Tag Archive for: Real estate investing

Money Chat Reminder: How to Fund a Flip

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Money Chat Reminder: How to Fund a Flip from a Lending Expert

Attention real estate investors, both new and seasoned! Don’t forget our next Money Chat is tomorrow with lending expert, Mike Bonn.

During Tuesday’s chat, Mike will answer all of your questions on How to Fund a Flip.

If you’ve always wanted to get into the fix and flip game, but don’t know where to start when it comes to buying properties, then this Money Chat is perfect for you!

This is your chance to join other like-minded real estate investors and ask all of your questions to a lending professional.

Money Chat Reminder: How to Fund a Flip

If you’d like to join Mike’s Money Chat tomorrow, then you can register for FREE here.

During the virtual call, Mike will answer common questions like:

  • What are my funding options?
  • What is hard money?
  • How do I qualify? What credit score do I need? Income? Experience?

By the end of the Money Chat, you should have a much better grasp of how to get going in real estate investing…and how to pay for your properties.

Can’t make it to tomorrow’s chat? No problem, because we’re running another Money Chat on Thursday. That way you have an opportunity to listen, learn, and ask all of your questions on how to fund a flip (and any other value-add property).

And if you miss both Money Chat, no sweat. We’ll be hosting many more in the future. Plus, our team is always here to assist you.

So, mark your calendar!

When?

Tomorrow at 6 PM MST

Where?

Virtual nationwide.

Register for free at my.demio.com/ref/1j9cO1wJ3Co6QkW1

Mike and the rest of the Hard Money Mike/Cash Flow Mortgage Company team looks forward to seeing you on Tuesday or Thursday (or both).

If you have any questions about our weekly Money Chats, then our team is here to answer them any time.

Happy investing!

Next Money Chat: How to Fund a Flip

Next Money Chat: How to Fund a Flip

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Next Money Chat: How to Fund a Flip

During our next Money Chat, lending expert Mike Bonn will discuss “How to Fund a Flip.”

If you’ve always wanted to get into the fix and flip game, but don’t know where to start when it comes to buying properties, then this Money Chat is perfect for you!

You can join other like-minded real estate investors and ask all of your questions to a lending expert.

How to Fund a Flip

Want to join Mike’s Money Chat? Then register for FREE here.

Mike will answer common questions like:

  • What are my funding options?
  • What is hard money?
  • How do I qualify? What credit score do I need? Income? Experience?

By the end of the Money Chat, you should have a much better grasp of how to get going in real estate investing.

Can’t make it? No problem. We’re running the Money Chat twice next week to make sure you have an opportunity to listen, learn, and ask all of your questions on how to fund a flip (and any other value-add property). And if you miss next week’s chat, no sweat. We’ll be hosting many more in the future.

So, mark your calendar!

When?

Tuesday, August 31 @ 6 PM MST

OR

Thursday, September 2 @ 11 AM

Where?

Virtual nationwide.

Register for free at my.demio.com/ref/1j9cO1wJ3Co6QkW1

Mike and the rest of the Hard Money Mike/Cash Flow Mortgage Company team looks forward to seeing you on Tuesday or Thursday (or both).

If you have any questions about our weekly Money Chats, then our team is here to answer them any time.

Happy investing!

The Cost of Credit: How Much Is Your Score Costing You?

The Cost of Credit: How Much Is Your Score Costing You?

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The Cost of Credit: How Much Is Your Score Costing You?

Do you know the cost of credit and how much your score is costing you?

Well, it could be adding 10+ years of extra payments to your life.

Yep, you heard that right. Ten or more years worth of payments! That could be as much as $500,000 you don’t need to pay, and all because you don’t have an ideal credit score.

That’s why today we’re going to dive into the impact your credit score has on your real estate deals…and your wallet.

If you don’t fit into a standard loan’s very strict (and small) box, then it can cost you dearly.

So, why does this happen?

Because there are many kinds of loans, but the ones with the best rates and terms are Conventional (aka, “standard”). If you can’t qualify for these affordable loans, then your costs jump considerably when you move to Non-QM (aka, “non-standard) loans.

Right now, in this market, the difference between a standard and a non-standard loan is 2 to 3 points.

That’s thousands of dollars. 

In the video above, we compare two investors who have different loans with different rates. Even though they both paid the same amount for a property, the outcome of what they pay might surprise you…especially when they start buying multiple properties.

Investor 1 pays a lower rate than Investor 2.

So, let’s breakdown their payments based on a loan amount of $200,000…

Every month, Investor 1 pays $954.83 for their property. Meanwhile, Investor 2 pays $1,264.14. That’s about $310 more than Investor 1 per month.

Now, let’s take that another step further:

Both investors eventually purchase 5 properties to add to their real estate portfolio. The difference in their total payments is about $1,500 per month (yikes).

If we take that number and look at what happens every year, Investor 2 will pay about $18,500 more than Investor 1. All because their credit score was too low to get a loan with affordable rates.

And here’s where you can see the biggest impact: Over the life of the loan (about 30 years), Investor 2 will pay over half a million dollars more than Investor 1.

Now you can see why your credit score matters.

How can you make sure you pay cheaper rates and qualify for standard loans? Well, check out some of our helpful tips on Youtube. Plus, our team is always here to help.

Happy investing!

Client Review: Gilberto A.

Client Review Spotlight: Gilberto A.

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Client Review Spotlight: Gilberto A.

Check out this client review from Gilberto A.

At Hard Money Mike, our number one goal is to make clients happy…and a lot of money!

We understand every real estate investor has different goals, hopes, and dreams. They also have a different story, which means they come into each loan with a different situation.

Because of that, we work hard to adapt, listen, and create a unique plan for each and every client.

In today’s client review spotlight, we take a closer look at what Gilberto A. had to say about his experience working with our team…

If you’re ready to chat about your next real estate deal, then reach out to our team. They’re eager to help you develop a plan that sets on a path to success.

Because Hard Money Mike isn’t just the place to start investing. It’s the place to start living your dreams.

Happy investing!

Low Credit Score: A Quick, Easy Solution

Low Credit Score: A Quick, Easy Solution

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Low Credit Score: A Quick, Easy Solution

Do you have a low credit score? If you do, then it’s likely making a big dent on your cash flow. Because a low score means paying higher rates. And higher rates mean less money in your pocket.

 

 

 

 

 

 

 

 

 

 

At Hard Money Mike, one of the main questions we hear from real estate investors is, “What credit score do I need to get a loan?” And when they hear the answer, many of those investors are unhappy about it.

Because they have a low score…too low for a traditional loan, at least. And traditional loans have some of the lowest interest rates available.

But, why is your credit score so low?

Well, there’s some common issues you probably already know about (ex: unpaid bills, late payments, etc.). But did you know one of the biggest issues is high credit card balances?

 

Yes, even if you pay some of your credit card off each month, as long as you maintain a high balance, then it’s going to ding your credit score.

For example, if you have a maximum credit line of $8,000, and you maintain a $6,000 balance, then creditors think you’re a high risk. Therefore, they penalize you by taking points off your credit score.

To make matters even more frustrating, many real estate investors have to use their credit cards to pay for renovations on a value-add property. Otherwise, their project might stall.

What can you do?

Well, technically, the best solution is to get a loan to pay off your credit cards.

But, if your score is too low, you won’t be able to get a loan.

AHHH!

Yeah, it can be a real conundrum. And we’ve seen it impact our clients countless times. So, here’s our suggestion:

Take your loan private.

Don’t go to a bank or another traditional lender. They will just reject your application. Instead, find someone (like Hard Money Mike) who can help you repair your credit score by setting up a private loan. That way you can:

  • Pay off your credit cards
  • Raise your score
  • Get an affordable loan AND rate

After you pay off your credit cards with a private loan, you can resume normal business. Just remember to keep your credit card balances as low as possible. In other words, don’t use more than 20-30% of your credit line. If you exceed that threshold, then quickly pay off what you can to drop it back down and protect your credit score.

Because a good credit score will lead to the best loan products. And the best loan products will produce the highest cash flow possible.

Happy investing!

Take Charge Tuesday: Numbers Game

Take Charge Tuesday: Numbers Game

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Take Charge Tuesday: Numbers Game

On this Take Charge Tuesday, we want to talk about the numbers game.

At Hard Money Mike, we say it all the time: Real estate investing is all about the numbers.

Because, if done correctly, numbers don’t lie.

But in order to use the “correct” numbers, you have to research and evaluate your real estate deals and loans. That means using honest comps, being honest with your renovation budget, knowing your market and its going rates, and researching lenders.

When it comes to real estate lenders, we always recommend shopping around. Because every lender varies with their points, rates, and…hidden junk fees.

Yes, hidden junk fees.

There are many lenders who promise amazing rates and points, but then sneak in extra costs throughout the process. For example, some lenders will charge you to take money out of your escrow account (your escrow account is where lenders hold back funds for renovations). That’s like your bank charging you to withdraw money from your savings account.

So, we always tell clients and prospects to be careful. Ask lenders what other fees might pop up along the way so you know EXACTLY how much money your loan will cost.

Because, again, it’s all about the numbers. And you can’t take charge and claim a hefty reward if you don’t do your due diligence and research both potential properties and lenders.

Ready to take charge of your real estate investments? Great! Our team is always here to help you crunch the numbers, evaluate real estate deals, and decide if a value-add property is worth your time, energy, and money.

Happy investing!

How To Make $250,000 with a Good Credit Score

How To Make $250,000 with a Good Credit Score

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How To Make $250,000 with a Good Credit Score

Did you know you can make $250,000 with a good credit score?

Yep, that’s right.

But, how?

Well, let’s pretend your credit score is fishing bait. If you have good bait, then you can catch something big and juicy. But if you have bad bait, then you’ll walk away from the pond with nothing but a sunburn and bug bites.

Yuck!

So, what creates a good credit score? Well, it depends on what you have in your tackle box.

A well-equipped tackle box includes:

  • Monthly bills that get paid on time
  • Credit cards with 30% (or lower) credit usage
  • And a diverse credit mix. That means you have multiple types of payments, like a house, a car, insurance, credit cards, etc.

When you have good bait in your tackle box (aka, a good credit score), then you can live the life you want. That means owning a house, a reliable car, a fat retirement account, and many–MANY–other things. The world is your oyster when you have good credit.

Because the higher your score, the lower your rates. And the lower your rates, the bigger your bank account.

In fact, if you have a 760 or higher score, then you can reel in an extra $250,000 by the time you retire.

But if you have a score under 650, then you’re going to have a tough time catching anything in life’s pond. Because lenders don’t like subpar credit scores. When they see your low score, they’ll reject your application or charge you expensive rates.

But don’t worry!

If you want to fish with the good stuff, then you just need to focus on raising your credit score. And it’s not all that hard to do so. It just takes a few quick, easy steps to boost your number. For example:

  • Pay your bills on time
  • Keep your credit usage under 30%
  • Get a loan to help you pay off your credit cards

Check out some of our other videos for credit score boosting tips.

Everyone deserves to own a shiny, well-equipped tackle box (er, credit score). If need advice or want to chat about yours, our team is here to help.

Happy investing!

What Is Bad Debt Versus Good Debt?

What Is Bad Debt Versus Good Debt?

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What Is Bad Versus Good Debt?

So, what is bad and good debt?

Well, before we jump into that, did you know there are two types? Because most of us were raised to believe ALL debt was bad.

But no. That’s not true. At all!

In fact, good debt is necessary to build your credit score. Without it, you can’t boost your FICO score and obtain low-rate loans for things like fix and flips, rentals, and other value-add properties.

So, now that you know there is such a thing a good debt, let’s look at the difference between the good kind and the bad kind…

As you can see in the image above, bad debt is essentially any kind of consumer good. It’s something that doesn’t create cash flow. So, think about your vacations, cars, TVs, clothing, etc. They’re fun to have but not helpful to your bank account.

Good debt, on the other hand, pays for itself AND generates a profit. The best example is a real estate property. If done right, you’ll gain equity on most of the properties you purchase. It can be instant equity (aka, a fix and flip) or long-term equity (your personal home that has a 15-30 year mortgage). But, as long as you pay your monthly mortgage, owning a home tends to be a great investment.

So, the next time you hear the word “debt,” don’t cringe. Instead, ask yourself, “Is this the kind I want?”

If it’s bad (because nobody can get through life without having some bad), stop and ask yourself this: “Is this something I need?” Or, more importantly, “How quickly can I remove this from my credit history?” In other words, how can you pay for it without using a credit card? Because as long as you pay your bills and maintain a healthy credit usage (under 30%), even bad debt can be okay.

It’s all about balance and healthy finances!

Have questions? No problem. Our team is always here to chat.

Happy investing!

How Your Credit Score Can Make You Thousands of Dollars

How to Make Money with Your Credit Score

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How to Make Money with Your Credit Score

Today, let’s chat about how to make money with your credit score.

Your credit score is kind of like a baseball game. With it, you can knock it out of the park and enjoy great success with your finances. Or you can strike out, and–well–lose (ouch).

 

When you “win” the credit score game, you win countless opportunities. These include:

  • The best interest rates
  • Affordable loans
  • And, in the end, hundreds of thousands of dollars.

Yes, you read that last one right. Hundreds of thousands of dollars. Because a good credit score means cheaper rates. Which means cheaper bills. Which means you save A LOT of money over the years.

Before we go on, let’s talk about what a “winning credit score” look like.

Winning Credit Score

Most lenders like to see scores in the 700’s or higher. Anything lower will likely lead to rejections and expensive rates.

But what if you have a score under 700? Nobody wants to walk up to the plate and strike out, right?

Well, let’s take a look at 3 strategies to help you prepare for this financial ballgame.

Increase Your Available Credit

Pick up the phone and call your credit card company so you can apply for a higher limit. Why? Because then it’ll be easier to keep your credit usage at or below 30%.

What do we mean by that? Well, let’s take a look.

If your credit card balance is $8,000 and you have a maximum credit line of $10,000, then creditors can see you’re using 80% of your available funds. Yikes! In their critical eyes, this means you’re a risk–a BIG one–and you might not be able to meet your financial obligations (i.e. you won’t be able to pay them back).

Not good.

Now, if your credit card balance is $3,000 and you have a maximum credit line of $10,000, then creditors see you’re only using 30% of your available funds. That’s much, much better. In fact, it could be a home run in the eyes of lenders.

Because when you manage your credit usage, creditors will think you’re financially responsible. AKA, you pay your bills. And that will lead to more loan approvals and lower rates.

Yay!

Pay Extra

A large chunk of your credit score revolves around your monthly reported balances to the credit bureaus.

So, it always helps to pay extra on your credit cards before your next statement. If you do this, the credit bureaus will be happy with you. Very happy! That means your score will rise.

Now, if those first two strategies don’t work for you, then you can always take a more creative third approach (one we’ve recommended to many clients).

Get a 60 to 90 Day Note

Basically, you can get a loan to pay down or pay off your credit cards. You can get one from a bank, a family member, a friend, or a private lender. This way you can keep your real estate projects moving along and your cash flow, well, flowing.

Make Money with Your Credit Score

If you take one, two, or all three of these steps to boosting your credit score, then you’ll have a much better chance of getting lower rates and generating thousands of dollars over time.

And if you play the game right, you can knock it out of the park and make hundreds of thousands of dollars!

Happy investing!

Investing in Real Estate with Zero Down

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

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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.