Posts

What is the Difference Between Wholesale and Wholetail?

What is the Difference Between Wholesale and Wholetail?

What is the Difference Between Wholesale and Wholetail?

The difference between wholesale and wholetail is actually pretty easy to understand. It all comes down to your buyer, and what needs to be done to sell the property to that buyer.

What is Wholesaling?

With wholesaling, you need to find a heavily discounted property and sell it to someone who is also looking for a discounted property. So, usually a fix and flipper.

Unlike wholetailing, you don’t need to do ANYTHING with a wholesale property. Because you won’t own it for more than a couple of days or weeks. All you need to do is assign the contract to your buyer; or complete a double closing (buy the property, turn around, and sell it the same day).

You’re in and out FAST.

But you might not make as much as you’d make with a wholetail deal. Why? Well, let’s take a closer look at wholetailing.

What is Wholetailing?

Unlike wholesaling, you have more types of buyers with wholetailing.

  1. Fix and flipper. Just like with wholesaling, fix and flippers aren’t going to pay very much because they have to go in and completely renovate the property. They’re looking to make money, so they’re not going to pay more than what you would’ve paid, minus the assignment fee.
  2. Landlord. This buyer will pay a little more than a fix and flipper because they still have to go in and fix the property up so it’s rent-ready. But their renovations won’t be as extreme as a fix and flippers, so the purchase price can be higher.
  3. Retail consumer. These buyers are on the MLS, and they’re looking for a good deal. But they’re not looking to make a profit like a fix and flipper or landlord, so you can charge a higher purchase price. Therefore, they’re the most profitable.

Now, with retail consumers, the purchase price probably won’t be as high as comparable homes in the same neighborhood because the property will still need work. But it’s in lendable condition, so you can still make a good profit. For example, if the going rate in the neighborhood is $300,000, then you can probably charge between $250,000 to $260,000.

Other Differences

Wholetailing also differs from wholesaling because you might own the property for 3 months or longer. Why? Because if you sell to a retail buyer, that buyer might need to get an FHA loan, and FHA loans (aka, bank loans) require certain “seasoning” (meaning you have to own the property for a certain length of time before you sell it). And when you own a property for more than a few days, you’ll need to think about taking good care of it.

No, that doesn’t mean you have to fix it, but you will need to keep it in good, livable, lendable condition. So getting a vacant home insurance policy to protect it against things like fires would be a good idea. Another good idea is putting the utilities in your name to keep the heat and plumbing on, especially during the winter months when pipes freeze and burst.

Yikes!

So, there you have it. Like we said, the difference between wholesale and wholetail is pretty easy. Just think about the type of buyer and what that buyer is planning to do with the property.

Ready to talk about your cash flow options? Great, our team is here to help.

Happy investing!

Florida VRBO: Rental Property Spotlight

Florida VRBO: Rental Property Spotlight

Florida VRBO: Rental Property Spotlight

Why rent a Florida VRBO when you can reap the benefits of renting out your very own vacation home?

 

 

 

 

 

 

 

 

 

 

 

 

One of our clients just purchased this value-add property in the tropical vacation hot-spot of Florida. They took advantage of our quick and easy financing to purchase this home. They plan to fix it up and start renting it to generate positive cash flow.

We always love helping clients across the country fund their real estate investments. Whether it’s fixing and flipping, wholetailing, or closing a financial gap (bridge loan), our team can help. We even assist with long-term/traditional loans.

Ready to get started? Great! Our team is eager to set you on a path that helps you make the kind of money you need, to live the life you want.

Ohio Fix and Flip: Before and After Spotlight

Ohio Fix and Flip: Before and After Spotlight

Ohio Fix and Flip: Before and After Spotlight

Today’s Before and After Spotlight is a fantastic fix and flip property that one of our repeat clients in Ohio completed.

The whole team at Hard Money Mike thinks he did a wonderful job. He transformed an eyesore into a moneymaker for himself and the rest of the neighborhood.

This property is a shining example of what the real estate investing community is all about.

Check out the fix and flip transformation for yourself!

Before and After Fix and Flip

Before and After Kitchen: Ohio Fix and Flip

Before and After Kitchen 2

Before and After Living Room

Before and After Ohio Fix and Flip: Bathroom

Before and After Bedroom

Ready to chat about your next real estate project? Great, our team is here to help.

We’re a Colorado-based lender who lends money on all types of commercial/value-add properties. So, whether you want to invest in fix and flips, rentals, land, or wholetailing, we can discuss your funding options. We even offer bridge loans for those who need to close a financial gap.

Happy investing!

How to Buy a Value-Add Property with No Money Down in 4 Steps

How to Buy a Value-Add Property with No Money Down in 4 Steps

How to Buy a Value-Add Property with No Money Down in 4 Steps

Do you know how to buy a value-add property with no money down?

Because, believe it or not, it only takes 4 steps.

Let’s take a closer look at these 4 steps:

#1: Buying discounted properties

It’s pretty rare to find a discounted property on the MLS. You’d have far better luck finding cheap deals through a wholesaler or investor-friendly realtor. And buying a discounted property is very important to making a profit. If you pay full retail value…well, you’ll make far less. In fact, you might not make any money at all.

#2: Setting up a loan properly.

When you want to buy a value-add property like a rental, then you should consider our 2-Step Process. Because it’ll save you a lot of time, money, and stress.

What is the 2-Step Process?

Well, it’s strategic funding method. The first step is buying a property with a hard money loan. The second step is turning around and quickly refinancing with a long-term loan. When you do this, you’re able to qualify for the highest loan amount possible. Plus, you have a much better chance of getting out of a hard money loan fast and into a cheaper traditional loan.

#3: Use rate and term, NOT cash out.

Take a deep breath.

And don’t panic, because we’re not going to dive deep into these hefty mortgage terms. But we are going to highlight the significant differences.

It can be really tempting to set up your loans as cash outs, because you get money at closing. But did you know when you use a cash out loan, you end up:

  • Paying higher costs
  • Taking longer to refinance out of hard money loans (which come with pricy rates)
  • Qualifying for lower loan amounts

Doesn’t sound so good anymore, does it?

So, let’s talk about the benefits of a rate and term refinance instead. With a rate and term, you:

  • Spend less money upfront
  • Refinance faster out of hard money loans. Like, months faster than a cash out refinance.
  • Enjoy lower rates

Better yet, when you use a rate and term refinance, your cash flow will multiply because you get to do more with your money when you pay less for your loans.

This is actually a simple process if you work with someone who can help you with both your hard money and long-term loans, like our sister company the Cash Flow Mortgage Company.

#4: Put $0 down by finding the right lender

The last and most important step is to find a lender who can handle 2-Step loans.

The truth is, there aren’t many real estate lenders out there who are qualified to provide both hard money and conventional loans. That’s why we do.

So if you’re ready to take your real estate investments to the next level and put less money down on your deals, then reach out to our team. We’re always eager to set you on a path the 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.

Yikes.

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!

The Quick Deal Analyzer

The Quick Deal Analyzer: How to Guarantee Positive Cash Flow

The Quick Deal Analyzer: How to Guarantee Positive Cash Flow

Have you heard of the Quick Deal Analyzer?

Because it’s an excellent tool to use BEFORE you buy a real estate property. Quick Deal Analyzer

The Quick Deal Analyzer helps real estate investors decide if a property is worth their time, money, and effort.

It’s an easy-to-use tool that allows you to quickly evaluate a fix and flip, rental, or another value-add property to see where the numbers land. Because, why bother negotiating with a seller, finding a lender, closing a deal, and renovating if the numbers don’t make sense from the start?

Why bother with all of that work if you’ll end up making little to nothing?

Quick Deal Analyzer

The Quick Deal Analyzer also lists some important questions that will, again, impact your cash flow and profits.

For example, how many months will it take to complete the project? The longer a project takes, the less money you’ll see in your pocket. Because you won’t be collecting rent or selling the property. Instead, you’ll be making payments to your lender and contractor.

Just remember, the Quick Deal Analyzer only works if you answer everything as honestly and accurately as possible. If you fudge the numbers or make false assumptions about your timeline and costs, then the profits you expect won’t be there when you go to rent or sell.

If you utilize this financial tool as you search for real estate deals, then you should be able to decide if you should walk away and find a different property. Or if you should stick with it and walk away with the kind of money you were looking to make.

Are you ready to try the Quick Deal Analyzer? Great! It’s here to download at any time. We also have other real estate investment tools you can download, like our Loan Optimizer. Because our main goal is to help you succeed and start living the life you’ve always wanted.

If you need help with the analyzer, or would like to run through your numbers with our team of experts, then reach out to us. We’re always happy to help!

Happy investing.

Wisdom Wednesday!

Tips To Evaluate A Property

13