Tag Archive for: value add property

Wisdom Wednesday: What's a Good Investment

Wisdom Wednesday: What’s a Good Investment

On this Wisdom Wednesday, we want to focus on what a good investment looks like.

Because, the truth is, good investments are pretty simple. It all boils down to cash flow.

Good Investment

As long as you have more cash flowing in than flowing out, your investment is a good investment. ~Robert Kiyosaki

Yep, it’s really as simple as that. This concept might seem pretty obvious to most investors. Unfortunately, we’ve seen too many clients fail to evaluate their deals in a way to ensure they generate positive cash flow.

What are some of the most common mistakes we see? Here are just a few:

Fail to shop around for the right lender.

Maybe an investor gets comfortable using the same lender over and over again, or they only call one lender and decide to go with their product. Whatever the case, when real estate investors fail to shop around for the best loan with the best rates and terms, then their cash flow can take a major (and unexpected) hit.

Use their heart more than their head.

Too many investors fall in love with a property and refuse to accept it’s not a good investment once they crunch the numbers. Remember, this is a business. You’re not buying a house for you or your family. You’re buying an asset that’s intended to make you money. So try to use logic rather instead of emotion.

Calculate bad numbers.

Real estate investing comes down to numbers. Pure and simple. But when investors use the wrong numbers, then they use the wrong math. And the wrong math means big consequences for their cash flow. Some common missteps with math include inaccurate comps, underestimated renovation budgets, and hidden lender junk fees. (If a lender promises amazing rates and terms, then it’s probably too good to be true. Ask them about additional fees after closing. For example, will they charge you to withdraw money from your escrow account?)

Those are just a few of the common mistakes new and seasoned real estate investors make. And those mistakes can make a dent in their cash flow. So, their good investment is suddenly not-so-good.

Ready to talk about your next deal to ensure it’s a good investment? Great, our team is always here to chat.

Happy investing!

Money Chat Encore: How to Fund a Flip

Money Chat Encore: How to Fund a Flip

Money Chat Encore: How to Fund a Flip

Attention real estate investors, both new and seasoned! Did you miss Tuesday’s Money Chat with lending expert, Mike Bonn?

It’s okay, because Mike will be hosting an encore Money Chat tomorrow, Thursday, September 2nd at 11 a.m.

During tomorrow’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 Encore: 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. Let us know and we’ll set up more Money Chats on how to fund a flip. Or you can reach out to our team and schedule a time for one-on-one call. That way you have an opportunity to ask all of your questions on how to fund a flip (and any other value-add property).

But, better to tune in tomorrow to listen in with other like-minded investors.

When?

Tomorrow at 11 AM 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 tomorrow!

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

Happy investing!

How to Make More Money in Real Estate

How to Make More Money in Real Estate: Funding Tips

How to Make More Money in Real Estate: Funding Tips

Do you often wonder how you can make more money with your real estate investments?

Well, when it comes to investing in value-add properties (aka, rentals, fix and flips, etc.) the best way to generate positive cash flow is to focus on the numbers. 

What does that really mean?

It means taking the time to understand your funding options. Because all investors are different. They have different goals, different qualifications, and different strengths and weaknesses.

But all real estate investors also share a few similarities:

  • They’re in the business to make money.
  • They’re constantly searching for a GREAT deal.
  • And they have access to multiple lenders.

Let’s take a closer look at that last similarity, because it’s where the numbers make ALL the difference.

Real estate investors can get funding from a variety of sources. Just look at this “lending staircase”…

Did you know you have 5 different ways to get funding for your value-add deals?

You don’t have to break your back to qualify for a bank loan (the strictest lender you’ll likely come across). And you definitely don’t have to push pause on your investment dreams. You can always get started with a money partner (aka, a family member, friend, or business partner).

Money partners might be unpredictable and dip deeper into your profits than other lenders, but at least they can help you get moving. And if you get moving, you can also start building your real estate portfolio. And that’s key. Because experience will launch you up the lending staircase to other loan options.

Like hard money.

Hard money is great for closing deals FAST. We’re talking lightning speed compared to other lenders. But, it is on the pricier side. That’s why most investors should only plan on getting a hard money loan for 3-6 months. Any longer and it’ll eat away at your profits.

But the further you move up the lending staircase, the less that will happen. Hence, you’ll be able to make more money on your real estate deals, because you’ll be able to obtain cheaper loan products.

So, what’s the bottom line? Well, once again, it comes down to numbers. And those numbers come from the type of loan you use to fund your real estate properties.

Are you ready to start making more money by looking into YOUR funding options? Great! Our team is here to help.

Happy investing!

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!

Money Chat Reminder: How to Fund a Flip

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

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!

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.

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

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

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!

Low Credit Score: A Quick, Easy Solution

Low Credit Score: A Quick, Easy Solution

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!