry, there are ways to get things back on track. Let’s dive into four practical solutions for property 911 in order to find the best solutions for real estate investors in trouble.

Why Real Estate Investors Get Stuck with a Property

There are many reasons an investor might find themselves in a tough spot. Here are some real-life examples:

Example 1: A Vanishing Partner

Nick reached out to us when his financial partner, who was supposed to cover the carrying costs and repairs, disappeared right after closing. Nick was left holding the bag with a property that needed fixing up before it could hit the market.

Example 2: Escrow Issues

Another investor had a loan with a large national lender, but the lender stopped escrow payments. This happened because some unexpected issues popped up that weren’t in the original budget. The lender decided to freeze the escrow until everything was back on budget, leaving the borrower in a tough spot.

Example 3: Tapping into Equity

One investor owned a property that had been a rental for a few years. She wanted to fix it up to sell and needed $25,000 to $30,000 to get it ready. With $100,000 in equity sitting in the property, she was eager to cash out and start her investing journey in earnest.

Four Solutions to Rescue Your Property

Now, let’s look at four ways to solve these common problems and get your property moving again.

1. Use Credit Cards

Use 0% interest credit cards to cover costs. A service like Plastiq allows you to use your available balance to pay vendors or contractors, even if they don’t accept credit cards. You can convert your credit card balance into a wire transfer or check, which makes it easier to keep your project on track.

2. Get a HELOC

A Home Equity Line of Credit (HELOC) is a flexible financing option every investor should consider. Even a small HELOC on your primary or rental property can be a lifesaver. It gives you access to cash when you need it for supplies, contractors, or even earnest money. Having a HELOC ready to go can help you finish a project quickly, so you can move on to more profitable deals.

3. Tap into Your Network

Don’t forget about family, friends, or your real estate group. These people may have $20,000, $30,000, or more that could help you finish your project. You might need to put a lien on the property to secure their investment, but that’s a small price to pay to get things moving. 

4. Find a Hard Money Lender

If you’re still stuck, a hard money lender is also a solution. We offer Property 911 loans designed to rescue stalled projects. Whether you use credit cards, a HELOC, or funds from family and friends, the key is to get the project finished. Don’t let it sit for months, racking up costs and stress. The faster you move, the less you’ll pay in the long run.

Don’t Let a Stalled Property Drain Your Finances

Sitting on a property that isn’t moving forward can be costly. Each month, you’re paying interest, taxes, and other expenses without getting closer to your goal. Speed is crucial. The sooner you get your project back on track, the less you’ll spend on carrying costs, and the more you’ll make when it’s time to sell. If you’re facing a Property 911 situation, reach out to us. We’re here to help you find the best solution to get your investment back on track.

Watch our most recent video to find out more about Property 911: Best Solutions for Real Estate Investors in Trouble

Small Town Investing: How to Energize Your Real Estate Deals

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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

I’m Stuck in a Hard Money Loan: How to Get Out

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I’m Stuck in a Hard Money Loan: How to Get Out

Today we will discuss the common reasons why investors get stuck in a hard money loan and provide practical strategies to break free. From exploring refinancing options to making timely decisions, we’ll guide you toward regaining control of your investment journey. 

Two main reasons:

  1. Project Delays:

    Construction or permit delays extend project timelines far beyond what was initially planned. Since most hard money loans have fixed terms, borrowers are faced with the option to either secure additional funding to complete the project or sell the property.

  2. Property Not Selling:

    This is due to either overpricing or market conditions. By continuing to hold onto the property without adjusting the price, it results in significant financial losses.

How to Get Out:

  1. Refinance with Another Hard Money or Bridge Loan:

    Secure a new loan in order to provide the necessary funds to either complete the project or aid in  the sale of the property. This option allows investors to regain control and momentum in their projects.

  2. Sell the Property As-Is:

    Sometimes, the best course of action is to sell the property in its current condition to another investor. While this may result in a loss, it also prevents further financial bleeding caused by holding onto the property.

  3. Refinance into a Long-Term Loan:

    Investors can refinance into a long-term loan, such as a permanent loan or a traditional bank loan. This option also allows investors to transition the property into a rental, which can decrease monthly losses or potentially create a profit.

Save Your Deal:

  • Don’t Get Stuck:

    Don’t fall into the trap of continuing to invest in a project solely because you’ve already sunk money into it. Assess the current market conditions and make decisions based on realistic projections rather than past investments.

  • Quick Decision Making:

    When faced with a stagnant property, make timely decisions to either adjust the price for a quick sale or pursue refinancing options. Don’t risk losing time and money because of indecision.

  • Seek Professional Guidance:

    Reach out for expert advice and assistance today. Consulting with experienced lenders or real estate professionals can provide valuable insights and help navigate challenging situations.

Get Help Today!

Contact us today! There are solutions available to help you regain control of your investment. Reach out to HardMoneyMike.com for expert guidance and support. Whether you need refinancing options, project advice, or assistance with navigating your loan terms, we’re here to help.

Watch our most recent video to find out more.

 

Are You Paying Too Much for Your Real Estate Loans?

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Are You Paying Too Much for Your Real Estate Loans?

Hey there! Ever wonder if you’re paying too much for your real estate loans? It’s a common concern, especially with all the myths floating around about hard money being a wallet-drainer. But fear not, because we’ve got a nifty tool that can help you cut through the confusion and get a clear picture of what your loan will really cost you. Let’s dive in!

The Loan Cost Optimizer: Your Money-Saving Sidekick

Introducing the Loan Cost Optimizer! This handy tool takes the guesswork out of loan expenses by allowing you to compare costs and fees from different lenders. Think of it like a virtual cost calculator tailored specifically for real estate investors.

How It Works

  1. Input Your Costs:

    Start by plugging in your loan details, such as interest rates, loan duration, and any additional fees.

  2. Compare Your Options:

    The Loan Cost Optimizer crunches the numbers and presents you with a side-by-side comparison of different loan scenarios.

  3. Find Your Best Deal:

    Explore various loan options based on factors like project duration and required down payment to determine the most cost-effective choice for your needs.

Debunking Myths

There’s a misconception that hard money loans always come with exorbitant costs. However, our tool reveals that hard money isn’t always the priciest option. In fact, you might be surprised to find that it often stacks up favorably against other lenders, especially when considering factors like speed and flexibility.

Quality vs. Complexity

When it comes to choosing a lender, quality matters—but so does simplicity. While banks may offer perceived “higher quality” loans, they often come with a mountain of paperwork and stricter requirements. On the other hand, hard money lenders offer a streamlined process with fewer hoops to jump through, making them a viable option for many investors.

The Bottom Line

At the end of the day, what matters most is finding a loan that fits your needs and budget. The Loan Cost Optimizer empowers you to make informed decisions about your financing, helping you save both time and money in the long run.

Get Started Today!

Ready to take control of your loan costs? Head over to hardmoneymike.com to download the Loan Cost Optimizer for free. It’s easy to use, customizable to your specific project, and could potentially save you thousands of dollars. So why wait? Happy investing!

Watch our most recent video to find out more about: Are You Paying Too Much for Your Real Estate Loans?