Tag Archive for: money

Never Run Out of Money!

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Real estate investing is not just about finding good deals. Instead, it is about making sure you have the money to finish those deals quickly and profitably. Unfortunately, many investors learn this lesson the hard way. They buy a property, start the rehab, and then suddenly run short on cash. As a result, projects slow down, contractors leave, carrying costs grow, and profits disappear. That is why learning How to Build a Real Estate Funding Stack And Never Run Out of Money! can completely change your investing business. A strong funding stack helps you move faster, solve problems quicker, and protect your profits from expensive delays. More importantly, it gives you confidence before you even buy the property.

In this guide, we will break down how smart investors build multiple layers of funding using tools like hard money loans, HELOCs, business credit cards, private money, and cash reserves. Along the way, you will also learn why speed matters so much in real estate investing and how proper funding can help you create a smoother, more profitable business.

What Is a Real Estate Funding Stack?

Most new real estate investors think funding means getting a loan. However, that is only part of the picture. The truth is simple. A lender may help you buy the property and fund part of the rehab. Still, the rest of the project is on you.

That is where many investors get stuck. They run out of money halfway through the deal. Then, projects slow down. Contractors leave. Materials get delayed. Interest payments pile up. Finally, profits disappear.

On the other hand, investors with a strong funding stack move faster, stay calmer, and make more money. A real estate funding stack is simply a group of money sources working together. Instead of relying on one loan, smart investors build layers of funding.

For example, your funding stack may include cash, HELOCs, business credit cards, private money, lines of credit, hard money loans, and funding partners. Together, these tools help you cover everything the lender does not. As a result, you can keep projects moving without stress.

Why Most Investors Run Out of Money

Most investors only focus on two numbers: the purchase price and rehab costs. Unfortunately, real projects cost much more than that. Investors also need money for closing costs, insurance, appraisals, interest payments, utility bills, material deposits, contractor payments, surprise repairs, escrow gaps, and holding costs.

Because of this, many investors get trapped halfway through the project. In fact, many flips that should take 4 to 6 months end up taking a year or longer. Then, every extra month eats away profits.

Many investors find this out after their first project. At first, the deal may look profitable on paper. However, delays change everything. One delay leads to another. Then, profits slowly disappear while expenses continue to grow.

Every Delay Costs You Money

Here is the problem many investors do not see at first. Hard money loans usually have interest-only payments. Therefore, every month you hold the property costs money.

Let’s say your monthly carrying costs are around $2,800 per month between loan payments, taxes, insurance, and utilities. Now imagine your project gets delayed by three months because you did not have enough money for windows, flooring, or HVAC work. Suddenly, that delay costs you more than $8,000.

Meanwhile, the investor with proper funding finishes early and moves on to the next deal. That is why speed matters so much in real estate investing. The faster you move from close to close, the faster you protect your profits.

The Goal Is Funding Certainty

Great investors do not wait until they need money. Instead, they build funding certainty before they buy the property. They know where every dollar will come from. They also know how they will handle surprise costs and keep projects moving.

As a result, they protect their profits and reduce stress during the project. We always say, “The money is in the buy, but you protect your profits with the funding.”

Funding certainty gives investors confidence. Instead of scrambling for money during the rehab, they stay focused on finishing the project quickly and correctly.

Step 1: Start With Your Main Project Loan

First, most investors begin with a hard money loan, bridge loan, or private lender. Typically, lenders may offer up to 75% of ARV, up to 90% of the purchase, and up to 100% of the rehab. However, that does not mean the lender covers everything.

For example, let’s say a property has a $300,000 ARV. The purchase price is $160,000 and the rehab budget is $60,000. A lender may fund 90% of the purchase and all of the rehab. Even then, the investor still needs to bring money into the deal.

That gap catches many new investors off guard. They think “100% financing” means no money needed. In reality, investors still need funds for closing costs, escrow gaps, interest payments, and surprises.

Step 2: Add Your “Money Buckets”

Next, you need backup money buckets. These buckets protect your project when real-life problems show up. Because trust me, they always show up.

Cash reserves help with earnest money, small repairs, utilities, and quick contractor payments. Even a small reserve can keep projects moving smoother.

HELOCs can become one of the best tools for investors because they provide fast access to liquid money. Many investors use HELOCs for down payments, escrow gaps, material purchases, carry costs, and surprise repairs.

Business credit cards can also help bridge short-term expenses. Investors often use them for flooring, paint, appliances, tools, and material deposits. Even better, many business cards offer travel points, cash back, or rewards while giving investors a short float before interest begins.

Private money can help investors scale even faster. In many cases, private lenders help cover down payments, closing costs, carry costs, or emergency overruns. More importantly, private money may help investors avoid expensive delays.

Step 3: Plan For Escrow Gaps

This is where many new investors struggle. Most lenders reimburse rehab money after work gets completed. That means investors may need to pay contractors and buy materials before the lender sends money back.

For example, you may need to buy windows today, install them next week, and wait for reimbursement later. So, if you cannot float those costs, the project slows down immediately.

Because of this, many experienced investors try to keep 30% to 40% of the rehab budget available. That creates speed. And speed creates profits.

Step 4: Build a Contingency Fund

Every project has surprises. Always. Maybe you find bad wiring, roof damage, old plumbing, HVAC problems, or hidden water damage once walls get opened up.

Therefore, smart investors build in a contingency fund before the project starts. A common target is around 10% of the rehab budget. This money protects investors from panic decisions and project delays.

Without a contingency fund, even a small surprise can stop progress for weeks. On the other hand, investors with available funds can solve problems quickly and keep moving.

Step 5: Use the Lowest-Cost Money First

Not all money costs the same. Therefore, smart investors stack funding in the correct order. Usually, investors start with cash first, then HELOCs, then business lines or business credit cards, followed by private money or higher-cost funding if needed.

This lowers total borrowing costs. More importantly, it protects profits over the life of the project. Investors who understand the cost of money usually keep more of their profits at the end of the deal.

A Simple Funding Stack Example

Here is what a simple beginner funding stack may look like. Imagine an investor has $5,000 in cash savings, $15,000 available on business credit cards, and a $75,000 HELOC. Combined with a hard money loan, that investor now has flexibility and speed.

As a result, contractors get paid faster, materials get ordered faster, and delays shrink. At the same time, stress drops while profits improve. That is the power of a strong funding stack.

Why Proper Funding Creates Better Deals

Many investors think profits only come from buying cheap properties. That is only partly true. The real money also comes from faster project completion, lower holding costs, better contractor relationships, bulk material discounts, and avoiding expensive delays.

Therefore, better funding often creates bigger profits than finding a slightly better deal. Investors who move quickly usually save money at every stage of the project.

The Best Investors Think Ahead

The best investors do not scramble for money halfway through a project. Instead, they prepare before they buy. They build systems. They create funding certainty. And they protect their profits with available money.

That is how real estate investing becomes less stressful and more profitable. Investors who prepare ahead of time usually sleep better and scale faster.

Final Thoughts: Build Your Funding Stack Before You Need It

If you want to grow in real estate investing, do not wait until a project goes bad to figure out your funding. Instead, build your money buckets early, create backup funding, keep liquid funds available, and plan for delays before they happen.

Remember, the goal is not just getting the deal. The real goal is finishing the deal fast, smoothly, and profitably. Because investors who control funding usually control the profits too.

Learn How to Build a Real Estate Funding Stack And Never Run Out of Money!Watch my most recent video today to find out more!

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What is Leverage Money in Real Estate?

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Building wealth is all about leverage in real estate investing. But what exactly is leverage money, and how can you use it correctly?

If you look at investing, it’s all about using other people’s money. It’s all about leverage. 

Understanding leverage and using it correctly is the key to unlocking the profits of real estate investing.

Why Leverage Matters

Leverage is the term we use for using someone else’s money (typically in the form of loans) to make a profit for yourself.

Frequently, you will also use a small amount of your own money. But leverage—the opportunities you can access with external funds—is what makes real estate investing accessible regardless of your personal wealth. 

Additionally, leverage allows investors to enter the market quickly, without needing to wait 5 years to save up for a downpayment.

If you know how to get money from others and use it to strategically turn a profit for yourself, you’ll be able to build income out of nearly nothing. 

Different Kinds of Leverage

Leverage comes in many forms:

  • Financial gifts
  • Loans
  • Mortgages
  • Liens
  • And more!

The most common form of real estate leverage is probably a classic mortgage. However, how you use that mortgage (and what you look for in a property) can make all the difference.

Looking for undervalued properties that owners are looking to sell quickly typically maximizes the ARV (After Repair Value). By getting a mortgage to cover the cost of the purchase price and leveraging those funds, you can fairly easily increase the value of the property and turn a profit on the resale (or rental).

Additionally, if you’re looking to buy a property that’s appraised under the market value, lenders are more likely to cover 100% of the purchase price (and sometimes a large piece of the renovations as well). 

How Far Can Leverage Take You?

In the current market, successful investing over the next few years is likely to have a huge payoff. 

Many real estate investors are even able to accumulate hefty retirement funds strictly through real estate investing in addition to annual income.

There are so many strategies you can use to build income with leverage:

  • Fix and flip (buy, fix, sell)
  • Renting (buy, fix, rent)
  • House hacking (buy, fix half, rent fixed half, fix other half with income from first half)

Even new investors can make quick progress if they use leverage wisely.

Recently, we had an investor from a smaller community who has already purchased 8 properties this year with little-to-no money down on each. They’ve been refinanced, rented, and are building her income. By the end of the year, she’ll probably have purchased anywhere from 10-15 properties. And she’s accomplished this by using other people’s money.

Of course, some markets are harder to work in and some communities move a little slower. 

But if you are committed to the game, and you pursue the best loans, you can build a successful business without emptying your pockets.

It’s all about finding the right leverage and using it wisely.

 

Read the full article here.

Watch the full video here:

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The Realtor 100 Program: Stop Listing, Start Buying Value-Add Properties

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Realtor 100 Program

Introducing the Realtor 100 Program!

As a realtor, you probably see a lot—like, A LOT–of properties cross your desk every week. And out of those properties, you’ve probably seen your fair share of sweet real estate deals.

Well, have you ever considered purchasing one of those value-add properties for yourself so you can flip it or keep it as a rental?

If so, we can help you stop listing and start buying with our Realtor 100 Program.

This real estate agent-only program is designed to help you make more money by boosting your cash flow and keeping your clients happy. It’s a win-win situation. You get to make more than your usual commission, AND you get to rescue clients who need to sell their home fast.

The Realtor 100 Program offers:

  • 100% financing
  • Fast closings
  • Fewer hiccups because you’ll buy properties as-is. That means you won’t need to worry about appraisals, lender inspections, funding conditions, slow underwriting and other issues that cause the entire process to grind to a halt.

Better yet, you can choose to close each investment deal in your own name, or a company name. And don’t worry about finding a business partner. That isn’t required to get the ball rolling on these kind of deals.

So, what are you waiting for? A new, innovative strategy to make more than your usual real estate agent commission is right at your fingertips! You just have to reach up and take hold of it.

Ready to get going today? Great! Our team is here and ready walk you through the Realtor 100 Program. Because we’re all eager to set you on a path that helps you make the kind of money you need…to live the life you want.

And, as always, remember that cash flow makes life flow.

Happy investing!

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How to Fund a Real Estate Deal: 5 Ways to Buy a Fix and Flip Property

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How to Fund Real Estate Deal: 5 Ways to Buy a Fix & Flip Property

How to Fund a Real Estate Deal: 5 Ways to Buy a Fix and Flip Property

A lot of people interested in real estate investing don’t know where to start when it comes to purchasing a value-add property. They can find a perfect house to fix and flip or rent, but they don’t know how to actually BUY the house.

Most think, “Well, I’ll just get a loan.”

But many quickly realize they don’t truly know what “getting a loan” means or where to even begin.

So, let’s take a quick look at the various types of real estate lenders you can rely on—and which ones you might have to rely on until you boost your credit score, build a real estate portfolio, or complete one of the other qualifications that some lenders require.

There are 5 different types of lenders, and each one has various pros and cons. Let’s start with the most simple and basic lenders.

Friend or Family Member

The upside to asking a friend or family member for a loan is, well, you’re asking a friend or family member for a loan. You know them, and you probably know them very well…well enough to ask them for money.  The only qualification you really need is a decent relationship.

The downside is, well, you know them. They’re your friend, your dad, your sister, or someone else you have deep roots with. That makes the entire loan process way more personal, which means there’s a lot of potential for drama—both now and in the future.

Business Partner

Instead of going through a family member or friend, you can get a business partner. A business partner can lend you the money to buy a value-add property with very few if any qualifications. The big pro here is they take on most—if not all—of the financial risks. It’s their money, not yours.

On the flip side, it’s their money, not yours. That means some business partners get greedy. Rather than splitting profits fairly, they demand the lion’s share. To them, it might not matter if you were the one who did all the actual work. They took the risk, so they should get a bigger reward at the end of the day.

Hard Money

If you have some basic qualifications, you can skip the first two lenders we’ve talked about and get a loan through a hard money lender. Hard money loans (aka, Fix and Flip loans) are great when you need to close a real estate deal FAST. We’re talking days instead of weeks or months.

Unfortunately, hard money can be expensive. Rates tend to be higher than other lenders. But every hard money lender varies, so it’s absolutely worth shopping around. Plus, hard money loans aren’t intended to be long term, so the high cost can actually save you a lot of pain AND money in the long run.

What is hard money? Check out our myth busting series on YouTube!

Banks

Banks are the most traditional lender out there. In fact, most real estate investors look to this type of lender before they consider any other. And, why not? Banks usually have the lowest rates available.

Unfortunately, banks also have the strictest requirements, and if you don’t meet those requirements, you’ll get rejected. Worse, the application process is a lot more in-depth, which means closing can take A LOT longer. Which means that perfect investment property you wanted gets snatched up by someone using a faster lender.

OPM

Aka, “Other People’s Money.” This is exactly how it sounds. You use other people’s money to buy a property. This is different than asking a family member, friend, or business partner for financial help because there are more boundaries. With OPM, a lender charges interest. That’s it. There aren’t points or profits involved. It’s simple and easy.

The only downside of OPM is finding those who are willing to lend their money to you. But that’s where gaining experience and knowledge in real estate investing helps. The more you know, the more you can prove you’re worth the investment.

So, there you have it. Those are the 5 ways to buy a fix and flip property. Each one has its pros and cons, but each one is a viable option. It just depends on YOU and your financial situation.

Bad credit? No credit? You might have to start with a family member, friend, or business partner

Great credit? Solid income? Extensive real estate portfolio? You probably can jump straight to hard money or a bank loan. Or, better yet, OPM.

Each investor has a different path.

Ready to find out what your path is? Great! Our team is here to help. We’re excited to set you on a path that helps you make the kind of money you need…to live the life you want.

Happy investing!

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What Is Cash Flow and Why You Need It

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What is cash flow

What is cash flow and why do you need it?

Well, let’s face it, when you have more money in your wallet, life’s a whole lot easier. Because you have MORE money in your wallet!

When you make passive income every month, you can:

  • Take your dream big trip to the Bahamas, Italy, or anywhere else in the world.
  • Buy the dream car you’ve always hoped to own.
  • Move to a better, safer neighborhood.
  • Or simply live more comfortably.

But before we go on, let’s answer the very common question, “What is cash flow? And how can I generate it?”

First of all, cash flow is exactly what it sounds like: cash flowing into your pocket. Just think about things like income, profits, and any other term you can think of that means adding money to your bank account every month.

There are many ways to produce cash flow, and there’s really no right or wrong way to produce it. Because everyone has a strategy that works best for them.

So, what are some of those strategies?

Well, you can:

  • Invest in value-add properties, like fix and flips and rentals.
  • Become a private lender to real estate investors.
  • Improve your credit score to make extra money each month. Because better credit scores mean lower interest rates. And lower interest rates mean cheaper bills. And cheaper bills mean less money out, and more money in.

As you can see, there are countless ways to approach cash flow. You just need to choose the best approach for you.

Ready to chat? Great. Our team is here to set you on a path that helps you make the kind of money you need to live the life you want.

Happy investing!

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Credit Score Tips: How To Reel in Thousands with Your Credit Score

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How to Reel in Thousands with Your Credit Score

Credit Score Tips: How to Reel in Thousands with Your Credit Score

Let’s dive into some credit score tips today.

Did you know your credit score is the bait in your life that will either catch big prizes…or big flops?

If you toss YOUR credit score in life’s lake, what can you expect to catch? Well, it depends on what you have in your tackle box. And what you have in your tackle box depends on how well you’ve taken care of your credit score.

For example, if you pay your monthly bills on time, keep your credit usage below 30%, and focus on building a good credit mix (meaning you have a house payment, a car payment, credit cards, insurance plans, etc.), then you probably have some excellent lures and juicy bait to toss in the water and catch something big!

We’re talking about your dream house, a new car, a heftier retirement account, and just about anything else you’ve hoped to have in your life.

Because the better your credit score, the lower your rates. And the lower your rates, the more money you accumulate over time.

Think about it. If you have a score of 760 or higher, then you’ll likely reel in at least an extra $250,000 by the time you retire. All because you paid lower interest rates than someone who had…well, bad bait.

Those who have bad bait in their tackle boxes tend to have scores under 650.

This kind of bait isn’t going to get chomped on. It won’t even get a lot of nibbles. In fact, the only thing these subpar credit scores will reel are rejections and high interest rates. Which means you won’t get to feast on a dreamy life. More likely, you’ll have to scrounge and struggle to get what you want. Be it a house, a car, a loan, or even a small retirement account.

And that extra $250,000 that people accumulate in their bank accounts when they use good bait? Forget about it!

But fear not!

The good, tasty bait is available to anyone who wants it. You just have to put your pole down and start working on boosting your credit score. Which isn’t even all that hard. It just takes a few quick, consistent steps to start raising it.

Again, think about:

  • Paying your bills on time every month
  • Keeping your credit usage under 30%
  • Getting a loan to help you pay off your credit cards

Check out some of our other videos for credit score boosting tips.

If your tackle box (aka, your credit score) needs a little help, our team is here to help. Because we truly believe everyone deserves to fish in a lake that’s filled with juicy prizes.

Happy investing!

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How to Make Money with a Bridge Loan

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How To Make Money with a Bridge Loan

How to Make Money with a Bridge Loan

Let’s talk about how you can make money with a bridge loan, especially if you’re stuck in a project or need temporary funding.

Now, you might be wondering, “What the heck is a bridge loan?” Well, it’s basically a short-term loan that closes a financial gap.

Let’s take a look at an example. If you have a hard money loan for a fix and flip or another value-add property, but you’ve run out of money, then this could be a perfect solution to help you finish it.

Because it’s way cheaper to get temporary funding than to get stuck in an expensive loan. It could take months or years for you to figure out a way to come up with the money to complete the project.

Not to mention dealing with the costs of an incomplete project. You have to think about things like materials, contractors, taxes, insurance…the list goes on and on.

Bridge loans also work great for starting a new project while waiting for current project to wrap up. You can use the equity in the current project to secure a new one. Once your current project closes, you can pay off the bridge loan and move on to your next real estate deal.

You can even use this type of funding to make a cash offer on a value-add property.

Essentially, a bridge loan is immediate cash flow.

It’s an excellent way to keep your projects moving along and your cash flow, well, flowing! Bridge loans prevent you and your bank account from growing stagnant—or worse, depleting. And that’s the last thing we want to see happen.

If you’re ready to chat about your options, we’re here to help! Our team is eager to set you on a path that helps you make the kind of money you need to live the life you want.

Happy investing!

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How The Cash Flow Company Can Help You Make More Money

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How The Cash Flow Company Can Help You Make More Money

How The Cash Flow Company Can Help You Make More Money

Discover how the Cash Flow Mortgage Company can help you make more money!

Attention all real estate investors! Investor Real Estate Loans has changed its name! We’re now The Cash Flow Company.

Our new business name represents exactly who we are and what we focus on: Cash flow!

As a mortgage company, we help clients achieve positive cash flow success through 3 key strategies:

  1. Reducing finance costs (we can help you do this monthly or over the life of your loan).
  2. Lowering down payments so you can keep more money in your pocket.
  3. Using quick, proven strategies to raise your credit score. Because better scores equal better rates. And better rates equal better products.

Our team continuously focuses on these 3 pillars of our business, because we want to make sure you have plenty of options to increase your cash flow.

Speaking of options, we offer real estate investors plenty of flexibility, too. For example, if you don’t have tax returns (or don’t want to use them), we provide a variety of loan products. Or if you need a real estate portfolio, we can show you how to build one. Or if you want to invest in real estate without breaking a sweat, we can teach you about OPM (Other People’s Money) and other hands-off investment options.

It’s all about finding ways to make you the most money possible. Because when you have positive cash flow, you can kick back and relax a lot more often.

Ready to chat? Great! Our teams is here and ready to help you out. We’re all eager to set you on a path that helps you make the kind of money you need to live the life you want.

Happy investing!

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Attention Real Estate Investors: Introducing The Cash Flow Company

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Attention Real Estate Investors: Introducing The Cash Flow Company

Attention Real Estate Investors: Introducing The Cash Flow Company!

At Investor Real Estate Loans, we decided it was time to change our name to convey who we REALLY are. That’s why we chose to call ourselves The Cash Flow Company.

Our new business name represents exactly who we are and what we focus on: Cash flow!

As a mortgage company, we strive to provide real estate investors with the best loans possible, meaning we offer plenty of options and flexibility. Because every investor is different and needs a loan that fits THEIR needs (not ours).

We help all of our clients achieve cash flow success through 3 key strategies:

  1. Lowering your finance costs. Because the lower costs, the more money you make.
  2. Lowering the amount you have to put into the purchase of a rental property. We like to call this the 2-Step Process, but some know it as BRRRR or a $0 down rental purchase. Whatever the case, it’s the correct way to handle the loan side of your investments, and it’s very important if you want to boost your cash flow.
  3. Use quick, proven strategies to raise your credit score. Why? Because the higher your credit score, the better your interest rates. And the better your interest rates, the more money you save every month. We like to call this your Return on Credit.

We strive to constantly focus on these 3 pillars of our business so that you have plenty of options to increase your cash flow. Because we’re eager to set you on a path that helps you make the kind of money you need to live the life you want.

Welcome to the new and improved Cash Flow Mortgage Company. We can’t wait to chat with you about your value-add plans!

Happy investing!

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How to Make More Money: 3 Cash Flow Strategies

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How to Make More Money: 3 Cash Flow Strategies

How to Make More Money: 3 Cash Flow Strategies

How can you make more money? Well, today, we’re going to explore 3 cash flow strategies that will make your wallet very happy.

First of all, when most of real estate investors think about real estate investing, they think cash flow!

But here’s the thing.

Everyone has a different definition of cash flow.

For example, what cash flow means to John might differ from what it means to Jane. And what Jane values might drastically differ from what Jack values.

Of course, even if their cash flow goals differ, there are a few similarities between John, Jane, and Jack. Those similarities include:

  • Using the BRRRR method
  • Buying discounted properties
  • Making money (obviously!)

Now, while John, Jane, and Jack might share a few similarities in the real estate world, they also share many differences, especially when it comes to generating positive cash flow.

What kind of differences are we talking about?

Well, let’s take a look at their 3 individual real estate methods:

  1. Less Money Down: John likes to focus on leverage. He wants to limit his initial outflow so he can keep more money in his pocket. This strategy tends to work best for him and other investors who want to break even every month with their tax write offs.
  2. Making monthly income: This cash flow strategy is probably most popular, because it’s all about making money every month. Jane, who likes to take this approach, doesn’t mind putting some money down at closing. She also has a reason for wanting to generate consistent income each month. For example, she might need it to supplement her current income, replacing a full-time job, going on a big vacation every summer, or another reason.
  3. Refinancing: While some investors want to see money flowing into their bank account every month, others, like Jack, prefer to wait 2 to 3 years to refinance—or whenever there’s a movement in equity. When equity rises, Jack likes to get his money out of a property to use for his life and/or to buy more value-add properties.

As you can see, cash flow comes in all shapes and sizes.

  • John focuses on less money down.
  • Jane focuses on monthly income.
  • Jack focuses on refinancing.

Is one real estate method better than the other? Absolutely not. All 3 are valid cash flow strategies. It just depends on which one works best for you and the lifestyle you want.

So, what’s your strategy?

Our team is here to discuss your options, create a personal strategy, and set you on the path to making the kind of money you need.

Happy investing!

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