Tag Archive for: 100% financing

Myth Busted: Why 100% Financing Doesn’t Exist

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Myth Busted: Why 100% Financing Doesn’t Exist. Real estate investors hear it all the time. “Get 100% financing for your flip.” At first, that sounds amazing. However, there is a big problem with that statement. True 100% financing does not exist. Yes, some lenders will fund 100% of the purchase price. In addition, some lenders will fund 100% of the rehab budget. Still, that does not mean they fund 100% of the deal. There are many other costs that show up during a project. Therefore, if you are not ready for them, your profits can disappear fast. Even worse, many investors slow down projects because they run out of available funds. As a result, delays pile up, stress builds, and profits shrink. The good news is this problem is fixable. Once you understand how real estate project cash flow really works, investing becomes easier, faster, and more profitable.

The Real Problem with “100% Financing”

Many new investors think this: “If the lender covers the purchase and repairs, I do not need any money.” Unfortunately, that is not how investing works. There are always costs outside the loan. For example, many lenders do not cover:

  • Closing costs
  • Title fees
  • Insurance
  • Origination fees
  • Legal fees
  • Utilities
  • Option fees
  • Wholesale fees
  • Over-budget repairs
  • Contractor deposits
  • Escrow timing gaps

Therefore, even if a lender says “100% financing,” you still need available funds ready to go. One project from the transcript showed nearly $13,000 in costs that were not covered by the lender on a $250,000 loan. That is real money investors still had to bring to the table.

The Hidden Costs That Kill Deals

Most investors only look at the purchase price and rehab budget. However, real profits come down to speed and preparation. Let’s look at what really happens during a project.

Closing Costs Add Up Fast

Every deal has fees.

For example:

  • Title company charges
  • Loan fees
  • Insurance costs
  • Underwriting fees
  • Mortgage taxes
  • Legal fees

Individually, these may not seem huge. However, together they can become thousands of dollars. One example from the transcript showed almost 3.8% of additional costs outside the lender funding. Therefore, a project that “looked funded” still needed over $12,000 out of pocket. That catches many investors by surprise.

Cash Flow Problems Slow Projects Down

Now let’s talk about the bigger danger. Cash flow. This is where many investors lose money. For example, contractors often need deposits upfront. In addition, materials like windows, doors, or flooring may need to be ordered before escrow reimbursements arrive. So, even though the lender may reimburse those costs later, you still need the money today.

Otherwise:

  • Contractors stop showing up
  • Materials arrive late
  • Inspections get delayed
  • The project slows down
  • Holding costs increase

Then profits start leaking away month after month.

Every Month Delayed Costs You Money

Speed matters in real estate investing.

The faster you finish:

  • The lower your holding costs
  • The lower your interest payments
  • The lower your stress
  • The faster you can move to the next deal

However, when projects drag out, profit erosion starts.

For example:

  • Interest keeps building
  • Utilities continue every month
  • Taxes keep coming
  • Insurance costs continue
  • Contractors leave for other jobs
  • Market conditions can change

One extra month may not seem like a big deal. However, two or three extra months can destroy a large part of your profit. That is why available funds matter so much.

Why Smart Investors Aim for 120% Funding

Experienced investors understand something beginners often miss. They know they need more than the lender loan. That is why many successful investors try to be “120% funded.”

In simple terms, that means:

  • The lender covers most of the deal
  • The investor has extra available funds ready

Those available funds help cover:

  • Closing costs
  • Surprise repairs
  • Escrow timing gaps
  • Contractor payments
  • Carry costs
  • Material deposits
  • Budget changes

As a result, the project keeps moving. And when projects move faster, profits usually improve. The transcript explained this perfectly. Investors who already have available funds set up often complete projects faster and with less stress.

Good Investors Build “Money Buckets”

Professional investors do not wait until problems happen. Instead, they prepare ahead of time. They create what many investors call “money buckets.” These are available funding sources that sit ready until needed.

For example:

  • Business credit cards
  • HELOCs
  • Lines of credit
  • Private money
  • Cash reserves
  • Funding partners

The key is simple. You do not use these funds unless needed. However, having them available keeps your project moving at full speed. That is a huge advantage.

A Simple Example

Let’s say two investors buy similar properties.

Investor #1 Has Available Funds

  • Contractors stay paid
  • Materials arrive early
  • Repairs move fast
  • The project finishes in 3 months

Investor #2 Runs Tight on Money

  • Contractors wait for payment
  • Materials get delayed
  • Escrow refunds arrive late
  • The project takes 6 months

Now look what happens.

Investor #2 pays:

  • More interest
  • More utilities
  • More insurance
  • More taxes
  • More stress

Meanwhile, Investor #1 already moved on to the next deal. That is the power of proper funding.

“100% Financing” Should Mean Something Different

The real goal is not finding a lender that funds everything. The real goal is building a full funding system.

That means:

  1. The lender funds the main loan
  2. You have available funds ready
  3. Your project keeps moving fast
  4. You protect your profits

That is real investing. And honestly, this mindset change helps investors more than almost anything else.

Final Thoughts

The myth of 100% financing hurts many new investors. They think the lender handles everything. However, real projects always need more cash flow, more planning, and more available funds. The good news is simple.

Once you understand this:

  • You can plan better
  • You can move faster
  • You can lower stress
  • You can protect profits
  • You can grow your investing business easier

The investors who win are usually not the ones with the fanciest projects. Instead, they are the ones who stay prepared. They understand cash flow. They understand speed. And most importantly, they understand that real estate investing is about keeping projects moving forward.

Watch my most recent video to find out more about: Myth Busted: Why 100% Financing Doesn’t Exist

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Can I Use a DSCR Loan for a Fixer Upper?

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One of the most common questions investors ask is this:
Can I use a DSCR loan for a fixer upper?

The answer is simple: No.

DSCR loans are only for rental-ready properties. That means the property must be in good enough shape for a tenant to move in right away—or at least within a couple of weeks.

What Is a DSCR Loan, Really?

DSCR stands for Debt Service Coverage Ratio. This loan is all about the income from the property. In other words, the rental income—not your personal income—determines if you qualify.

Because of this, DSCR loans are a great tool when you’re buying or refinancing a rental property that’s already in move-in condition.

But if the property is missing a kitchen, bathroom, or major systems like HVAC, it won’t qualify for a DSCR loan. Lenders need to see that it’s rentable right away.

What If the Property Needs Work?

If your deal is a value-add property—meaning it needs some fixing up—you’ll need a different kind of loan for the first phase.

Here’s the right approach:

Step 1: Use a Fix-and-Flip or Bridge Loan

These short-term loans are designed to help you buy and rehab a property. Even though they’re called “fix and flip,” they work just as well for “fix and rent” situations.

You can use this type of loan to:

  • Buy the property

  • Fund the repairs

  • Get it ready for rental

Many banks and lenders offer these under the name bridge loans, fix-and-flip loans, or even fix-and-hold loans.

Step 2: Refinance Into a DSCR Loan

Once the rehab is complete and the property is rental-ready, you can refinance into a DSCR loan. Now the lender can base the loan on rental income—and not your tax returns or W-2s.

Use the BRRRR Strategy Instead

This two-loan approach is a part of the BRRRR method: Buy, Rehab, Rent, Refinance, Repeat

It’s one of the best ways to build wealth with real estate. But you’ll need to follow the right steps to make it work.

👉 Need help understanding the BRRRR method?
Download our free BRRRR map at TheCashFlowCompany.com. It shows exactly how to use the right loans at each stage.

Reminder: DSCR Is for Rental-Ready Only

To keep things simple:

  • Use DSCR loans for clean, rent-ready properties.

  • Use fix-and-flip or bridge loans for properties that need work.

Then, once your project is finished, refinance into a long-term DSCR loan.

Helpful Tools Just for You

At The Cash Flow Company, we want to make things easier. That’s why we offer:

  • ✅ Free tools and downloads on our website

  • ✅ A detailed BRRRR map to guide your deals

  • ✅ A powerful eBook: “100% Financing 100% of the Time”
    It shows you how to fund your deals even if you don’t have your own money

👉 Visit TheCashFlowCompany.com to grab your free tools today!

Final Thoughts

The best real estate investors choose the right loan for the right stage of the deal.
If the property is ready to rent, go DSCR.
If it’s a fixer-upper, start with a short-term rehab loan.

Then, refinance the smart way.
📈 That’s how you build cash flow and long-term wealth.

Want help choosing the right loan for your next deal?
Reach out to us—we’re here to help you succeed.

Watch our most recent video to find out more about: “Can I Use a DSCR Loan for a Fixer Upper?”

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How to Get TRUE 100% Financing – The Real Cost of a Fix and Flip

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Today we are going to discuss how to get true 100% financing – the real cost of a fix and flip. A lot of people think 100% financing is a gimmick. It’s not. It’s simply a method.

If you’re flipping a property, you can fund the full deal, but only if you know how to stack your financing and plan ahead. In this guide, we’ll walk through a real fix and flip example and show you what it really costs to do it right. Then, in upcoming videos and resources, we’ll show you how to fund all of it without using your own cash.

What 100% Financing Really Means

Let’s start with the basics.

Here’s a typical flip deal:

  • Purchase price: $300,000

  • Rehab budget: $60,000

  • Total cost: $360,000

At first glance, you might think you just need to cover the purchase and rehab. But that’s not the full picture. In fact, there are several more costs you need to plan for.

What the Lender Covers

Most lenders will help you cover part of the deal. But not all of it.

Here’s what they typically do:

  • Lend 90% of the purchase price

  • Lend 100% of the rehab

So if you need $360,000 total, you’ll probably get about $330,000 from a lender. That leaves $30,000 you need to bring in as a down payment.

At this point, many people think they’re fully funded. But not so fast.

What YOU Still Need to Pay

You’ll need a lot more than $30,000 to complete the flip. Here’s a full breakdown of everything you’ll need to cover out of pocket (or with available funds).

💸 Pre-Closing Costs

You’ll have to pay for a few things before the loan closes.

  • Earnest money deposit: $5,000

  • Appraisal and other fees: $1,000

That’s $6,000 you’ll need before the deal even funds.

🏁 Closing Costs

Now let’s look at the day of closing.

  • Down payment: $30,000 (minus your $5,000 earnest = $25,000 more due)

  • Lender fees (2% of $330,000 loan): $6,600

  • Insurance (builder’s risk policy): $2,400

Total at closing = $34,000

📆 Interest Payments

Even if you’re not making payments monthly, most lenders expect interest to be paid eventually. You need to plan ahead.

  • 5 months of interest at $2,750/month = $13,750

🔧 Rehab Surprises and Extras

Most flips run into unexpected costs. It could be an upgrade, damage, or changes you didn’t plan for. That’s why it’s smart to budget extra.

  • 15% of rehab budget ($60,000) = $9,000

  • Pre-listing costs (photos, staging, etc.): $500

Total = $9,500

💰 Pre-Funding the Escrow

Lenders don’t give you rehab money up front. Instead, you have to spend first and get reimbursed later. That means you need to front some of the rehab cash.

  • 25% of rehab budget = $15,000

This money will come back to you — but only after the work is done and inspected. So you need to have it ready to go.

The Real Total You Need

Let’s add everything up:

  • Pre-closing & closing: $40,000

  • Interest + surprises + pre-list: $23,250

  • Escrow pre-fund: $15,000

Grand Total = $78,250

That’s how much you’ll need in available funds — not necessarily in cash, but ready to go — to complete this deal the right way.

Why It Matters

If you don’t plan for these costs, your project could get delayed. You might not be able to pay a contractor. You might miss a good deal on materials. And worse, you could lose time.

And in real estate, speed equals profits.

What’s Next?

We’ll show you exactly how to cover these costs without draining your bank account. It’s called credit stacking, and it’s how seasoned investors get true 100% financing.

✅ Want to get started now?
Download the free eBook and learn how to build your money bucket: a simple way to fund every piece of your next flip.

Watch our most recent video to find out more about: How to Get TRUE 100% Financing – The Real Cost of a Fix Flip

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Real Estate Investing Tips: Getting 100% Financing

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Real Estate Investing Tips: Getting 100% Financing

Today we are going to focus on one of the biggest questions real estate investors have, which is how they can get 100% financing. Here at The Cash Flow Company, we talk to an average of 20 to 25 investors a day. Many of them are facing a number of hurdles that are not only impacting them, but their investments as well. By looking at the patterns that we have seen over the years, it allows us to better meet the needs of our clients. How can you get 100% financing on your next investment property? Let’s take a closer look.

How do I get 100% financing?

Everyone wants to get into real estate investing with 100% financing. However, many of them wonder how can they get the money they need for their rental property or fix and flip. While there are some lenders who offer 100% financing, they will only do so if you have already done 1 or 2 deals. To put it another way, investors who have not had the experience yet, need other lending options immediately. Many traditional lenders will only lend 80% to 90%. Become a real Real Estate Investor by building your confidence to go ask people for the money you need for your investments. By finding good deals and demonstrating your confidence, the sky is the limit to your success.

First, HELOCS:

HELOC stands for home equity line of credit. A HELOC allows you to take money out of your property or a rental property. You can then use these funds to bridge the lending gap for your next investment.

Second, Real peoples money:

Real people are those within the community who are in search of better returns on their funds. There are a ton of people out there who have $20K to $100K to invest and are looking for better returns. 

Third, Start using creative financing today:

Creative financing includes business credit cards, which can be used to fund the rehab, staging, and even a Vrbo. However, it is important to keep in mind that the credit card needs to be a business credit card at 0%, otherwise it will not be beneficial to you or your investment needs. 

Fourth, What is stacking and how can it help you reach your financing needs?

The lending journey begins with your primary mortgage company who will give you 80% to 90% financing. As a result, investors must begin the search for additional financing options in order to get up to 100% financing. Gap funding options can actually include HELOCS, family friends, real peoples money, as well as establishing a partnership. 

Are you on the right path? 

Contact us today if you have any questions on how to get started in real estate investing! Do you have a property in mind? Send us the numbers and we will see if it is a good investment opportunity for you. Nowadays funding is a critical piece to real estate investors’ success, it is important that you know your numbers ahead of time to make things easier, cheaper, and faster. 

Watch our most recent video  to learn more Real Estate Investing Tips: Getting 100% Financing.

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