Tag Archive for: lending options

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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The pros and cons of a portfolio loan

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The pros and cons of a portfolio loan

Today we are going to discuss the pros and cons of a portfolio loan. Nowadays real estate investors enter into this community with the goal of creating generational wealth. Generational wealth can often be achieved by creating a portfolio of homes, as opposed to just acquiring just a few properties. Let’s take a closer look to see if a portfolio loan will be the right product for you to create generational wealth.

Changes in lending options. 

Investors who expand from a few properties to a portfolio of properties will need to open the door to other loan products. Those who invest in single family homes or have 1 to 2 units are using traditional loans, conforming loans, bank loans, or single DSCR loans. If you are transitioning to a portfolio loan it is important to take everything into consideration before diving in. 

Is a portfolio loan right for you?

Pros to using a portfolio loan: Work smarter not harder! 

  1. All mixed properties are under one blanket
  2. One monthly payment
  3. Some have nonrecourse (Nonrecourse does not require a personal guarantee)
  4. Commercial based
  5. The loan is bases on the income from the properties
  6. Don’t have to pay for underwriting on each property
  7. Typically there is a better rate on a larger loan
  8. Can clear up some slots for you.
  9. Can use another person’s credit score if they are under your LLC 

Cons to using a portfolio loan:

  1. Lower LTV
  2. Individual appraisals are needed for each property
  3. Pulling a property out is a hurdle (You won’t be able to sell properties to generate money)

Flexibility of a commercial loan.

A portfolio loan can provide the flexibility you need to create generational wealth. One of the biggest benefits is that it provides the opportunity for you to use another person’s credit score as long as they are under your LLC. In doing so, a higher score can not only keep the transaction going, but it can open more doors. Another thing to keep in mind is that commercial loans are primarily based on the cash flow and the property value. This allows you to lock them in when rates are good so that you can use the slots to build up some additional properties on the side.

Create generational wealth.

By using a portfolio loan you are creating a bigger asset. More importantly commercial loans, unlike traditional loans, will not show up on your credit. Another thing to keep in mind is that banks often restrict your growth either by the number of properties or the loan amount. Those who are aggressive and use a portfolio loan will not only have the flexibility they need to be sucessful, but they will also create the generational wealth they want.

Is a portfolio loan right for you?

Real estate investors who have 20 properties or more need to start searching for other lending options. A portfolio loan is an excellent way to put all of your properties under one blanket loan. Is this the right loan for you? Contact us today to find out more about portfolio loans and other ways you can create generational wealth. 

Watch our most recent video to find out The pros and cons of a portfolio loan.

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First 90 Days Are CRUCIAL to Real Estate Investing Success

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First 90 Days Are CRUCIAL to Real Estate Investing Success

Today we are going to discuss how crucial the first 90 days are to real estate investing success. Although the process of getting things started can be daunting, those who take it one step at a time will in fact build the foundation they need. First and foremost, within the first 90 days it’s important that you find the team you need to create the life that you want. Where do you start? Let’s take a closer look. 

How can you find good properties?

Investors need to focus on finding wholesalers and realtors within the first 90 days who will send them good deals. Real estate investing is all about finding good deals that are undervalued. To clarify, a wholesaler’s main focus is finding properties and selling them to people who want to fix them up. This marketing machine is an excellent resource to find properties that are in disrepair without having to work directly with the seller. Keep in mind that there is a fee. However, by forming relationships with wholesalers, it will result in profitable investment opportunities.  

Example:

An undervalued property $200K

The ARV $400K

The wholesaler is selling for $225K

If you put $100K into it, you would make a $75K profit on the property. 

Finding a lender who wants to work with you.

It is imperative that real estate investors find lenders and bankers who love to work with investors. In fact, not all of them will work with you on your investment properties. That is why having a list of what they offer and  available products will set you up for sucess.

In conclusion.

In a nutshell, you need good deals, as well as money in order to be successful! You can’t find good deals without money, and it’s no good to have money if you don’t have good deals. By finding your team members, you will be able to build your investments quickly and easily. It will also allow you to focus on the numbers and repairs as opposed to dedicating all of your efforts into finding properties. Do you need help accelerating the process? Not sure where to start? Contact us today to find out more!  

Watch our most recent video to find out more about how the First 90 Days Are CRUCIAL to Real Estate Investing Success.

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