Act Fast: Real Estate Investment Essentials for Today’s Market

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Act Fast: Real Estate Investment Essentials for Today’s Market

Real estate investing in today’s market can be daunting. Discover the real estate investment essentials for today’s market so that you can succeed in the near future. For the past 10 to 12 years the rates kept getting better and the pools of money were bigger than ever. It was a time where anybody and everyone could get the financing they needed for their investments. Nowadays, the money is just gone. While this may cause many investors to run away, it is actually the perfect opportunity to get into real estate investing. If you want to participate in this market, there is a learning curve. However, once you learn how to play the game, you will set yourself up to win when rates go back down. 

Now is the 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. 

How can investors prepare?

To get started, buy when property values are low and rates are high. This will guarantee your success when the market changes. When rates go back down over the next few years, you will already have your property, and can take advantage of the higher property value. Those who are positioned correctly, and stick with it, need to be set up correctly. Let’s look at the steps you need to take in order to take advantage of this current market.

  1. Understanding the market by going through knowledge based learning
  2. Set up your realtors
  3. Determine how you are going to find your deals
  4. Learn how to calculate your ARV

By getting all of the training completed over the next 90 days, it will allow you to confidently enter the market right away. If everything keeps going the way it is, then there are going to be more opportunities available compared to before, as well as a smaller pool of investors who can take advantage of this.

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.

How rates are impacting DSCR

Rates are impacting a lot of things, including DSCR and the rental side of real estate investing. A DSCR ratio of 1 means that the expenses and the income are equal to each other. In the past, DSCR ratios were based on a 1:1 ratio. Nowadays, the ratio has increased to 1:1.1, which means that you need to create even more cash flow. Now if we layer that onto a credit score of 680 or 700, then the ratio will increase to 1:1.2. Therefore, the people with better credit scores often get the better deals. 

Creating the leverage you need to succeed.

Make sure that your business is set up correctly from the very beginning in order to create wealth. In doing so, you will be able to open up business credit cards, business lines of credit, and seek out OPM or other people’s money. An underused source of funding is OPM. Nowadays more people are searching for better returns, you can be their solution. Investors who create these buckets of money will set themselves up to win. It is also imperative that you have a good credit score and a good business history so you will be more attractive to the lending community. Do you need help with raising your credit score or locating OPM. Contact us to find out more! 

What do investors need to do?

This is the time when the select few will make a lot in the near future. If you want to take advantage of this, then you have to do certain things. Let’s take a closer look at real estate investment essentials for today’s market. Also known as the pillars of success.

1. Find a lot of properties/find good properties

It is important to buy when everyone else is running away. A successful investor needs to determine where they will find properties, connect with others to start buying better properties, and understand the value of the property. The better the property you find, the better chance you have to get the financing you need. Especially from private lenders or hard money lenders. 

2. Set up your business correctly  

It is imperative that you set up your business to look like you are serious about investing. This includes setting up your business name, establishing business accounts, and applying for business credit cards. In setting these things up correctly, banks and lenders will know that you will do what it takes to succeed.

3. Make sure you have a diverse source of funding 

Start by looking for lenders who are actually lending, and build a relationship with them. In taking the time to build that foundation, you will be the person who goes to the top of the pile. Lenders will not be willing to help investors who don’t return calls, or those who are unprofessional. Finally, broaden your horizons by looking at other options to see who can help create the wealth you want. 

4. Find contractors and resources that will help you complete repairs.

We still see properties that are selling like crazy. These are in good locations and have quality work done. It is important to find contractors and resources that will help create a product that people will want to buy. Don’t skip on the flips! Take the time to find a team who can make your property shine. This will result in a shorter sell at a better return for you.

In Conclusion

Things have changed, bankers have changed, and lenders have changed. You should always have control over your lending options. There is a glimmer of hope in this more restrictive economic environment. Investors can empower themselves by setting things up right, cultivating relationships, and knowing your numbers. You can still make a lot of money in this market as long as you understand the rules in the game and have the flexibility to change with the times. 

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 Real Estate Investment Essentials for Today’s Market.

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Are the high interest rates worth paying right now?

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Are the high interest rates worth paying right now?

There are a number of questions that investors are faced with going into  2024. The main concern is whether or not it is worth paying the higher interest rates right now, and if it will pay off in the end. To help answer these questions, let’s take a closer look at how the market has changed, what you should avoid, and how you can succeed in the New Year.

How has the market changed?

It is the perfect time to jump in if you can buy something low. As long as you do it correctly, you should invest now while everyone is running away! Then when rates go back down, you will be able to create wealth for future investments. A few years ago many people were buying properties for $100K over asking price. In today’s market  they would be able to sell it for maybe $250K. Since they overpaid on the property a few years ago, they are now upside down on their investment. Don’t let this happen to you! As a new buyer, make sure you are purchasing it at a good number while the market is down. Over time you are going to win the game by buying at the right time.

What should you Avoid?

Getting into real estate investing now will get you on the fast track to success. If you are able to buy good properties in good markets, then you will be successful. It is important to avoid properties that are on corners or busy streets. In these times, the best properties are on a culdesac or near local parks. Real estate investors need to research current market trends before jumping in. There are some markets where cities are doing better than suburbs, while others are growing at a faster rate. Another thing to be aware of as a real estate investor is all of the negativity out there, which is driving people out of the market. Instead of following the herd, turn this negativity around so it can benefit you.

Number of Real Estate Investors is Shrinking 

There has been a whole generation of real estate investors who have gone through good times with money, banks, and lenders in the past. This was when everyone was trying to give you more money for your investments. However, the Fed is now trying to slow that down. The huge pool has gotten a little bit smaller for those who are trying to qualify for loans. This lending squeeze has resulted in many real estate investors getting out because they don’t have the credit score or income to succeed in this market. In 2024 there will be less real estate investors, less money available for funding projects, but more deals available for the driven investor.

In Conclusion

Now is the time you should invest in real estate properties! By strategically selecting properties, investors have the opportunity to grow their wealth when rates drop. Don’t let the high interest rates prevent you from investing now. Those who take the plunge will not only take advantage of lower rates later by refinancing, but they will also be ahead of other investors who are just coming into the game. There is a lot of money to be made in real estate. Invest today to succeed in the New Year!

Watch our most recent video to find out more about investing in today’s market.

We can help you get set up to win in 2024! Contact us today!

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How Rising Interest Rates Impact Cash Flow

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How Rising Interest Rates Impact Cash Flow

Today we are going to look at an example of how rising interest rates impact cash flow for real estate investors who are using a DSCR loan. To clarify, a DSCR loan is a loan that focuses on the rents from a rental property and the credit worthiness of the borrower. In today’s market, the increasing interest rates are truly affecting payments and more importantly they are negatively impacting cash flow. 

Example:

$250K Loan 
Time Frame Percentage Expected Payment Change over Time
Couple years ago 3.75% $1,158
Now 9% to 11% 

(depending on LTV)

 $2,011 $853 

Payment Increase 
In the Future 7% 

(you refinance $2,011 principle)

 $1,663 $348

Cash flow increase 
The Optimus  5%

(Looking if it dropped from 9% to 5%)

 $1,342 $669 

Cash flow increase 

This example allows us to visualize why rental properties are failing to cash flow while using a DSCR loan. As a result to higher interest rates, investors are experiencing increasing payments for their properties. This is in addition to rising taxes, and increasing insurance expenses as well. As a result, investors are struggling to break even, let alone create cash flow. In sum, all of these pressures are making it harder to be successful in real estate investing. 

What’s next?

I will be doing a follow up video that will further show you the effect that interest rates have on cash flow. This will include a look from the buyers side, and how the market is going to push up your values. While we don’t have control over the interest rates, we can instead use this time to make the most of the market. By investing in undervalued properties now, you can then refinance when rates go down. This in turn will create the cash flow you need to succeed in the years to come.

Watch our most recent video about why rental properties fail to cash flow and how you can set yourself up for success by investing now.

Do you have questions about DSCR loans or how you can create generational wealth? Contact us today!

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#1 Mistake Made by Small Businesses and Real Estate Investors

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#1 Mistake Made by Small Businesses and Real Estate Investors

What is the #1 mistake made by small business and real estate investors? The answer is not applying for and using business credit cards for business expenses. They are the most important thing and the simplest thing that all investors can do for both their business, as well as their personal lives. While personal credit cards are easy to use, it makes life more complicated as you get into investing.  It doesn’t matter if you are doing flips or rentals, you need to make the switch today!

We Want To Help You!

Our goal is to make it as simple as possible for business owners to succeed. Real estate investing is reliant on leverage or funding for growth and generational wealth. We just want to make the process easier for you. 

Stop Using Personal Credit Cards. 

70% to 80% of people we see are using personal credit cards for business expenses. By putting business charges on your personal credit, it drives down your credit score and makes everything harder. Personal credit cards are used to complete repairs, as well as to grow your business. However, using them on a regular basis will drive down your credit score quickly. This problem even affects investors who are applying for loans. They are either being denied, or required to put more money down because of their credit score.

Where Do You Start?

One of the easiest things to do is to stop using personal credit cards and instead get into simple business credit cards. The best part about business credit cards is that they don’t impact your credit scores. We are talking about the same credit cards you use now, the only difference is that they are in your business name. In making this simple switch, it then allows you to take your business expenses and transfer them onto your business credit card. This not only removes those charges from your credit report, but it also gives you peace of mind that your business expenses will no longer affect your DTI. In the end, the better the credit score, the better the funding you can get to create wealth.

Increase Your Credit Score Quickly.

Here at the Cash Flow Company, we provide a usage loan or 911 loan that will help get your credit score back on track. We use a private non-reporting loan to pay off or down your credit card balances.  With little or no balances showing up on your credit report the next time your credit card cycles, your score increases.  With usage counting for 30% of your score, this will have a huge impact on your new score. We receive calls daily from people who say that they need to increase their score 18 to 20 points. These investors are charged an additional 10% to 20% down, or even being denied loans because of their score. To be clear, this loan is for those who have high balances but don’t have late payments. Is a usage loan right for you? Give us a call today to find out more. 

Open A Business Credit Card Today!

Everyone has credit cards and uses them on a regular basis, so why not make the switch over to business credit cards? Unfortunately, investors ht a detour and go down the path of applying for corporate credit. This is a tiered system that can take months or even years to build. Business credit cards on the other hand can be applied for right away. If you have really good credit and you’re starting a business, then you can get a business credit card right now. Chase, American Express, for example, will give you somewhere to start, as long as you are set up and running like a real business. The more you use the business credit cards, the greater your available credit, and the more benefits you will receive. This includes Southwest, United, Marriott, and so much more. 

Make The Change Today And Succeed Tomorrow!

Both credit scores and leverage are important to create wealth. We want to make sure you do it right! If you have a real business and operate as a real business, then you need to apply for business credit cards today! Investors are hesitant when they are approved for a few thousand to get started. However, when lenders see that you’re using it and paying it down in chunks, they will quickly raise your limits.It may take 2 to 6 months to move everything over, it just depends on where you’re at. Making the change now will make your life so much easier as you grow your business.

Watch our most recent video to find out more about #1 Mistake Made by Small Businesses and Real Estate Investors

Do you have more questions about setting your business correctly? Do you need additional information about raising your credit scores? Contact us today!

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Why You Need More Money to Invest in 2024

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Why You Need More Money to Invest in 2024

2024 is approaching quickly! Will you have the money you need? Investing in 2024 will require more liquidity than ever before. What is liquidity? Liquidity is the money that is available to you to help fund deals. These funds are not from lenders, but are instead from you. This includes funds that you bring into your investments, the amount that you put down on a property, and the money that you have to carry on a project. Let’s take a look at why you need more money to invest in 2024.

Changes In Lending

Banks and credit unions are currently driving down their loan to value percentages, which is making it difficult for investors to qualify. As the new year approaches, Lenders are going to require you to be more liquid, have more reserves, and put more money down. So, by having more liquidity, you will have more opportunities, as well as a huge advantage in 2024 over those who don’t act now.  

Fill Your Buckets Now

The term, “save it for a rainy day” is exactly what you need to be focusing on in today’s market. There are four “liquidity buckets” that should be filled to the brim for not only buying properties, but making payments, doing construction, or any other expenses that may come your way. These four buckets are HELOCS, Unsecured Lines of Credit, Business Credit Cards, and Peer to Peer Lending. All of these resources cost little to nothing for you to have on hand for the New Year. 

Save Today So You Can Invest Tomorrow

The goal is to gather as much money as you can now by filling your liquidity buckets to the brim! As investors, we are all going to need these extra funds for down payments, escrow, paying contractors, as well as any other expenses that come our way. Investors who take the time to prepare, will set themselves up for success come the new year! 

Watch our most recent video to find out more about why you need liquidity. 

If you have any questions on liquidity, finding HELOCs, or have any other questions, please reach out to us!

We would be happy to help guide you to become more successful in 2024. 

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DSCR Loan: Why Rental Properties Fail to Cash Flow

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DSCR Loan: Why Rental Properties Fail to Cash Flow

Today we are going to dive into an example illustrating why rental properties fail to cash flow using a DSCR loan. A DSCR loan are loans focused on the rents from a rental property and the credit worthiness of the borrower. In today’s market, the increasing interest rates are truly affecting payments and more importantly they are impacting cash flow. As a result, it has become harder and harder to qualify for a DSCR loan. Likewise, DSCR ratios are changing also. What used to be a 1:1 ratio (rents compared to expenses), has now increased depending on your LTV. Therefore, many investors can no longer qualify because there is no cash flow for the property. So, what does this look like numbers wise? Let’s take a closer look.

Example:

$250K Loan 
Time Frame Percentage Expected Payment Change Over Time
Couple years ago 3.75% $1,158
Now 9% to 11% 

(depending on LTV)

 $2,011 $853 

Payment Increase 
In the Future 7% 

(you refinance $2,011 principle)

 $1,663 $348

Cash flow increase 
The Optimus  5%

(Looking if it dropped from 9% to 5%)

 $1,342 $669 

Cash flow increase 

In this example it is clear to see why rental properties fail to cash flow, especially with a DSCR loan. The increasing rates have caused payments to increase as well. When combined with ever rising taxes and insurance expenses, investors are struggling to break even, let alone create cash flow. All of these pressures are making it harder to be successful in real estate investing. 

Why is it a good time to buy?

So, why is it a good time to buy? My suggestion for investors is that they need to find something that has good equity and at 25% to 30%. As long as it is breaking even, then in a year or two when rates go back down, you will be able to refinance to increase your cash flow without buying another property. The more affordable the homes are, the bigger the market becomes. The good news is that buyers are going to start buying again, and the values around you are going to increase.. While no one can predict that the interest rates will go back down to 2.5% for owner occupied and 3.75% for investors, there are indications that interest rates will drop in 2024. 

What’s next?

I will be doing a follow up video that will further show you the effect that interest rates have on cash flow. This will include a look from the buyers side, and how the market is going to push up your values. If you can find a good undervalued property now, then you are going to not only create cash flow, but create generational wealth as well. You’re not alone! There are a lot of people who are questioning if they should buy now. 

Watch our most recent video about why rental properties fail to cash flow and how you can set yourself up for success by investing now.

Do you have questions about DSCR loans or how you can create generational wealth? Contact us today!

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How can a newbie invest in today’s real estate market?

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How can a Newbie Invest in Today’s Real Estate Market?

As a newbie real estate investor it can be incredibly daunting. The question on everyone’s mind is whether or not they should take the plunge and invest in 2024 with the high interest rates. There are a few things that new investors need to consider before they invest in this market. This includes shopping wisely, evaluating repair costs, and current interest rates. By taking all of these things into consideration, new real estate investors will be set up to win in 2024.

First, Focus on the Lower End of the Market 

Since interest rates are high, you should probably focus on the lower end of the market. This includes homes that are in the $300K range and below. Affordability is a factor when you’re flipping, because someone has to be able to afford to buy the property once repairs are completed. Thankfully, we have a good inventory shortage as investors, which in turn is creating a greater demand. Therefore, if you have a good price point and a good product, then it’s going to sell quickly. 

Second, Create a Product that People will want to Buy

Especially since you will be the one fixing up the property, it is important that you create a property people will want to buy. As real estate investors, it is crucial that you complete repairs both quickly and correctly in order to maximize your investment. By creating a nice fixed up property in this market, you will have an advantage over those who are not putting in the effort. 

Third, Consider the Impact that Interest Rates will have on your investment.

Interest rates will be a major factor when purchasing a property in this current market. However, if you can find a rental property that can break even, or better yet one that can make a little money, you should invest now to generate cash flow quickly. Interest rates should go down in the next 18 months to 2 years. When they do, you will be able to refinance and come out ahead of everyone who has been sitting on the sidelines.

In Conclusion

Take the plunge and invest in real estate in 2024! By strategically selecting properties and doing the research, a newbie can not only invest in real estate, but they have the opportunity to grow their wealth when rates drop. New investors need to set themselves up for success. In doing so, you will have the potential to increase cash flow and set yourself up to win.

Watch our most recent video to find out more about investing in today’s market.

We can help you get set up to win in 2024! Contact us today!

 

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How to Make Wealth NOW in Real Estate Investing

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How to Make Wealth NOW in Real Estate Investing

In real estate investing it all comes down to leverage. Leverage or loans make up roughly 50% of what makes a successful real estate investment. Funds that are faster, easier and cheaper will consequently drive your investments and create the wealth. So, how can you make wealth now? In real estate it is imperative that you create a step by step plan regarding what you need in order to accomplish your investment goals. Let’s take a closer look at how you can get started!

First and foremost, you need leverage!

Make sure that you have the right leverage and that you are prepared before jumping into a deal. It is so easy to let your emotions drive your business decisions. In doing so, there is a tendency to overspend and get behind the eight ball. Take a step back and research your options, contact lenders, and analyze all of your numbers. In a nutshell, even if you find the right deal, yet you don’t have the money, then you really don’t have a deal at all.

Second, find the right property.

Again, take a step back and create a plan, research properties, and compare them as well. It may take a couple months to research and test things out. In taking the time to get comfortable with the process, you will in turn be more successful. You need to go through a live example and take a couple test runs in order to understand everything that is involved. Get your hands dirty and you will figure out the nitty gritty stuff down the road. It is important to not just conceptualize the project. Instead just do it! 

How do you get into the game?

As a new investor that is just getting started, it can be very daunting. There are three ways that you can get the ball rolling.

1. Find a mentor

It is helpful to find a successful real estate investor to mentor you through the process. By finding a good flipper right now, you will not only have the opportunity to invest with them, but you will be able to walk through the steps as well. Just be careful not to hand over your money to someone who will not use it properly. Do your research and take the time to find the right partnership. 

2. Look into the 12 week year program

Currently I’m working on completing a 12 week year program. This method is very structured and helps you complete a year’s worth of work in only 12 weeks. As a result, investors avoid the pitfalls and low productivity that occurs when the goals are stretched out throughout the year. 

3. Do your research every day

If you are just starting out in real estate investing, it is important that you get up every day and look at properties, contact realtors, contact wholesalers, and find lenders that will help you achieve your investment goals. The more you talk to them, the more likely they will be to work with you in the future. Now this process should only take 15 to 20 minutes, not 8 hours. If you start out slowly and build your database, then in 3 months time you will be better off compared to others who jumped in right away.

Make wealth Now!

Taking the time to get prepared, will not only increase confidence, but more importantly it will set you up for success. Likewise, you will also be able to regulate your emotions, so they will no longer dominate your business decisions. Ultimately you do need some emotions to drive your business, however, it is important to let the numbers guide your business decisions. Avoid getting behind the eight ball by making investment moves that will set you up to win the game of creating wealth. 

Watch our most recent video to find out more about how you can make wealth NOW!

Do you have more questions about setting your business correctly? Do you need additional information regarding lending options? Contact us today!

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Investing in 2024: Why you need a HELOC

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Investing in 2024: Why you need a HELOC

Investing in 2024 will look completely different compared to years past. Investors will need more liquidity due to the increasing lending squeeze from banks. What do I mean by liquidity? Liquidity is the money that is available to you to help fund deals. These funds are not from lenders, but are instead from you. Now is the time to fill your liquidity buckets to the brim. One of the best cash reserves is a HELOC. What is a HELOC and how can it help you save for a rainy day? Let’s take a closer look.

What is a HELOC?

A HELOC, also known as home equity line of credit, provides a revolving line of credit that can be used at any time. HELOCs are normally used for large expenses, paying off high interest rate debt, and any additional expenses that you may face. Investors are feeling the pressure of the lending squeeze from both banks and credit unions. They are both driving down their loan to value percentages and putting more pressure on investors. What started at 90% LTV a year ago, has now plummeted to 75% LTV, and in some cases even 70% LTV. Loan to values are shrinking fast, so now is the time to lock everything in before it drops even further! Make sure that you get HELOCS wherever you can! This can be on your primary residence, as well as on all of your investment properties. Remember, you don’t have to use the funds from the HELOCS immediately, the money is just reserved for a rainy day. While it may cost a few hundred to close your HELOC later on, it is a great resource to have when buying properties, making payments, doing construction, or any additional expenses that come your way. 

The Time is NOW!

The goal before the end of the year is to fill your liquidity buckets! By opening a HELOC you can fill your liquidity bucket to the brim in preparation for  2024. As investors, we are all going to need these extra funds for down payments, escrow, paying contractors, as well as any other expenses that come our way.  Lenders are going to require you to be more liquid, have more reserves, and put more money down. Investors who take the time at the end of this year to prepare, will have more opportunities and a huge advantage in 2024 over those who don’t act now. 

Watch our most recent video to find out more about why you need liquidity. 

If you have any questions on liquidity, finding HELOCs, or have any other questions, please reach out to us!

We would be happy to help guide you to become more successful in 2024. 

 

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2024 Housing Market Predictions: Why You Should Invest

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2024 Housing Market Predictions: Why You Should Invest

The question on every real estate investor’s mind is why you should invest in 2024 with the higher interest rates. There are a few things that people need to consider before investing in this market. This includes shopping wisely, evaluating repair costs, current interest rates, property location, and funding. By considering all of the factors before jumping in, real estate investors can increase their cash flow for future investments. 

Let’s take a closer look at the three things real estate investors need to consider when purchasing a property

First, Focus on the Lower End of the Market 

Since interest rates are high, you should probably focus on the lower end of the market. This includes homes that are in the $300K range and below. Affordability will be a factor when you’re flipping, because someone has to be able to afford to buy the property once repairs are completed. Thankfully, we have a good inventory shortage as investors, which in turn is creating a greater demand. Therefore, if you have a good price point and a good product, then it’s going to sell quickly. 

Second, Create a Product that People will want to Buy

Especially since you will be the one fixing up the property, it is important that you create a property people will want to buy. As real estate investors, it is crucial that you complete repairs both quickly and correctly in order to maximize your investment. By creating a nice fixed up property in this market, you will have an advantage over those who are not putting in the effort. 

Third, Consider the Impact that Interest Rates will have on your investment.

Interest rates will be a major factor when purchasing a property in this current market. However, if you can find a rental property that can break even, or better yet one that can make a little money, you should invest now to generate cash flow quickly. Interest rates should go down in the next 18 months to 2 years. When they do, you will be able to refinance and come out ahead of everyone who has been sitting on the sidelines.

Now is the time to jump in! Let’s take a look at how the market has changed and what you should avoid as you move forward.

How has the market changed?

It is the perfect time to jump in if you can buy something low. As long as you do it correctly, you should invest now while everyone is running away! Then when rates go back down, you will be able to create wealth for future investments. A few years ago many people were buying properties for $100K over asking price. In today’s market  they would be able to sell it for maybe $250K. Since they overpaid on the property a few years ago, they are now upside down on their investment. Don’t let this happen to you! As a new buyer, make sure you are purchasing it at a good number while the market is down. Over time you are going to win the game by buying at the right time.

What should you Avoid?

Getting into real estate investing now will get you on the fast track to success. If you are able to buy good properties in good markets, then you will be successful. It is important to avoid properties that are on corners or busy streets. In these times, the best properties are on a culdesac or near local parks. Real estate investors need to research current market trends before jumping in. There are some markets where cities are doing better than suburbs, while others are growing at a faster rate. Another thing to be aware of as a real estate investor is all of the negativity out there, which is driving people out of the market. Instead of following the herd, turn this negativity around so it can benefit you.There are better deals now than there were a few years ago. This is because people are fearful and want to get rid of properties before things get worse. As long as the sellers have that fear, then investors who are level headed can benefit. 

Number of Real Estate Investors is Shrinking 

There has been a whole generation of real estate investors who have gone through good times with money, banks, and lenders in the past. This was when everyone was trying to give you more money for your investments. However, the Fed is now trying to slow that down. The huge pool has gotten a little bit smaller for those who are trying to qualify for loans. This lending squeeze has resulted in many real estate investors getting out because they don’t have the credit score or income to succeed in this market. In 2024 there will be less real estate investors, less money available for funding projects, but more deals available for the driven investor.

In Conclusion

Now is the time you should invest in real estate properties! By strategically selecting properties, investors have the opportunity to grow their wealth when rates drop. If you are coming in as a new investor, it is important to make sure that you are set yourself up for success. By increasing the amount of money you bring in, and filling your liquidity buckets, you will stand out to lenders. Real estate investing is all about using other people’s money to create wealth with a little bit of your own money. By considering all of the factors and creating a plan, real estate investors will have the potential to increase their cash flow for future investments.

Watch our most recent video to find out more about investing in today’s market.

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