Peer to Peer Lending: How to Win Big in Real Estate Investing

How can you win big in real estate investing? The answer is peer to peer lending or other people’s money. Throughout the past 12 years we have done business with a lot of people using OPM, also known as other people’s money. What is other people’s money? It is finding people within the community who have money that they want to invest. In using this form of leverage, it not only provides the funding you need, but it also gives the peer lender a better return on their money as well. Let’s take a closer look to see if OPM can help you win big in real estate investing!

Don’t let financing restrictions keep you down!

Over the past few years the Fed has been tightening things up, causing the lending pools to shrink. This is where OPM can help real estate investors. It can provide the funding they need without having to navigate the bank’s restrictions and increasing requirements. Just to clarify, OPM and peer to peer lending have been around since before banks were established. By going back to the basics you can get the funding you need to win big in the long run!

OPM can benefit everyone! 

Within our community, there are a ton of people who are looking to do something better with their money. Nowadays neither the stock market or banks are providing good returns on investments. By becoming an OPM lender or a peer lender, you have the opportunity to get 10% back on your investment as opposed to 5% from traditional methods. Real estate investors also benefit because they can not only fill their liquidity buckets for current projects, but future investments as well.

Follow the golden rule to succeed in this game!

It is important that you follow the golden rule when working with OPM lenders. The relationship can either be a positive one or a negative one depending on how prepared and honest you are. Real estate investors need to have everything set up correctly, ensure the deal is secure, and most importantly form an honest relationship with their OPM lender. In doing so, real estate investors will set themselves up for success.

What can OPM be used for?

Other people’s money or peer to peer lending can be used for anything and everything! Whether it’s for a down payment, fix up costs, or just setting money aside for a rainy day, there is something for everyone. As long as you set everything up correctly, this form of lending provides an easy and low risk option for not only the investor, but the peer lender as well. Whether it’s a portion of a project or an entire purchase, OPM provides the flexibility real estate investors need.

Now is the time to set yourself up to win! 

Peer to peer lending has something for everyone! This low risk option provides the flexibility you need to win in real estate investing. With confidence and a secured deal, the sky’s the limit to your success. Here at The Cash Flow Company we strive to help investors reach their investing goals. Contact us today to find out more about other people’s money and how you can get on the fast track to success.

Watch our most recent video, Peer to Peer Lending: How to Win Big in Real Estate Investing to find out more.

by

How to Protect Your Peer Lenders

Categories:

How to Protect Your Peer Lenders

Today we are going to discuss peer to peer lending, as well as how to protect your peer lenders. What is peer to peer lending? To put it briefly, it is one person lending to another person. By working with people within the community, it helps others who want to make better returns on their hard-earned money. More importantly, it helps you achieve your investment goals quickly! 

There is something for everyone.

There is something for everyone with peer to peer lending. Whether it’s $5,000 to $3,000,000, someone in the community has the money you need. For example, funds can be used for down payments, fix up costs, small business start up costs, and even used to cover the entire project! This form of lending provides more flexibility, simpler underwriting, faster closing, and no prepayment requirements. It’s an excellent option for real estate investors. 

How can you guarantee success? 

It is important that real estate investors protect their peer’s money by putting them in secure deals. To clarify, a secured deal is with real estate and cash flowing. The first step in creating a secured deal is closing with a Title company and proper paperwork. This protects both the real estate investor, as well as the peer, to ensure everything remains honest.  Most importantly, don’t gamble with your peer’s money. Pay them back as agreed and be truthful. In doing so it will establish a positive relationship that will ensure future deals. By doing these things, you’ll create a win-win situation. 

Make the lending switch today!

Ultimately, every investor needs peer to peer lending! It’s a fast, cheap, and dependable funding option! 

Contact us today to find out how you can win in the real estate game.

Watch our most recent clip to find out more!

 

by

NOW is the Most Valuable Time to Invest in Real Estate Investing

Now is the time to invest in real estate! As the Fed is tightening up and banks are lending less, it creates better deals for real estate investors.  There are going to be good deals coming up that will help you to not only create the income you need but the generational wealth you want. By getting into it now and understanding the different components, it will help you in the long run. This includes setting up your realtors, finding deals, and calculating ARV. Now is the most valuable time to invest in real estate! Don’t miss out on this opportunity!

If things are tightening up, why does that create more opportunities?

When the Fed shrinks the money pool, it in turn decreases what’s available for everyone. This causes lenders and banks to swim upstream in order to look for the best of the best. Banks are being pushed to the point that they can only lend a portion of what they could before. Let’s take a closer look at the money side as a customer, and as an investor, to explain why these times are creating more opportunities. The customers are the ones who own their homes and are going to give it up for a discount. While investors are looking at the property as money to invest. Once again, leverage is the key to real estate investing and why we can make money from nothing. Anybody can do this and create generational wealth if you are set up correctly and financially prepared

How lending has changed.

One of the largest private lenders used to lend on ARV. ARV stands for after repair value. Lending based on ARV allows investors to get more money, create more leverage, and buy more deals. So if you’re in real estate investing you need to focus on purchasing undervalued properties, fix them up, and either keep it or sell it. This will in turn create wealth for you to reinvest in another property. In today’s market however, lenders are lending off of LTV, or loan to value, instead of ARV. This is often a $50K to $75K difference from what they were lending before the market changed. 

Let’s look at an example of ARV vs LTV

Purchase a house for $250K with a rehab of $50K
Worth when all said and done Percentage Amount they will lend Amount lenders  want you to put in 
ARV $400K $400K at 75% Close to $300K 10%
LTV Lenders don’t looks at this  $300K at 75% Close to $225K 10% to 30% 

It is clear to see what a big difference it makes when lenders switch from ARV to LTV. They are becoming tighter on their lending, lending less, and charging more. This creates a smaller pool of investors, because many can no longer qualify for those deals. While the deal flow might remain the same, only 20% to 30% of investors are prepared to continue buying in this market. There are going to be better deals for those who can buy and buy quickly.

Now is the most valuable time!

It is one of the most valuable times to get into real estate investing. This is because the Fed is tightening up and banks are starting to lend less. In doing so, it creates better deals that will in turn create wealth and income in the near future. One of the most important things to remember is that when there is fear in the street, that is when people start running. These are the times when you need to make your move. Make sure that you have some money available, a good credit score, and a good business history to ensure that you are a client that is attractive to lenders.

At The Cash Flow Company we can help you find the funding you need and guide you through this market. 

Watch our most recent video to find out more about why NOW is the Most Valuable Time to Invest in Real Estate Investing.

by

How to Get Wholesalers to Email YOU!

 Today I would like to share with you what I’ve learned over the past 23 years while working with successful investors. These investors have learned how to grow their wealth quickly and easily by working smarter, not harder! What exactly does that mean? To put it briefly, they work smarter by getting on the wholesaler’s “A” list. As a result, they can find incredible deals without scouring the internet or contacting realtors. Find out how to get wholesalers to email you today! Let’s get started!

Finding good wholesalers

First and foremost, you need to find wholesalers without doing endless internet searches or asking other investors. Investor Lift is a user-friendly website that can help you build a wholesaler network quickly. This website allows you to find the majority of wholesalers in your area by simply clicking on the property. More importantly, you to find the contract information including their email and often a phone number as well. In as little as 10 to 15 minutes you can be emailing wholesalers and getting deals sent directly to your inbox.

  1. Create an excel spreadsheet to copy and paste the wholesalers information into.
  2. Go to Investor Lift at  https://investorlift.com/ 
  3. Sign up for a free account by clicking Register in the upper right corner.
  4. Select the State that you are searching in.
  5. Click on a Property that you are interested in.
  6. Select Contact to see who is selling the property.
  7. Copy and Paste the email and phone number in your excel spreadsheet.
  8. Build your List by going through each property and adding to the excel spreadsheet.
  9. Add Properties to your excel spreadsheet daily.
  10. Send them an email sharing what types of properties you are looking for.
  11. Follow up weekly to see what they have available.
  12. Go to the properties you are interested in.

Get on the “A” list!

Establishing a good relationship with the wholesalers is the key to success! Of course it may take 30-60 days to create the relationship. However, it is important to show that you are an active buyer and a good buyer. As a result, investors will receive property information before it is added to the website. Ultimately wholesalers want investors who know what they are looking for in order to have properties purchased quickly.

Keep a watchful eye.

In a nutshell, you will find both good and bad wholesalers during your search. With this in mind, it is important that you keep a watchful eye out for the bad wholesalers. A bad wholesaler for instance is one who tend to advertise overinflated properties, or properties that have under-inflated fix up costs. Focus your attention on the good wholesalers who have good deals in order to set yourself up for success.

Work smarter not harder!

Build wealth quickly and easily by getting on the wholesalers’ “A” list! In doing so, it creates an easy way to get the cream of the crop before the properties post on the websites. Stop wasting your time looking at 30 to 40 properties a day by using Investor Lift. In addition to finding properties, it is important to find the right financing as well. Here at The Cash Flow Company we can answer your questions and find the right product for you. Reach out to us to find out more about financing flips, BRRRR, bridge loans, and gap loans. We would be glad to walk through any deal that you have and see how we can make it even better.

Watch our most recent video to find out more about how to Get Wholesalers Emailing YOU! 

by

Why You Should Use Peer to Peer Lending

Today we are going to discuss what peer to peer lending is and why should you use it. As a result of all of the changes that have happened in the market over the past few years, real estate investors are looking for alternative funding. It is an excellent option that not only allows you to work with people in the community, but it creates flexible funding for your next deal. Let’s take a closer look at why you should make the switch! 

Removing the middle man.

Peer lending has been around for centuries, long before formal banks were established. Nowadays banks are increasing their requirements and shrinking their lending pool. In doing so, real estate investors are searching for alternative funding that is flexible and simpler. By using this form of lending, real estate investors no longer have to worry about meeting bank requirements. Instead, it removes the bank entirely and reintroduces the human factor. 

There is something for everyone.

There is something for everyone with peer to peer lending. Whether it’s $5,000 to $3,000,000, someone in the community has the money you need. For example, funds are used for down payments, fix up costs, small business start up costs, and even used to cover the entire project! This form of lending provides more flexibility, simpler underwriting, faster closing, and no prepayment requirements. It’s an excellent option for real estate investors. 

Make the lending switch today!

Every investor needs peer to peer lending! It’s a fast, cheap, and dependable funding option! 

Contact us today to find out how you can win in the real estate game.

Watch our most recent clip to find out more!

by

2024 Real Estate Investing: Are High Interest Rates Worth It?

Today we are going to discuss real estate investing and whether or not it’s worth paying high interest rates in 2024. Over the past few years there has been a huge shift in the market. The banks are swimming upstream in search of the best and investors are having a difficult time qualifying for financing. While many people may run away from investing right now, this is actually the best time to jump in. Those who do will benefit greatly when rates go back down. What do you need to do to ensure success? Let’s take a closer look.

1. Focus on the lower end of the market.

With interest rates being so high right now, it is important that you focus on the lower end of the market. What do we mean by the lower end of the market? These are homes that are in the $300K range as opposed to $500K or above. It is important to keep affordability in mind as well if you are flipping a property. Affordability is key because someone will need to be able to afford to buy the house when you are finished. 

2. Create a good product to guarantee a sale.

Especially for those who are fixing up properties, it is crucial that you have a nice fixed up property to sell. It is more likely that a fixed up property will sell, as opposed to one that needs work. In today’s market there is an inventory shortage for investors and a growing demand for properties. If you are at a good price point and have a good product, then you will win in this real estate game.

3. High interest rates now will create cash flow later.

Keep in mind interest rates and how they will affect your monthly budget. Properties that will at least break even, or better yet cash flow, will create wealth in the near future. Predictions are indicating that rates will come back down later this year. When they do, more people are going to jump into the market. Many people have been waiting on the sidelines for things to go back down. By buying now, you will be ahead of the crowd with a property that is worth more, thus creating more cash flow! 

4. Do it correctly to prevent being upside down.

It is a great time to jump in! If you can buy something low and make it work now. Then when rates go back down, you are creating that wealth.

Purchase Price Overpaid  Two years from now Equity 
A few years ago $350K $100K $325K to $350K $0
Today $250K $0 $325K to $350K Created equity

5. What is a good property?

In order to succeed in this market it is very important that you buy good properties. What is a good property? It is one that is not on corners, busy streets, or near a commercial area. A good property on the other hand is one that is in culdesac or near parks. These types of properties are what you should be focusing on to ensure success. 

6. Why should I get into real estate when others are running away?

All of the negativity out there is keeping people out of the market an driving away those who have been in real estate for awhile. In years past there were some really good deals available and it was easier to qualify for lending. Nowadays, the banks are swimming upstream in search of the best of the best. This decrease in competition creates the perfect opportunity for new investors to begin their real estate investment journey. 

7. Set yourself up for success!

As a new investor you need to make sure that you set yourself up for success. Those who stand out to lenders and have more buckets of money will set themselves up for success. Real estate investing is all about using other people’s money in order to create wealth. Contact us today to find out more about getting your lending buckets set up!

There is going to be less real estate investors and less money out there. However, there are going to be more deals than there were before. These deals will have better margins and will create a greater opportunity for wealth in the future. Contact us today to find out more!

Watch our most recent video about 2024 Real Estate Investing: Are High Interest Rates Worth It?

by

Interest-Only vs Amortization Loan: Calculating Mortgage Payment

In today’s market it is important to find a loan not only flexible, but one that also helps you to create cash flow. Today we are going to compare interest-only loan vs amortization loan by using an example. This will paint a picture of how these two types of loans differ. Which is best for you? Let’s dive in and see!

What is the biggest difference between interest-only and amortization?

Interest only loan products are loans where you are only paying on the interest that is owed on the loan. The principal on these types of loans never goes down unless you decide to put a  little money towards it. An amortized loan on the other hand requires you to pay not only the interest, but a little bit towards the principal as well. In this market, the rates are a little bit higher than they have been in years past. While an amortized loan typically has lower rates, it will also have the principal added to the monthly payment.

Example:

Loan amount: $200K

Rent: $1,700

DSCR ratio 1.1 

Loan Type Rate $200,000 x rate = annual interest Annual interest ÷ 12 = monthly payment Payment amount to mortgage company Taxes, Insurance, HOA, and Flood = $150.00

Creating Grand total for the month

Interest Only 8.25% $16,500 $1,375 $1,375 $1,525
Amortized 8% $16,000 $1,333 $1,333 Interest + principle = $1,468 $1,618

One more step. Adding the DSCR ratio.

What you will normally find is that the interest only rates in this market will be a little higher than the amortized loan rate. However, we still have one more step before we can determine if you can qualify for the DSCR loan on this property. We will need to multiply the grand total for the month by the DSCR ratio. This will help us to determine if the property will qualify for a DSCR loan based on the current rent amount of $1,700. Just as a reminder, the rents are based on what is happening in the market and the assessments done by an appraiser.

DSCR ratio 1.1 Grand total for the month  Grand total for the month x 1.1 = Difference after adding the  DSCR ratio compared to the $1,700 rent
Interest only  $1,525 $1,677.50 Will qualify for DSCR
Amortized  $1,618 $1,779.80 Will not qualify for DSCR

If you have any questions or want to run though the DSCR numbers, contact us today. We can help you compare a DSCR loan to an amortized loan. This will help you determine which is a better fit for your needs. 

Watch our most recent video to Discover Your Best Option: DSCR Loan – Interest Only vs Amortized.

by

What is Peer to Peer Lending For Real Estate Investing

Today we are going to discuss peer to peer lending and why it’s beneficial for real estate investing. What is peer to peer lending? To put it briefly, it is one person lending to another person. By working with people within the community, it helps others who want to make better returns on their hard-earned money. Let’s take a closer look! 

Removing the middle man.

This form of lending has been around for centuries, long before formal banks were established. Nowadays banks are increasing their requirements and decreasing their lending. By using peer to peer lending, real estate investors no longer have to worry about meeting bank requirements. Instead, it removes the bank and reintroduces the human factor. Just to clarify, this doesn’t have to be done with family and friends, it can be anyone in your community. 

There is something for everyone.

There is something for everyone with peer to peer lending. Whether it’s $5,000 to $3,000,000, someone in the community has the money you need. For example, funds can be used for down payments, fix up costs, small business start up costs, and even used to cover the entire project! This form of lending provides more flexibility, simpler underwriting, faster closing, and no prepayment requirements. It’s an excellent option for real estate investors. 

How can you guarantee success? 

It is important that real estate investors protect their peer’s money by putting them in secure deals. To clarify, a secured deal is with real estate and cash flowing. The first step in creating a secured deal is closing with a Title company and proper paperwork. This protects both the real estate investor, as well as the peer, to ensure everything remains honest.  Most importantly, don’t gamble with your peer’s money. Pay them back as agreed and be truthful. In doing so it will establish a positive relationship that will ensure future deals. By doing these things, you’ll create a win-win situation. 

Make the lending switch today!

Every investor needs peer to peer lending! It’s a fast, cheap, and dependable funding option! 

Contact us today to find out how you can win in the real estate game.

Watch our most recent clip to find out more!

by

Peer to Peer Lending – Why You Need it NOW

Today we are going to discuss why you need peer to peer now! This form of lending allows you to work with people in the community who have just as big of a need as you do. In today’s market more people are looking for new sources to meet their needs. Let’s take a closer look.

Who are peer to peer lenders?

Whether they are in retirement and needing extra income, or have money in an IRA, these individuals are looking for a better investment.  These individuals are going through the same crunch as you are in this market. By switching these lenders can have anywhere between 6% to 8% secured while helping you with your investment needs. It creates a win-win for both people!

Changes with affordability.

We all know what is happening with affordability in today’s market. Banks are not only charging more than they have in years past, but they are increasing their requirements as well. The lending pie is now heavily dependent on your credit score, while taking the LTV and income into consideration as well. In looking at the changes in rates, DSCR loans are rising into the 9% and 10% range. Fix and flips have increased as well and are now into the 11% to 13% range. 

Benefit of taking out the middleman.

Peer to peer lending allows us to work directly with humans again by taking out the middleman. This form of lending has been around since before banks were established. Many good investors have a few relationships established already. This not only helps to provide funding, but it also creates the flexibility they need to close deals quickly. Additional benefits are flexible terms, no prepay requirements, simpler underwriting, and fewer closing costs. 

Do it right to succeed.

As a real estate investor it is important that you take the time to make everything secure. In doing so, you will create a good relationship with your lender. This relationship not only helps you financially, but it also creates the flexibility you need to succeed. Any investor or business owner should be looking at alternative lending! Whether it’s for a down payment or funding for an entire project, there is money available.

Don’t make it complicated

It is not uncommon for people to feel uneasy asking family and friends to become financially involved. Whether it is a family member, friend, or a complete stranger, the most important thing you need to do is put them in a good deal. If you are not diligent about this, then it will make things uncomfortable and puts a strain on relationships. What is a good deal? These are deals that have cash flow, or properties that will be easy to flip. Take your time, crunch the numbers, and make sure it is a good deal for both of you.

In conclusion.

As a real estate investor you need to set yourself up for success by finding peer to peer lenders within your community. Over the past few years we have seen things tighten up and become stricter. In doing so, it has created the perfect opportunity to reintroduce this alternative lending source. There are billions and even trillions of dollars out there that can be used for your lending needs! 

Contact us to find out more and how we can help you with your investment needs.

Watch our most recent video to find out more about Peer to Peer Lending – Why You Need it NOW.

by

DSCR Loans: What Does Interest-Only Mean?

DSCR loans are excellent for real estate investors who are working with rental properties. In today’s unpredictable market, one of the best options for investors is an interest-only DSCR loan. This will provide more flexibility, greater cash flow, and the ability to purchase more properties. So what exactly does interest-only mean and is it right for you? Let’s take a closer look.

What is interest only DSCR?

Interest only loan products are loans where you are only paying on the interest that is owed on the loan. The principal on these types of loans never goes down unless you decide to put a  little money towards it. One thing to keep in mind with DSCR loans is that there are prepayment restrictions for the first 3 to 5 years. In most cases this means that you have a 20% cap during this prepay period. Paying a little extra doesn’t normally create an issue. It is just something that you need to keep in mind when working with an interest only loan.  

Example:

Loan amount: $200K

Rent: $1,700

DSCR ratio 1.1 

Loan Type Rate $200,000 x rate = annual interest Annual interest ÷ 12 = monthly payment Payment amount to mortgage company  Add the Taxes, Insurance, HOA, and Flood = $150.00 

This creates the Grand total for the month

Interest Only 8.25% $16,500 $1,375 $1,375 $1,525

One more step. Adding the DSCR ratio.

What you will normally find is that the interest only rates in this market will be a little higher than the amortized loan rate. However, we still have one more step before we can determine if you can qualify for the DSCR loan on this property. We will need to multiply the grand total for the month by the DSCR ratio. This will help us to determine if the property will qualify for a DSCR loan based on the current rent amount of $1,700. Just as a reminder, the rents are based on what is happening in the market and the assessments done by an appraiser.

DSCR ratio 1.1 Grand total for the month Grand total for the month x 1.1 = Difference after adding the  DSCR ratio and the $1,700 rent
Interest only $1,525 $1,677.50 Will qualify for DSCR

With DSCR loans you will have the flexibility of a 5, 7, or 10 year period. A DSCR interest only loan also provides an excellent opportunity for you to cash flow on the property. 

If you have any questions or want to run though the DSCR numbers, contact us today. We can help you compare a DSCR loan to an amortized loan. This will help you determine which is a better fit for your needs. 

Watch our most recent video to Discover Your Best Option: DSCR Loan – Interest Only vs Amortized.

by