Tag Archive for: how to invest in real estate

Text: "Get Money Wise!"

7 Real Estate Loan Fundamentals – Hard Money 101

For a successful investment career, start with these 7 real estate loan fundamentals.

Are you “money wise”? It’s not hard to get there. And it will save you a lot of cash down the line.

It’s like when a person who knows about cars goes to a mechanic – they have peace of mind because they understand what’s going on. If you’re not a “car person,” at the mechanic’s it’s harder to figure out if they’re telling you the truth, or just trying to sell you more than you need.

As a real estate investor, leverage is at the center of what you do. It’s like a foreign language when you first start out. But when you become money wise, the leverage in your real estate investment career is fully in your hands.

Here are 7 real estate loan fundamentals that will make you money wise.

Fundamentals of a Real Estate Deal

There’s certain information you’ll need to bring to your lender when you need a loan. If you know the answers to their questions, the time with your lender will be much more productive.

At the end of the day, lenders want to know: Do you have a good deal? (And you should want to know the answer, too!)

We’re going to dive into 7 main concepts to answer that question:

  • Strategy
  • Purchase Price / Contract
  • Scope of Work
  • Budget
  • Estimated Profit  / Equity
  • Comps / ARV
  • Exit Strategy

1. Strategy – What Is a Real Estate Strategy?

When your lender asks about your strategy, they want to know whether you’ll use the property as a

  • fix-and-flip
  • a rental
  • or if you’re not sure yet.

What is a real estate strategy dependent on? 1) your goals, and 2) the property.

You’ll have to know the numbers to know if the property will make a good flip with carry costs you can afford, or if it would cash flow well as a BRRRR-style rental.

But how do you “know the numbers”? Let’s start with the cost of the property.

2. Purchase Price / Contract – What Are the Fundamental Numbers of a Real Estate Loan?

Your lender could refer to this as purchase price, contract, or as-is value.

In real estate investment, there’s a distinction between what you’re paying for a property and what it’s worth. The purchase price isn’t necessarily what the value of the home is. 

This is the number on the contract, the number you’ve agreed to buy the property for. And this number is foundational to whether or not your project will turn a profit.

3. Scope of Work – How Do You Fix Up a Real Estate Investment?

Many beginner investors mistake “scope of work” for the budget. Scope of work is what you’re going to do to the property, not the number of what that work will cost. 

Will you add a bedroom? Re-do the garage? Are you going to convert the porch to additional square footage? Or add egress windows to the basement?

Scope of work is your rehab plan. Lenders need this info to find out what kinds of properties they should compare to yours to estimate an after repair value.

4. Budget – What Is a Real Estate Budget?

During the conversation with your lender, have a high overview of your construction budget. You don’t necessarily need all the details ironed out quite yet.

For example, you can estimate that the kitchen will cost $10,000, siding $6,000, windows $4,000, and new paint $2,000. At this point, you don’t need to share a breakdown of the cost of each new appliance, labor and materials, etc.

You just need a realistic estimate of how much it will cost to get into the property. Having your scope of work lined out helps you with an estimated budget. When you know the purchase price an your budget, then you know how much the entire project will cost.

5. Estimated Profit (Flips) / Estimated Equity (Rentals) – How Much Will a Deal Make?

Estimated profit is what you expect to make on the transaction, between buying the property, fixing it up, and selling it again.

Equity is the difference between the amount you owe and what the property is worth. You build equity on your rentals by successfully refinancing after a flip and paying down the mortgage with rent income.

The number one reason to be in real estate investment is to make money and create wealth – it’s true for lenders, and it’s true for you. So, it’s important to both you and your lender that your properties make profit or build equity.

You’ll need your estimated profit / equity when you bring a deal to your lender.

6. Comps / ARV – What Does ARV Mean in Real Estate Investing?

ARV is the after repair value. It’s what the property will appraise for, or sell for, on the current market once the scope of work is completed.

You estimate a property’s ARV by looking at the prices of similar homes in the current market. 

Comps (comparables) are those similar homes you look at. It’s important that your comps have the same value as your property.

For example, if your deal is for a 950 square-foot home, you’ll compare it to other 900 to 1,000 square-foot homes on the market, not a 2,000 square-foot one. A 2-bedroom, 1-bath house will be compared to houses of the same specifications, and not compared with 4-bedroom, 2-bath homes.

For your ARV to be accurate, you need to stay true to your scope of work. If you only repaint and re-carpet a house that needed much more work, you won’t get top-of-the-market value when you try to sell or refinance.

On the other hand, if your scope of work is a full remodel, your comparables should be homes that are fully remodeled, so you don’t miss out on any profit.

The money you put into fixing up a house isn’t a direct indicator of how much the house will be worth. What the property looks like when it’s finished has nothing to do with how much it cost to get it there.

To find the true profitability of a deal, your ARV and comparables help:

ARV – (Purchase Price + Budget) = Profit Amount

7. Exit Strategy – How Will You Pay Your Real Estate Loans?

When a lender asks for your exit strategy, they want to know your plan for paying off the loan. For hard money loans, your exit should be fast.

If it’s a flip, your exit strategy is to sell the property, then pay off the loan.

If it’s a rental, your exit strategy is to refinance into a long-term loan, which will pay off the hard money loan.

The Why Behind Money Wise – Real Estate Investing Definitions

When you come to the table prepared, with strategies, numbers, and knowledge, you can speak the same language as your lender.

This is key to ensuring you have a safe transaction with a lender that is working in your best interest.

Curious About Other Real Estate Loan Fundamentals?

If you have any questions, or want coaching through a deal, we’re happy to help. Reach out at HardMoneyMike.com.

For more info on real estate loan fundamentals, keep up with our Hard Money 101 series on our blog, or visit our YouTube channel here.

Happy Investing.

Text: "Start investing in real estate at 40"

How to Start Investing in Real Estate at 40

Set yourself up for retirement – start investing in real estate at age 40+!

We have a lot of people in their 40s and 50s come to us wanting to get into real estate investing. They always say the same thing:

“I wish I would have started 20 years ago.”

But it’s never too late to start real estate investing. The best time is now.

It’s possible for people 40+ years of age to start real estate investing now and retire at 65.

Here’s our plan for how to kickstart your real estate portfolio quickly. In 10-15 years, you’ll have wealth built and cash flowing for retirement.

How to Create Wealth Investing in Real Estate Past 40 – The Plan

Here’s the plan we give to people wanting to start investing in real estate at 40: 

Buy ten properties in three years.

For a beginner, that sounds like a lot. But we break it up, you take your time, and ten properties in three years becomes doable.

The Breakdown

Year One: You buy two properties. You’re learning the ropes this year, so you take it slow. Take this year to learn how to do everything right, build relationships in the industry, and prep for the coming years.

Year Two: You get three more properties. After the initial experience of your first year, it’s a reasonable stretch to do one more property. By the end of year two, you’re halfway to your goal of ten properties.

Year Three: You do the remaining five properties. By this time, you’re in the swing of things, you know the right people, and buying five properties in one year is very manageable.

Now Is the Best Time

This is a great time to be in real estate investing. Rent is high, supply is low. Plus, we’re about to hit a recession. 

Property prices will come down soon. Low prices are the best time to buy, and the best opportunity to create the most wealth.

Maybe after hearing all this, you’re concerned about how you’d pay off ten properties in 10-15 years. How are you really building wealth when you’re spending hundreds of thousands on real estate?

You don’t have to wait 30 years to pay off the mortgages of these homes. Next, we’ll talk about the numbers behind this plan and how these ten properties will change your retirement.

Example of Building Wealth in Real Estate Over 40

So the plan is to buy ten properties, fast. You’ll learn the logistics of that process quickly enough with the three-year breakdown… But how on earth are you expected to pay for ten pieces of real estate in such a short amount of time?

Here’s an example of how the money breaks down for these retirement properties.

What Type of Properties to Buy Over 40 (And How to Pay for Them)

These ten properties should be BRRRRs or subject tos. Both of these real estate investment methods are ways to: 

1) Gain properties with little to no money down

2) Create rental properties that will generate cash flow.

So when we say “buy 10 properties,” it’s not with money out of your pocket. It’ll be with debt leverage and investment strategies that will help you reach your goals quickly (without dipping into retirement savings or hurting cash flow).

Understanding Your Numbers – Example of Real Estate Retirement

In this example, we’ll look at properties with a value of $200,000. That number is spot on for some regions, and very low for others. Remember, you can use these same equations and concepts no matter what actual price range you’re dealing with.

Let’s say we’re using BRRRR and looking at $200,000 properties. You can get a loan for $150,000 per property (which means you only owe $150,000 on each house).

Each property adds $50,000 in net worth to your portfolio. So ten properties in three years automatically builds you $500,000 in net worth.

Also, these rental properties will add up to $800/month in cash flow (more on cash flow in the next section).

Chart of property costs, amount owed, and net worth. Total net worth is $500k.

How to Use Cash Flow

If you don’t need the cash flow immediately, you can use it to pay down the loans. This way, you own the houses free and clear. When you do retire, you have all that equity in your portfolio, plus a higher monthly cash flow.

Next, we’ll dig into the details of cash flow and how it can help you retire early.

Retire Early with Real Estate – How to Make Cash Flow Work for You

We’re all about the money and leverage side of real estate. We want you to understand the numbers behind the mortgages so you can reach your goals and get out of the loans faster. 

To retire early at 40+, it’s important to look at some key numbers.

Evaluating Cash Flow When You Start Investing in Real Estate at 40

Let’s look at an example property that has a loan for $150,000 and an interest rate of 6%. 

In this case, your monthly principal and interest payment will be $899.33.

Once you add taxes, insurance, and other costs, you’ll be at $1,184.33 in expenses.

If you’re in an area where you’re finding a $200,000, 3-bedroom 2-bath property, you should be able to reasonably rent for $1,600.

With that rent, we’d have a net total of $415.67/month coming into the property.

Chart showing loan amount and rate, monthly principal and interest, total expenses, and rent. Net cash flow is around $400 per month.

How Should You Use the Cash Flow?

If you’re nearing retirement age and don’t need to pocket the cash flow on your new properties, there are some options to make that money work for you.

By using the income from your rentals, you can get the properties completely paid off. So once you finally retire, you’ll have several options:

  • Sell off the houses
  • Take out equity loans to buy more real estate or supplement retirement income
  • Get higher cash flow on each property with no loan payments

Increasing Cash Flow to Retire Early with Real Estate

If you use the cash flow on properties pre-retirement to pay down the mortgages, you can retire early (and with more money!).

Let’s round our $415.67/month net income down to $400. So instead of taking that $400 and putting it in your pocket, let’s see what it looks like to pay down an extra $400 on your mortgage every month. 

Instead of paying around $1,200 toward your loan plus insurance and taxes, you’ll be doing around $1,600/month total. 

This will cut your mortgage down to 14 years. So even if you’re 50, you can own these properties free and clear by the time you’re 65. 

And once all the houses are paid off, you’ll automatically have:

  • $2 million in equity.
  • $1,300/month income per property. (You no longer have to pay principal or interest, just taxes and insurance.)

$1,300/month per property equals $13,000/month total across 10 properties. That’s an annual income of $156,000/year. While being retired!

Chart showing the math to find annual cash flow. Annual cash flow is $156k.

Long-Term Wealth in Real Estate Over 40

Once the houses are paid off, the only work left to do is upkeep on the properties. A small price to pay to make over 150k every year you’re retired! 

These calculations, of course, are in “today’s” money. Inflation will continue at a steady rate, so rents will go up and home values will go up. But all costs will rise over time, so these amounts will “feel” about the same.

It’s never too late to start investing in real estate.

Real Estate Investing for 40+ Beginners with No Money

Ten properties in three years. Paying down the loans so you own them free and clear by retirement. It really is great, but…

How can you start with no money?


BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. 

You buy the same type of properties as fix-and-flippers, but instead of selling them, you rent. They’re properties from wholesalers that are listed undermarket.

These properties require quite a bit of work to fix up, but they have the opportunity for the highest cash flow.

Subject To

A subject to is when you take ownership of someone’s property without taking out a loan. You make all payments, but the previous owner keeps their mortgage on it.

Subject tos are a great way to get into a property for little money – this is especially important since money is tightening in the real estate lending world. This investment technique has been less popular in recent years, but with the market turning, they’ll be coming back strong in the next year or two.

The Value of No Money Down Investing for Soon-To-Be Retirees

You don’t want to tap into your retirement or savings with your real estate investments – you want to add to them.

Look into BRRRR, Subject Tos, and other no money down investment techniques. This is the path to adding $2 million to your net worth without spending any money.

Real Estate Investing for Beginners in a Recession

A recession can cause unease for people nearing retirement – and people who are considering any major investments.

So why is this the best time to get into real estate investing? Even for older people?

Looking Back at the Great Recession

If you had bought the homes real estate investors did in 2010, you’d be retired by now.

Our current market is beginning to look a bit like 2008-2009 – a recession coming on, inflation hitting, the money supply tightening. Which means there will be more homes available at a discount.

Consumer debt is increasing. Especially after the housing blitz we’re just getting out of, it will be harder for homeowners to keep up on payments. When people need to move, it will be harder for them to sell. People get stuck with houses they can’t afford. 

For real estate investors, that means there’s more inventory, at lower prices.

Using The Recession to Increase Net Worth

Buy soon, when prices are down and inventory is high. In the future, rates will come down and prices will go back up. So that plan that offers $2 million of net worth could potentially double or triple.

In 2010, we helped people use the same retirement real estate investment plan outlined in this article.

One client bought ten properties that year. Since then, his real estate has quadrupled in value, and ten years later, he owns eight of the properties free and clear.

This is the time. You don’t want to buy when prices are high and sellers have control. Jump in and buy now to get the deals that will truly create wealth and help you achieve the retirement you want.

Start Real Estate Investing at 40 – Where to Go From Here?

Whether you’re ready to kickstart your investment career now or not, the best place to start is to get educated.

It doesn’t matter if you’re 30, 40, or 50 years old. Reach out to us with specific questions, or any help starting your plan for retirement at info@hardmoneymike.com or HardMoneyMike.com.

Visit these links for a BRRRR investment guide and more information on no money down investing.

Text: "How to Invest When Inflation Hits"

How to Invest in Real Estate During Inflation: Your Credit Score Matters

Let’s unpack what it means to invest in real estate during inflation.

Inflation is rising. Interest rates are rising. Lenders are looking at risk and reward, and they’re becoming much less lenient than they’ve been in the recent past. 

Think of this time like 2010: investors who aren’t ready will have a hard time continuing their business. Investors who are ready can jump in and take advantage of chances to build generational wealth. 

What will be the key to preparedness for this downturn in the market? Credit scores.

Let’s look at lender credit score requirements, lending options, and how to invest in real estate during inflation.

What Is the Credit Score Range?

Credit scores range from the 400s to the 800s. Lenders, though, look for 620 to 800 credit scores. 

Credit Score Ranges and LTV Expectations

In recent times, 640 used to be an average minimum score for lenders. But in the last several months, that’s risen to an average of 680.

Lenders are prioritizing quality over quantity in who they lend to, dropping off 15-20% of available borrowers.

In addition to changing credit score requirements, many lenders are also changing how much they’ll lend. 

We know some lenders who have raised their requirements from 640 to 680, and they’ll only loan out 65% LTV. To get 80% LTV, they used to require 690-700; now, that credit score range is 720-740.

How Interest Rates Impact Lender Credit Score Ranges

With rising interest rates, it will be harder to get cash flow on properties. If your rate goes from 3% to 6%, that’s doubled the amount of interest you pay every month.

Lenders will be concerned with cash flow. They want to make sure they lend to solid people who have a good history of making their payments.

As rates and inflation go up, you need to be prepared to take advantage of what will happen in the market as you invest in real estate. 

You’ll need to know what credit score range lenders are looking for, and you’ll need to know your score.

How Do I Check My Credit Score?

A good credit score is necessary for successful real estate investing. So it’s important to answer the basic question: How do I check my credit score?

Does Checking My Credit Affect My Score?

How can you check your credit without it impacting your score? If your credit is checked in the wrong way, it can impact you by 3-5 points. Not a big deal, right?

But if your lender requires a 680 credit score, and you go down to a 679… you just got squeezed out of the loan.

There are two kinds of credit checks: hard inquiries and soft inquiries. A hard inquiry will knock your score down temporarily. Luckily, most methods of checking your credit online are soft inquiries and shouldn’t impact your score.

Where Can I Check My Score?

You can start somewhere like CreditKarma.com and sign up for a free account. Even though it’s not FICO-score-driven, it can give you an idea of where you’re at. It’s a good way to check your credit score without affecting your credit.

You can also visit AnnualCreditReport.com for a yearly free copy of your credit report. Also, some banks and credit card companies will offer a free credit checking service with your account.

Use these free, online checks that don’t bother your credit to keep a pulse on your score. Check these three months before you need a loan. That gives you time to take (or avoid) certain actions to raise or maintain your score for when you apply for the loan.

Know Your Score to Get Ahead

We’ve been spoiled in the last decade with low rates, easy money, and wide options. That’s all slowly coming to an end. Lenders will be pickier, with higher rates and fewer options. 

But that means there will be fewer investors out there buying, so the opportunities are even better for you. As long as you’re credit-ready.

Loans for Real Estate Investing Amidst Inflation

Who are the lenders for real estate investing? Here are the basics of each lender and how rising inflation and interest rates will affect your relationship with them as you invest.

In real estate investing, there are three key lenders.

1) Banks and Credit Unions

National banks don’t usually have many options for real estate investors. But local banks and credit unions love real estate investors.

Even so, banks are the most conservative lenders. They’ll be especially tight with their money until they figure out the new normal with updated federal interest rates. 

As a real estate investor, bank loans will be increasingly difficult to get. It’ll be more common for banks to lend 60-70% of the LTV with high credit score requirements. 

In the last few months, we’ve been receiving four times as many calls as usual from investors who typically go through banks for all their money. Already, investors are getting turned away by banks.

2) Hard Money Lenders

There are two types of hard money lenders: national and local. Each type of lender will approach the change in the economy in a different way.

Much like banks, national hard money lenders will tighten up on their requirements and options. National lenders were known for offering up to 90-100% LTV. Now, they’ll only lend 80% and their credit score range requirements have gone up. The higher your credit score, the higher your leverage with national hard money lenders.

Local lenders won’t change nearly as much based on the economy. Smaller lenders make their income by loaning money, so they’ll never tighten too much. Local hard money lenders don’t typically have any credit score requirements. 

Get to know the hard money lenders in your area. They’re a valuable asset to have in your portfolio of lenders, especially now, and especially if your credit score is outside of the range of traditional lenders.

3) Real OPM

OPM is Other People’s Money – from family, friends, neighbors, or other people in a position to lend. You might think that normal people wouldn’t want to loan you their money at a time like this. But you would be wrong. 

People with money in the bank are making around a 1% return. So getting a 5%, secured return from you is way more appealing. OPM lenders won’t care about credit – as long as you secure their money and ensure them a return. 

All three of these lending sources will be important. You’ll need a mix of all of them. Putting them together in the right way will accelerate your real estate career.

Credit Score Requirements for Fix-and-Flip Loans

During inflation, how does your credit score impact the flow of money to invest in fix-and-flip real estate?

We monitor a few national wholesale companies that have raised credit score requirements 40 points and dropped their LTVs by 10%. And it will only get tighter.

These lenders will charge higher rates too. One of these companies used to have 7% interest rates. Now, they’ve already risen to over 10%.

What does this mean for you?

You’ll need to raise your credit score to have a chance at these loans. And between lower LTVs and higher interest rates, you’ll have to expect to put more money down.

Use these tricks to raise your score while applying for new loans.

BRRRR Loans and Credit Score Requirements

During inflation and rate-rising, cash flow can take a huge hit. This means you’ll need to be much more careful with BRRRR loans.

BRRRR’s Two-loan Strategy with Rising Requirements

We’ve mentioned how traditional bank loans are changing. But even DSCR loans – loans based on rental income from property – are raising rates up to 9% and requiring credit score minimums.

You’ll have to be much more intentional with your BRRRR loans.

In BRRRR, there’s two loans, and you’ll need good credit scores for both. The first is a hard money loan (where national lenders require higher scores). The second is long-term, either a traditional bank loan or a DSCR (which are all raising requirements).

Upcoming price drops and foreclosures will be perfect opportunities for BRRRR properties. Investors who can get approved for financing will be the first to take advantage of these opportunities.

Fewer investors will be able to keep their business going. You need to know your credit score so don’t lose out on funding!

Be Credit-Ready

Your credit score is an important part of your business. You’ll need to be better at credit than ever before in your real estate career.

You can take advantage of this dip! Be credit-ready to invest in real estate during inflation.

Download our credit score checklist here.

Watch our videos on credit preparedness here.

Happy Investing.

How to Combat Red Flags in Real Estate

3 Ways to Combat Real Estate Red Flags

3 Ways to Combat Real Estate Red Flags

It’s time for a real chat.

Because we care about our clients and anyone else who decides to invest in real estate.

So, here’s the brutal truth: there are people who will lie to you in this industry. Lenders, realtors, other investors, and so on. Or only tell you half-truths.

I know. This is a HUGE surprise.

Okay, maybe not.

But, even if common sense and experience tells you that people lie, you can’t always believe it when it happens to you.


Because, more often than naught, you WANT something to be true, especially when it comes to making money. You want to believe you found an incredible deal, or an incredible lender, or an incredible something that nobody else has had the luck to find.

We all want those incredible moments to be true, right?

But most of the time, they’re just not.

So, what can you do to protect yourself and your wallet from real estate red flags?

Well, here are 3 tips we give to our clients:

First, if it seems too good to be true, it probably is.

For example, “If you buy this property, then you can generate $5,000 – $6,000 every month.”

Okay, that’s definitely a red flag.

Sure, we all want to make excellent cash flow on our properties. But, even in our competitive market, it’s near impossible to make $5,000-$6,000 every month on a standard rental in most towns or cities. The norm is more like $200-$500 a month…at least until a property pays off.

But, even then, making $5,000 – $6,000 every month with a single property is…too good to be true.

Unfortunately, we’ve seen this situation happen more than once to our investors. They get convinced of a sweet, sweet deal and jump into it. And…it doesn’t take long for them to figure out the person who convinced them to buy the property streeetched the numbers and the truth…a lot.

So, what can you do when a red flag waves in your face?

Ask questions.

Okay, someone told you something that’s too good to be true. Now what?

That’s right: ask questions. A lot of them!

For example, let’s say a lender quotes you a 4% rate when everyone else is quoting you about 10%.

Your first reaction is to cheer and think, “That’s amazing! I’m so happy I called this lender.”

But your second reaction should be, “Wait, why? Why is this lender quoting me so much lower than everyone else? What do they see that the other lenders missed? Why are they so much more forgiving and accepting of my financial history?”

There’s gotta be a catch.

Trust us, there is.

When lenders give quotes that are significantly lower than their competitors, it’s because they pad the rest of the loan with junk fees. They charge for everything, not just the loan itself. So, before you know it, you’ll be paying more than the 10% interest you would’ve paid with one of the other legitimate, honest lenders.

So always ask questions when a red flag pops up.

And, part of that process includes…

Getting a second opinion.

So, a red flag went up. Then you asked the lender, realtor, seller, investor, or whoever a bunch of follow-up questions to figure out if they’re telling you the truth…or yanking your chain and taking advantage of you.

Sadly, even if you grill this person, you might not get a direct or honest answer from them.

So, go and get a second opinion. Heck, get a third opinion! There are plenty of experts in the field to ask. Go out and see what they think of this “too-good-to-be-true” offer. Is it real…or fake?

Spoiler alert: it’s probably fake.

By taking these simple steps, you can protect yourself and your wallet from falling into a bad situation.

Just remember:

If it’s too good to be true, ask questions and then get a second, third, or even fourth opinion. Do your due diligence to save yourself a lot of hassle…and money.

Happy investing!

Is hard money a trap

Hard Money is a Scam

Hard Money is a Scam

Many years ago, a rumor spread that hard money is a scam.

It all started with a real estate investor who could not qualify for a bank loan, so they turned to a hard money lender. Unfortunately, this real estate investor didn’t understand how hard money worked. So they had a bad experience. Like, really bad.

After that, they told ALL of their friends, “Hard money is a scam.”

And then those friends told their friends the same thing, even though they themselves had never used a hard money loan.

The rumor spread quickly. For miles and miles, investors caught wind of the false news that hard money wasn’t good for them or their wallet. One by one, they turned their back on this loan option and struggled to find another. And they lost a lot of money.

All because one investor had a bad experience. A bad experience that could’ve been prevented had they done just a little bit of homework.

Because here’s the truth. Hard money is NOT a scam.

It’s actually a genuine, honest-to-good option for investors who:

  • Can’t qualify for a bank loan.
  • Need to close deals fast.
  • Want to save money by avoiding extra costs for things like appraisals and inspections.
  • Or all of the above.

So, what gives hard money such a bad rap? Well, most of the time, it’s because real estate investors jump into a hard money loan without understanding it.

So, what is hard money?

Well, it isn’t like your normal bank loan.

Bank loans are usually long-term. Like, 15-30 years. Hard money, on the other hand, is intended to be short-term, like 3-6 months. If you keep a hard money loan longer than a year, then you’re not really using it correctly. Because, yes, hard money lenders charge higher interest rates than banks. There’s no denying that. And you don’t want to pay those rates longer than you need to.

That’s why it’s so important to have a plan to flip or refinance a property before entering a hard money loan.

Another major difference between bank and hard money loans is the closing process. Bank loans take at least a month to close. They also require more paperwork and fees to make that closing happen.

Hard money loans can close in just a few days and require far less, well, requirements. You don’t need to worry about appraisals and inspections and other costs that don’t get taken into account with bank loans.

That’s why they’re perfect for fix and flips, rentals, and other value-add properties. You can find a great property, bid on it, and buy it FAST.

Basically, hard money is an excellent tool to help investors compete in a very competitive real estate business.

It’s not a scam.

And anyone who claims it to be scam has either never used it because they listened to the false rumors that spread many years ago. Or they’ve used it, but they didn’t use it right.

To learn how to use hard money right, check out some of our other videos on our Youtube channel.

Our team strives to help investors understand hard money so they can buy the properties they want, when they want…and without hurting their cash flow.

Happy investing!

Introducing Flip-It, Pro-Fit, a Contractor Partnership Program

Introducing Flip It, Pro-Fit, a Contractor Partnership Program

Introducing Flip It, Pro-Fit, a Contractor Partnership Program

Today, we’d like to introduce our new contractor partnership program. Because we want you to make more money doing the work you love.

And with our Flip It, Pro-Fit Contractor Partnership Program, you can.


This special program is designed for any contractor who’d like to stop doing work for flippers, and start doing work for themselves…but who might want help on the business side.

That’s why it’s a partnership. Our company will handle all of the funding and paperwork, while you’ll handle all of the renovations.

Basically, we fund. You flip.

It’s as easy as that!

And, no. Right now, we do NOT charge commitment fees or anything else like that. This is truly a partnership program.

And when you partner with us, you can expect:

  • Less paperwork
  • More Money
  • No payments
  • And help creating a “bank worthy” portfolio.

Best yet, we’ll find the properties for you.

All you need to qualify for the Flip-It, Pro-Fit program is:

  • 3-5 years of experience as a contractor
  • A crew or team
  • Properties that sell for $250K or less AFTER they’re repaired
  • And a no BS attitude!

If you love fix and flips, but you don’t like seeing someone else get all the profits for your hard work, then here’s your chance to take control.

With the Flip-It, Pro-Fit program, you can keep doing the work you love, but make A LOT more money.

Ready to chat? Our team is always here to answer your questions and get your cash flow moving in the right direction.


Motivational Monday: Invest Today

Motivational Monday: Invest Today

Yes, another Monday is upon us, and you know what that means, right? Yep, time for a dose of motivation.

We think Mondays are the best days to kickstart goals. That includes all goals related to real estate investing. Because if you don’t start investing today, then you’ll wake up tomorrow and think, “Why didn’t I take the plunge yesterday?”

Motivation Monday: Invest Today

Look, we know how difficult it can be to begin something new…or something you haven’t done in a while.

Whether it’s quitting a bad habit, shedding a few pounds, or tackling new responsibilities, we completely understand how much effort it takes to make a change. We know how tough it is to get up on Monday morning and say, “I’m going to do THIS today.” Especially if “this” is telling yourself you’re going to invest today.

But we know you can do it.

Because we have to do it, too. We’re human just like you and everyone else. Therefore, we must challenge ourselves to find ways to improve and reach for the stars (yes, that sounds cheesy, but it’s the truth).

If we don’t look Monday (and every day) in the face and choose to better our lives, then our lives won’t change. And that’s never good, because when we remain stagnant too long we miss out on countless opportunities. The amazing, life-changing kind of opportunities that–although scary upfront–turn out to be the best thing that ever happened to us.

So, if you’re reading this and you’re debating taking the leap into real estate investing, then GO FOR IT! Truly. It might seem daunting and overwhelming right now, but if you don’t let yourself take risks, then you’ll never get a chance to reap the rewards.

And, remember, you can always start small. In fact, we’ve just started a new Money Chat where you can join like-minded investors to learn more about investing in fix and flips, rentals, and other value-add properties.

Our entire team believes in you. And we would love to show you how you can start investing today so you won’t regret it tomorrow.

Happy Monday and happy investing!

How To Buy a Fix and Flip: The First Key Steps

How To Buy a Fix and Flip: The First Key Steps

How To Buy a Fix and Flip: The First Key Steps

Do you know how to buy a fix and flip? Because if you’re new to investing in real estate, there’s a chance you’re not sure where to begin this process.

You might think, “Well, I’ll just get a loan.” But do you know what “getting a loan” really means?

That’s why today we’re going to take a look at the different real estate lenders you can rely on—and which ones you might have to rely on until you boost your credit score, build a real estate portfolio, or complete one of the other qualifications that some lenders require.

To begin, there are 5 popular real estate lenders. Each one has various pros and cons, so let’s start with the most simple and basic lenders.

Friend or Family Member

The upside to asking a friend or family member for a loan is, well, you’re asking a friend or family member for a loan. You know them, and you probably know them very well…well enough to ask them for money.  The only qualification you really need is a decent relationship.

The downside is, well, you know them. They’re your friend, your dad, your sister, or someone else you have deep roots with. That makes the entire loan process way more personal, which means there’s a lot of potential for drama—both now and in the future.

Business Partner

Instead of going through a family member or friend, you can get a business partner. A business partner can lend you the money to buy a value-add property with very few if any qualifications. The big pro here is they take on most—if not all—of the financial risks. It’s their money, not yours.

On the flip side, it’s their money, not yours. That means some business partners get greedy. Rather than splitting profits fairly, they demand the lion’s share. To them, it might not matter if you were the one who did all the actual work. They took the risk, so they should get a bigger reward at the end of the day.

Hard Money

If you have some basic qualifications, you can skip the first two lenders we’ve talked about and get a loan through a hard money lender. Hard money loans (aka, Fix and Flip loans) are great when you need to close a real estate deal FAST. We’re talking days instead of weeks or months.

Unfortunately, hard money can be expensive. Rates tend to be higher than other lenders. But every hard money lender varies, so it’s absolutely worth shopping around. Plus, hard money loans aren’t intended to be long term, so the high cost can actually save you a lot of pain AND money in the long run.

What is hard money? Check out our truth revealing series on YouTube!


Banks are the most traditional lender out there. In fact, most real estate investors look to this type of lender before they consider any other. And, why not? Banks usually have the lowest rates available.

Unfortunately, banks also have the strictest requirements, and if you don’t meet those requirements, you’ll get rejected. Worse, the application process is a lot more in-depth, which means closing can take A LOT longer. Which means that perfect investment property you wanted gets snatched up by someone using a faster lender.


Aka, “Other People’s Money.” This is exactly how it sounds. You use other people’s money to buy a property. This is different than asking a family member, friend, or business partner for financial help because there are more boundaries. With OPM, a lender charges interest. That’s it. There aren’t points or profits involved. It’s simple and easy.

The only downside of OPM is finding those who are willing to lend their money to you. But that’s where gaining experience and knowledge in real estate investing helps. The more you know, the more you can prove you’re worth the investment.

So, there you have it. Those are the 5 ways to buy a fix and flip property. Each one has its pros and cons, but each one is a viable option. It just depends on YOU and your financial situation.

Bad credit? No credit? You might have to start with a family member, friend, or business partner

Great credit? Solid income? Extensive real estate portfolio? You probably can jump straight to hard money or a bank loan. Or, better yet, OPM.

Each investor has a different path.

Ready to find out what your path is? Great! Our team is here to help. We’re excited to set you on a path that helps you make the kind of money you need…to live the life you want.

Happy investing!

Thursday Tips: How To Analyze Investment Properties

Thursday Tips: How To Analyze Investment Properties

Ready to learn how to analyze investment properties?

In this great Bigger Pockets article, you’ll learn the nuts and bolts of evaluating real estate deals.

You’ll also discover how to get the information you need to complete a comprehensive evaluation of a neighborhood. That way you can determine which neighborhoods and properties will give you the best return.

And getting the best return is what this business is all about. Because generating positive cash flow is the answer to your financial independence.

But the only way to produce strong income is to put your money in the right properties. And the right properties depend on your analysis.

If you fail to evaluate your deals correctly, then the numbers won’t add up. And that means you might lose money.

A lot of money.


Yes, we’ve said it once and we’ll say it again: Numbers don’t lie.

How To Analyze Investment Properties

Before diving into real estate investing, make sure you understand how to compare markets and properties. Whether you’re trying to decide between investing in Boise or Sacramento—or you’re just comparing two similar homes—this guide will walk you through all the numbers you need to know. From calculating cash-on-cash return to running a comparative market analysis, the experts at BiggerPockets demonstrate the steps you need to follow and the statistics you must know with The Beginner’s Guide to Real Estate Market Analysis.

Ready to learn more about evaluating your real estate investments? Great! Check out the entire Bigger Pockets article here:

Or if you’re ready to chat about your fix and flips, rentals, and other value-add properties, give our team a head’s up.

Happy investing!