Tag Archive for: Wholesale properties

What is the Fix and Flip Escalator: Terms

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So, we mentioned the Fix and Flipper Escalator, but what IS it?

Today, we’re going to breakdown its terms so you can begin to understand the SIMPLE math behind it.

Ready?

Here we go!

Money Partner

Cost:

Pros: Allows you to work on a project when you have no money, and also learn as you go.

Cons: These arrangements almost always favor the partner/mentor with at least half of the money going to them.

Hard Money

Cost:

Pros: Most hard money loans will fund up to 100% of your project. If you finish your project on time (or ahead of schedule), it’s cheaper than a partner/mentor.

Cons: Charge higher interest rates. If you take longer than planned to finish your project, most (or all) of your profits will vanish.

Soft Money

Cost:

Pros: Comes with lower costs than hard money, and less paperwork and hassles than banks.

Cons: Requires you to put more money and experience into the project. It might also require a better credit score.

Banking

Cost:

Small, local banks (pros and cons):

  • Offer ease and convenience.
  • Might charge a little more than larger banks but they make the process easier.
  • Smaller banks also look at your project history but give you some credit for the projects you’re about to do.

Big, commercial banks (pros and cons):

  • Require all documentation and make the process tougher.
  • If you have all your ducks in a row, they will typically save you money, but most of the time it’s not worth the hassle.

Cash

Cost:

Pros:

  • All of the profits go straight into your pocket
  • No monthly cashflow issues.

Cons:

  • Limits you on the number of projects you can work on (which, honestly, might be a good thing).
  • Eliminates the leverage factor of completing more deals in a year.

Okay, now that you get the basic gist of who’s who on the escalator, we can start introducing some samples.

If you don’t want to wait, give us a call to start chatting about how you can start making, rather than losing money.

Motivational Monday – Build a Door

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Win the Real Estate Finance Game!

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Did you know more than $100,000 is sucked out of your pocket every two years? Yeah, that’s a lot of money—money you could be making rather than losing.

Why is this happening? Simply put, you’re not playing the real estate finance game right. As a fix and flipper, you probably think about projects like this:

You likely spend most of your energy debating whether or not to buy a property, and then creating a budget to maximize the repair WOW! factor. Smart, but that means financing is left for last…and least.

Code red! Code red!

Kidding.

Kind of.

As important as financing is, we get it. Who likes doing math and paperwork? Let’s face it, it’s just easier to assume all loans are identical and it’s perfectly fine to take the same financial path for every project.

…It’s not.

Sorry.

By taking the same path for every project, you risk losing a lot of money. Like, hundreds of thousands of dollars.

So, how do you win the real estate finance game? That’s what Hard Money Mike is all about! We want to help you understand how to increase your profits, lower your cost of funds, and improve your monthly cash flow.

If you’re ready to stop losing and start making, contact us! We’re excited to show you how you can win the real estate finance game.

Great Wholesale deal in WELSHIRE, Denver

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Hard Money Mike Supports Local Wholesale Deals

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We are happy to support our local Wholesale Venders by helping them market their new deals available. As always do your own numbers and inspections. We can not always share the address but we are linking you straight to their deals.