Tag Archive for: real estate

Get Ready for Real Estate Opportunities in 2024

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Real estate opportunities are coming in 2024, and we want you to be ready!

The stats are clear: it’s a great time to be a real estate investor. So how can you prepare your money to take advantage of the market?

Let’s start with looking at why this opportunity is coming and how it’s leading to a beneficial market for investors. Then we’ll dive into what you can do to be prepared.

Rising Debt Levels and Stress

Rates are rising, and with that, consumer debt, credit cards, and student loans have also increased. According to the Fed, they’ve all hit a new high at $17 trillion in consumer debt. 

With more debt out there (and higher balances), consumers are under more stress as banks look for even higher credit scores. Because of this, even though home prices are stabilizing—potentially even going down—a lot of people can’t tap into that equity.

Implications for Real Estate Investors

This might sound like bad news. However, if you’re a real estate investor who’s prepared for these changes, this is going to create some real opportunities in the near future!

As consumers credit cards, rates, payments, and stress rise, a lot of people are going to be vacating their properties. 

We can help those people who are in need of relief to take over properties and create the generational wealth and the mailbox income they need.

We didn’t create the problems these people are facing. But through smart investment and coming alongside new investors, we can turn the situation around.

Key Statistics to Understand the Opportunities

Consumer Debt: We already mentioned the $17 trillion in consumer debt.

Credit Card Delinquency: According to the Fed, over the past six quarters, we’ve seen a rise in credit card delinquencies. While the numbers aren’t astronomical, they are rising. If rates keep going up, we’re going to start seeing more defaults.

Mortgage Delinquency: Credit cards will also stress people’s money which can trickle into mortgage delinquencies. Although mortgage delinquencies haven’t shot up yet, we can expect a boomerang effect in about six months because of the rising rates of consumer debt. 

How Does This Affect Consumers?

Let’s look at an example.

Let’s say a year and a half ago, someone had a credit card balance of $10,000. Interest rates were low. We’ll say they had a 14% interest rate, and they maintained that $10,000 balance throughout the year. So that would mean they have about a $1,400 payment of interest to the credit cards over that time, or just a little over a hundred dollars each month. 

Today, interest rates and balances have gone up, while credit scores have gone down. 

Now, for the same consumer, interest rates are likely to be closer to 29%. Instead of paying $1,400 for the year, that rate has more than doubled at $2,900 or just under $250 a month. 

Those numbers are pretty small in comparison to what a lot of consumers are facing: $30,000-$50,000 in credit card debt, car payments, student loans.

Additionally, most people’s income isn’t rising as fast as their interest payments. 

This Creates Real Estate Opportunities… If You’re Prepared!

If real estate investors take these signs seriously, there’s a huge opportunity for business. But you have to start getting your money in line now.

1. Find hard money.

Hard money is extremely versatile. Because of this, it’s great for when you need to make quick deals or close in days instead of weeks. 

Hard money can also offer a higher loan to value which is perfect for the market we’re looking at in 2024. If you want to learn more about hard money, check out our recent post on all the different things you can do with hard money.

2. Raise your credit score.

In order to take advantage of the coming opportunities, you need to make sure your credit score is in line. 

Lenders aren’t always going to cover everything, so you need credit cards in your money bucket to cover those other expenses.

3. Fill your money bucket.

Where does that money for your money bucket come from? 

There are a few ways to fill your money bucket. One of the most important ways to make sure you have funds is to use business credit cards whenever possible. By separating your personal credit from your business credit, you protect your credit score and can keep it higher. 

If you need help settling personal credit cards to fix your score, our sister company The Cashflow Company can help with that. 

In addition to credit, you can fill your money bucket with HELOCs, other lines of credit, or other people’s money. Getting friends and family to invest in your projects often gives them a better return. It also ensures you have the funds to work with while your lenders are still determining your approval.

4. Partner with a reliable lending company.

Companies like us work really well with these types of real estate opportunities. With hard money, you’re able to take advantage of these moments because you won’t have to wait for slower lenders. 

Similarly, if you’re in a rural area or smaller town, you might have trouble finding a good deal with Wall Street-type lenders. Large lenders often add additional rules and regulations to rural areas, whereas hard money is flexible no matter who or where you are. 

It’s important to find the right lender for your project.

If it’s unique and you’re looking to close quickly, look at hard money loans. Hard money is going to be more important in the coming real estate wave than ever before.

Don’t Miss Your Opportunity!

In the next year, look out for real estate opportunities. This is your chance to create that generational wealth that can change everything. 

Our whole goal here is to make sure you’re successful. 

We have tons of free tools on our website, so make sure you check those out as you’re preparing for 2024. They’re free and easy to use!

Again, if you have questions about the next wave of real estate investing or want to see if a hard money loan is right for you, send us a message at Info@HardMoneyMike.com.

Happy Investing.

What Can You Do With A Hard Money Loan?

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Hard money is so versatile! Understanding how much you can do with a hard money loan can open doors for your projects.

As long as the deal you’re looking for is backed by real estate for investment or business purposes, hard money is one of the most flexible options out there.

Unlike a lot of other options, hard money lenders aren’t confined by the same restrictions as traditional loans. This means you can use hard money for a wider variety of real estate investment projects.

Fix and Flip Hard Money Loans

Hard money loans work exceptionally well for fix and flip projects. Here at Hard Money Mike, we specialize in hard money loans for fix and flips. 

Hard money loans can often be specialized for your individual project which makes them ideal for real estate investing and renovations. 

Similarly, if you’re looking to renovate and rent (instead of sell), you can look for a hard money loan to help cover the cost of rennovations.

Gap Funding with Hard Money

Gap funding is a term used for a variety of loans that cover the “gaps” in a larger loan. This is often simple to find through hard money loans, provided there’s good equity in the deal.

One type of gap funding is bridge loans. If you need temporary financing or are looking to buy one property before selling the other, look for bridge loans from hard money lenders.

Similarly, gap funding also covers usage loans. With usage loans, lenders pay off the investor’s credit cards which helps their credit score go up. This lets real estate investors get the funding they need to focus on their project.

We also strongly encourage our investors to have a separate business credit card to keep their scores high.

Project Completion Loans

If a property is sitting stale or taking too long to get money out of escrow, hard money loans can play a huge role in project completion. 

The faster you complete your project, the lower your overall project cost. Also, the better chance you have of hitting a good selling window in the market.

Land Purchase and Development

The flexibility of hard money can work well for investors and business owners who want to buy property to develop. While big companies are often less interested in rural areas, hard money lending doesn’t have those same hang-ups.

Additionally, because hard money lenders can adjust for the client’s needs, it’s easier for you to buy large plots of land to later split into multiple parcels. It’s also easier to use that money for things like modular home development.

A good hard money lender will be able to help you get money in order to purchase and begin development quickly.

Hard Money Loans for Business Needs

You can use a hard money to buy out a partner who owns real estate or to expand their business by buying equipment or other needs. 

If you’re a business owner, you also might be able to use a hard money loan to cover payroll expenses thanks to its flexibility. So long as some level of real estate is involved, hard money lenders are able to support.

First Time Investors or Poor Credit Scores

If you’re a first time investor looking for a good deal, hard money is likely the way to go. 

Depending on how good the deal is, hard money lenders will sometimes give up to 90% to 100% even if your credit score is less than 600.

Hard money lenders are able to be more understanding regarding credit scores and are often more willing to lend to people with lower scores. This in turn really helps out newer investors who are trying to build capital.

Unlike large Wall Street-type companies, hard money lenders care more about the loan to value and the property’s value.

Hard Money for Unique Projects and Situations

Hard money is ideal for unique situations and real deals that can make investors money. 

If you find yourself stalled in the middle of a project and pressed for money, hard money lenders are flexible. Even in the middle of a mess, a good lender will try to help you find a solution.

Refinancing during a project can be tricky, but it’s significantly easier with hard money.

Similarly, strange situations happen all the time that can leave investors high and dry. If a bank is bought out and your loan is due when you’re not ready, hard money loans can bail you out.

Hard money also works well for mixed use commercial projects. 

Wholetail and Transactional Deals with Hard Money

If you’re looking for a short term wholetail deal, hard money works well. Hard money can even work for loans as short as 30 or 60 days. 

Transactional deals refer to when you’ve found an amazing deal and you plan on buying and selling within a week.

Hard money is perfect for those kinds of deals because they often have a higher loan to value than private lenders like.

The Benefits of Being Outside the Box

Hard money lenders don’t have a box we need to fit into which lets us help you out in a wide range of situations. 

Especially in 2023, banks are walking away from certain deals which makes hard money even more important.

If you’re interested in looking at more traditional loans, check out The Cash Flow Company. However, if your project is outside of the box, hard money might be the way to go.

If you have questions or want to talk about your project, contact us at Info@HardMoneyMike.com.

You can also check us out on our YouTube channel.

Happy Investing.

5 Ways to Make Money in a Volatile Market

5 Ways to Make Money in a Volatile Market

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5 Ways to Make Money in a Volatile Market

Check out our latest Market Watch videos here: https://youtube.com/playlist?list=PLb…

The current market is going CRAZY with increasing interest rates, rising inflation, and supply chain issues. As a real estate investor, how can you prosper in these times? In this video, we share 5 ways to make money in a volatile market. Check it out! STAY CONNECTED ========================

 

Why Realtors Make Good Team Members

Why Realtors Make Good Team Members

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Why Realtors Make Good Team Members

If you want to make the most money on your real estate deals, then you need to create a solid team.

And some excellent members to add to your team are investor-friendly realtors.

But, why do realtors make such great team members for real estate investors?

Well, first of all, they have a constant pulse on the market.

They know what’s happening, where it’s happening, and how it’s happening.

Second, discounted properties also tend to fall into their laps, and they can pass those properties on to you.

So, what type of realtor should you work with?

Well, they should do more than put you on their MLS drip. Any realtor can do this, and nowadays, many of the properties on the MLS get listed on sites like Redfin and Zillow.

So, getting on an MLS drip won’t help investors much…especially when we’re looking for under-market properties. And under-market properties aren’t found on the MLS often. The right kind of realtor will have a lot more hustle. They’ll actually search for under market properties and then go through the numbers to decide it’s worth investing in before they present it to you.

Better yet, investor-friendly realtors connect with professionals in various industries, like bankruptcy attorneys. That way, when investment properties pop up, they’ll be one of the first to know about it. And then tell you about it, rather than making you wait to—hopefully—see it on the MLS weeks or months later.

Most importantly, the right realtor will LOVE working with investors.

Unfortunately, about 95% of the realtors do NOT like working with investors. Or, if they do, it’s part-time and not a high priority for them. These are usually more experienced realtors who have an established client list. They don’t really need your business to make money. They already have a system in place.

But, when you find realtors who are investor-friendly, you’ll know. You won’t be a side gig or a part-time project for them. They’ll be hungry to help you find investment properties and make a lot of money.

Many times, these are newer agents who are willing to be trained. They’ll be the ones looking for business and finding ways to make money with you, not off of you. So, rather than selling 3-5 properties a year, they want to sell an investment property every month.

Now, is it a bad idea to team up with both experienced and new realtors?

Not at all.

In fact, it’s a great idea to work with multiple realtors, because they all have different resources, experiences, and ideas. Plus, if one moves away or quits their job, you don’t need to worry about losing your main resource for finding properties. You’ll have others to fill in the gap.

If you want to create a smooth, easy system with your investment properties, then adding a realtor or two…or three…to your team is an excellent idea. Just make sure they like working with investors and are hungry to make money. The hungrier, the better for both of you!

Happy investing!

How to Make Money Bird Dogging

How to Make Money Bird Dogging

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How to Make Money Bird Dogging

Do you know how to make money bird dogging?

So, let’s say you’re eager to start investing in real estate, but you’re not quite ready to fix and flip or BRRRR. It’s just too big of a commitment or too much of a risk. Or both.

No problem.

You can still make money in real estate with a simple, but effective method called bird dogging.

What is bird dogging?

Basically, it’s driving for dollars. You hop in your car and drive around the neighborhood, city, or entire state and look for potential investment properties. You can even put on your best walking shoes and take a jaunt around your own neighborhood.

So, what does an investment property look like? Well, you should be able to tell it hasn’t been maintained. The paint is chipped, the windows are broken, the lawn overgrown, and so on. Or it’s vacant. Or there’s just something else is wrong with it that makes you think it can be sold at a discounted price.

Then, you collect information about the property. That means you can knock on the door and chat with the owner, take photos, and/or jot down the address. Once you do one or all these things, you can share it with potential buyers.

Buyers are usually wholesalers, investor-friendly realtors, flippers, or other real estate investors. They take the information you provide and follow-up with the owner to see if they’re actually interested in selling their property.

Essentially, you become the eyes and ears of the market.

So, what are some of the biggest benefits of bird dogging?

  • First off, it’s great for beginners who want to learn more about real estate investing. Maybe you’re not ready to flip or rent homes now, but you want to in the future. Bird dogging is a great introduction to both.
  • Unlike flipping and renting, bird dogging also doesn’t require any money to start. You don’t need to worry about classes, training, loans, or anything else that requires cash out of your own pocket.
  • Bird dogging is also something you can do when you have the time. So, it’s easy to fit into your schedule, be it during your lunch break, after you drop off the kids at school, or during your Sunday stroll. Really, whenever works for you!
  • Better yet, bird dogging can create multiple streams of income. You can make money when you find an investment property, when a wholesaler or realtor sells it to a flipper, and—if it’s a flipper—when they sell it after renovating it.

So, there you have it! Bird dogging is something you can do whenever and wherever. Just hop in your car or put on your shoes and go exploring. Find those properties that are in disrepair and share them with buyers.

How to Buy: Breaking Down BRRRR

How to Buy: Breaking Down BRRRR

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How to Buy: Breaking Down BRRRR

So, you’ve heard about the BRRRR method. You know it stands for Buy, Rehab, Rent, Refinance, and Repeat.

But do you know what each of these steps in the BRRRR method really mean? More importantly, do you know how to set each one up?

Because if you don’t, your success will be limited. Because you won’t be able to make as much money as you could by doing things right. Your monthly cash flow will be lower, your down payments will be higher…a lot higher…And your ability to repeat the process will much…much… slower.

So, let’s break things down, starting with the B in BRRRR.

As mentioned, the B in BRRRR stands for Buy.

But wait! Before you run out and buy the first property you find for sale, you need to know a few important—er, VERY important things. Because the B in BRRRR is one of the most crucial steps in the entire process. If you don’t buy strategically, then you might set yourself up for failure.

First you need to find under market properties that you can add value to.

Under market properties are not found on the MLS. They’re usually found through wholesalers and investor-friendly realtors. And they come at a nice, discounted price.

Just taking this step will do wonders for your wallet.

But it’s not the only thing.

You also need to work with the right lenders.

With BRRRR, there are two lenders involved. The first is for purchasing and renovating the property. The second is for refinancing into a cheaper, long-term loan.

For now, let’s focus on the first lender, for when you BUY the property.

Typically, this is a hard money or private lender. It’s not a bank or another traditional lender. Because those lenders usually require 10, 15, or even 20% down when you go to close. And, if you want the most bang for your buck, you should aim to put 0% down at closing. Because once you put money into a deal, it’s difficult to get it back out.

Hard money and private lenders can help you achieve this.

How? Because they let you maximize your LTV (loan-to-value) by lending up to 75% of the ARV (after repair value).

Ok, deep breath! We get it. This is starting to sound too complicated and confusing.

But trust us, it’s not. Just stick with it. You got this!

The right lender will give you a loan that is 75% of your ARV.

That means they will try to cover the full purchase price, plus part or all the rehab, closing, and holding costs. Basically, they will cover as much as the 75% allows so you don’t have to spend your own money.

And the less money you personally have to put into each deal, the faster you can repeat the BRRRR method. Because you’re not forced to wait until your bank account recovers to make another big down payment on another property.

Aiming for 75% of the ARV will also make a big impact on your refinance (the third R in the BRRRR method). But we’ll get to that later. Let’s stay focused on the B in BRRRR.

If you’re interested in trying the BRRRR Method, then it’s crucial you understand this first part of the process. If you buy an under-market property AND find a lender who can cover 75% of the ARV, then your success rate will be much, much higher. And your bank account will be a whole lot happier.

Happy investing!

3 Problems That Cause BRRRR Confusion

3 Problems That Cause BRRRR Confusion

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3 Problems That Cause BRRRR Confusion

Today, let’s talk about three big problems that cause many investors to experience BRRRR confusion.

Have you been thinking about investing in real estate using the BRRRR method? But you’ve hit a roadblock?

Unfortunately, you’re not alone.

A lot of real estate investors, both new AND seasoned, have heard about BRRRR, but haven’t used it.

Because they’re confused.

They’re confused about how to buy, rehab, rent, refinance…or all of the above.

So, to help unravel and debunk some of your confusion, let’s address some of the biggest questions we hear from our own clients about the BRRRR method.

#1: Is BRRRR real?

Yes. BRRRR is real.

There’s a reason why our team created this video for you. We’ve helped many clients succeed using the BRRRR method. But, just like you, many of those clients started their journey confused. Because they didn’t understand the entire process either.

And what they did understand wasn’t always accurate or true. Because they were working with bankers, lenders, or realtors who fed them misinformation or were simply out of the BRRRR loop.

#2: “Can you really find properties that work for BRRRR?”

Again, yes. Absolutely.

Even in our current, competitive market, there are properties that work perfectly for the BRRRR method. The trick is to find the right area to invest in. That might mean leaving your own town, city, or even state to find properties that produce solid cash flow.

And, trust us, those areas exist.

You can start your search by talking to wholesalers, investor-friendly realtors, or even other investors to see where they’re buying properties.

Of course, searching for cash flowing properties requires some time, effort, and patience.  But, if you think about it, all you’re doing is looking for one to four properties a year. Don’t you think it’s worth a little work to change your financial future? We think so.

#3: “How much money do I need to make BRRRR work?”

This is possibly the most crucial question we get. Not only is it a crucial question, but it also leads to the most confusion. Because it involves math, and most people don’t like math.

It also involves financing chit-chat, and again, a lot of investors don’t like talking about financing…even though the entire BRRRR process relies on good, solid numbers with good, solid loans.

But here’s the thing: once you grasp how to properly set up your BRRRR deal, then you can spend little to zero dollars on your properties.

Now, unfortunately, most investors don’t believe this, because, yet again, they’ve been fed misinformation by lenders, realtors, or other investors. So many people believe that have to bring a big down payment to closing.

And that’s because cash-out refinancing has been promoted as part of the BRRRR method. This isn’t a lucrative strategy. Not when there are other types of refinances that allow you to put little to no money in your deals.

The BRRRR method is an excellent real estate investment strategy. And, yes, it can be confusing when you get started. Because there’s a lot of chatter and misinformation flying around. Plus, nobody really likes math or financing. It’s true.

But if you’re willing to learn and do some work, then it’ll become easy. Very easy! And, better yet, lucrative. Because if done correctly, the BRRRR method can be repeated as many times as you want, as quickly as you want. Which means you’ll able to make the kind of money you want.

Happy investing!

What You Can Be Thankful For as a Real Estate Investor

What You Can Be Thankful For as a Real Estate Investor

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What You Can Be Thankful For as a Real Estate Investor

If you’re thinking about fixing and flipping or fixing and renting properties, then there are a few things you can look forward to being thankful for.

https://youtu.be/LDrF5Bs_JLs

Money

First, the most obvious, you can make quite a bit of money in the fix and flip and fix and rental game. As long as you understand how to properly find, value, and buy properties, then you can expect some excellent pay days in your future.

Cash flow

Second, you can take the money you make and boost your cash flow. And that extra cash flow means you can start living the kind of live you’ve always dream of. That means quitting your day job, taking more vacations, saving up for a more comfortable retirement, or doing whatever  else it is that would make your life better.

Community

Third (and the least thought about) you can make an extremely positive impact on your community.

Without real estate investors, communities would slowly deteriorate and eventually fall into disarray.

Think about the HGTV show, Good Bones. A mother and daughter team up to fix homes that have aged and withered throughout their neighborhood. But, home by home, they’ve revitalized and given their community new life. They’ve given it value, once again.

That’s what all fix and flippers do.

They find neighborhoods, towns, and cities that have fallen into disrepair, and breathe fresh life into them. By doing this, they revive the economy because people want to live there again. Schools, safety, and quality of life rise drastically.

But the only way this can all happen is if real estate investors continue tackling fixer uppers.

So, as you can see, real estate investing is something you can truly be thankful for. It’s a way to boost your cash flow and help your community.

Happy investing!  And happy Thanksgiving from our team to you and your family.

What is a value add property

What is a Value Add Property?

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If you’re a real estate investor, then it’s likely you’ve heard the term value-add property.

But what IS a value-add property?

https://youtu.be/CMPAhNeOddo

Well, first of all, a value-add property means exactly like what it sounds like: a property that has value added to it.

Well, you add value to it by repairing it.

Think about a fix and flip or a fix and hold (aka, a rental property).

What is a Value Add Property

When you come across these pieces of real estate, you’ll quickly discover they’re not in marketable, sellable condition. They need work.

Some need A LOT of work.

So, let’s break things down a bit more.

Step one:

You buy a property that’s in some kind of disrepair…or simply outdated.

Then you spend some money to fix it up. This can be a lot of money because you have to do things like repair the roof, replace the plumbing, demo the kitchen, and other hefty tasks.

Or you only need to spend a little to tidy things up and make it appealing to future buyers or tenants. That includes replacing old carpet, adding fresh paint, and providing other cosmetic work.

Either way, you’re adding VALUE to the property.

Step two:

Once you do that, you can turn around and sell it for a profit or rent it for positive monthly cash flow.

And that’s basically it. It’s a fairly simple term to understand.

What you need to understand even more is how to evaluate a property to ensure you’re able to add value AND make a profit.

Need help with that? No problem. You can check out our other videos on our YouTube channel to learn more. Or you can directly reach out to our team for guidance and tips.

Because we’re always eager to set you on a path that helps you make the kind of money you need, to live the life you want.

Happy investing!

Flip-It, Prof-It Contractor Partnership Program

Weekly Chat: Flip-It, Pro-Fit Contractor Partnership Program

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Weekly Chat: Flip-It, Pro-Fit Contractor Partnership Program

Are you a contractor? Good, because we want you to make more money doing what you love.

That’s why we’ve created the Flip-It, Pro-Fit Contractor Partnership Program.

Join us (online) next week to learn more about this special program that’s ONLY for contractors.

Flip-It, Pro-Fit Contractor Partnership Program

We fund. You flip.

The Flip-It, Prof-It program is easy. We’re looking to partner with contractors who want to stop doing work for flippers and start doing work for themselves. 

We’ll handle all the funding and paperwork, and you’ll handle the renovations.

It’s as simple as that. 

Hit the easy button.

When you partner with us, you don’t need to sweat the “business” side of the deal. Instead, you can do your work and enjoy:

  • Less paperwork
  • More Money
  • No payments
  • Help creating a “bank worthy” portfolio

In a nutshell, you do not need to worry about the business side of the deal. We’ll take care of that while you take care of the house.

Some basic qualifications.

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

If you can say yes to those, then tune into our free chat to learn more about the Flip-It, Pro-Fit Contractor Partnership Program?

You may register for FREE here.

Again, here’s when and where the chat will take place:

When: Wednesday, September 29th, 6 PM MST

Where: Virtual nationwide.

Register for free at https://my.demio.com/ref/lw8s3Krd8n4vKXqo

Mike and the rest of the Hard Money Mike team looks forward to seeing you on Wednesday! Because we want you to make the kind of money you need to live the life you want.

If you have any questions about the program, our team is here to answer them any time.

Happy investing!