Tag Archive for: OPM

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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The 100% Financing System Every Fix & Flipper Needs

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Fix and Flips: What They Really Cost (And What You Actually Make)

Most new real estate investors believe 100% financing means one lender covers the whole project. However, that is usually not true. In reality, “The 100% Financing System Every Fix & Flipper Needs” is not one loan. Instead, it is a full system built to cover every part of the project from purchase to sale.

In most fix-and-flip deals, the lender may fund 80% to 90% of the purchase price and 100% of the rehab costs. At first, that sounds like everything is covered. Still, there are many other costs investors forget to plan for.

For example, investors still need money for closing costs, insurance, monthly payments, utilities, contractor deposits, and surprise repairs. In addition, many projects run into escrow gaps where work must get completed before the lender releases funds. Because of that, investors often need extra available money just to keep the project moving.

That is why true 100% financing is really about building a funding stack. The best investors understand this early. As a result, they finish projects faster, avoid delays, and protect more profit along the way.

What True 100% Financing Really Means

True 100% financing means having access to every dollar needed from the day you close until the day you sell or refinance the property. In other words, the project never slows down because of money problems.

Let’s look at a simple example. Imagine you buy a property for $150,000 and plan a $50,000 rehab. Most people think they only need $200,000 to complete the project. However, that number misses many real-world costs.

You still need to plan for:

  • Closing costs
  • Carry costs
  • Insurance
  • Utility bills
  • Escrow gaps
  • Contractor payments
  • Repair overruns
  • Appliances
  • Landscaping
  • Holding costs

Because of that, experienced investors often plan for about 120% of the purchase and rehab budget. Therefore, a $200,000 project may really need about $240,000 available to keep everything running smoothly.

That extra money protects the deal. More importantly, it protects your timeline.

Why Speed Matters So Much in Fix and Flips

In real estate investing, speed creates profit. On the other hand, delays destroy profit very quickly.

Every extra month costs money. Loan payments continue. Insurance continues. Utilities continue. Taxes continue. Meanwhile, contractors may leave for other jobs if they are not paid on time.

For example, one investor may have all the funds ready before the project begins. Their contractor stays busy, materials arrive on time, and the home gets listed in six weeks. Another investor may spend months trying to piece together funding during the project. As a result, contractors stop showing up, projects slow down, and profits shrink month after month.

Many investors do not realize how much delays cost until it is too late. A project delayed by four to six months can easily lose tens of thousands of dollars in payments, holding costs, and missed market opportunities. That is why proper funding is not just about buying properties. It is about protecting profits by moving fast.

The Biggest Mistake New Flippers Make

Many new investors focus only on finding a cheap property. While buying right matters, funding matters just as much. A great deal with poor funding can still become a bad investment.

For example, some investors buy a property first and then try to figure out the rest later. They use personal credit cards, borrow small amounts from friends, or wait for escrow draws before paying contractors. Unfortunately, this usually creates stress and delays.

Instead, smart investors build the funding system first. Then they buy the property knowing they can finish the project quickly and safely. That confidence changes everything. It helps investors make better decisions, move faster, and avoid panic during the rehab process.

The 100% Financing System Explained

The best investors use multiple “money buckets” to create true 100% financing. Each money bucket serves a different purpose. Together, they help keep projects moving from start to finish.

The first bucket is usually the main fix-and-flip loan. This loan often covers most of the purchase price along with the rehab costs. However, the loan rarely covers everything else needed during the project.

That is where the additional funding buckets come in.

Many investors use HELOCs, business lines of credit, or personal lines of credit to fill the gaps. These tools help cover closing costs, contractor deposits, escrow gaps, and unexpected repairs. The nice part is you only pay interest when you use the money. Therefore, these lines can sit available in the background until needed.

Business credit cards can also help when used correctly. Investors often use them for materials, small project costs, and short-term expenses. In addition, some business cards offer rewards, cash back, or travel points. More importantly, many business cards do not report balances to personal credit. As a result, investors can protect their credit scores while still keeping projects moving.

Why Private Money Can Change Everything

Another powerful funding bucket is real private money. This simply means borrowing from real people instead of traditional banks.

For example, some people have savings accounts or retirement funds earning very little interest. Meanwhile, investors may need short-term project funding. Therefore, private money can create a win for both sides when the deal is structured correctly.

Many successful investors build relationships with people who want better returns without actively managing rental properties or flips themselves. These relationships can become one of the strongest parts of a long-term investing business.

Of course, private money still requires responsibility. Investors must run their numbers carefully and make sure the deal works before borrowing funds. Good funding supports a good deal. However, no funding system can save a bad project.

Real Estate Investing Is a Business

One of the biggest mindset shifts for new investors is understanding that real estate investing is a real business. Businesses need systems, reserves, planning, and available capital.

That is why experienced investors prepare before they buy their next deal. They build their lines of credit early, improve their business credit, and create relationships with lenders and private money partners. Most importantly, they make sure they have enough available funds to handle surprises without slowing the project down.

The goal is not endless debt. Instead, the goal is smart funding that helps projects move quickly and profitably. Then, once the property sells or refinances, the investor pays off the lines, cards, and short-term funding used during the project.

That is how successful investors continue growing without getting trapped by debt.

The Real Goal of the 100% Financing System

The real goal of the 100% financing system is simple. Investors want to complete projects faster, reduce stress, and protect profits.

When funding is ready ahead of time, projects move smoother. Contractors stay busy. Materials arrive faster. Escrow delays become smaller problems instead of full project shutdowns.

Most importantly, investors stop operating from fear. Instead, they gain clarity and confidence because they know their funding system can support the deal from beginning to end.

In fix-and-flip investing, time truly is money. Therefore, the investors who prepare their funding first often create the biggest long-term success.

Watch my most recent video to find out more about: The 100% Financing System Every Fix & Flipper Needs

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How to Open the Vault to Real Estate Success

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Most real estate investors want to win. But only a few actually do. Why? Because they’ve figured out the right combination. If you’re wondering how to open the vault to real estate success, it all comes down to these three simple things:

  • The right property

  • The right main funding

  • The right available funds

Let’s walk through how to line these up and crack the code—just like the top 5% of real estate investors.

Step 1: The Property – Find the Right Deal

Everything starts with the deal. The property is the first number in the combination.

Sometimes it’s a simple, fast flip in a hot market. Other times, it’s a unique deal in a rural area or something that must close in 3 days. No matter what, each property is different—and each one requires a slightly different strategy.

Here’s the key: The profit is in the purchase. If you buy it right, you’re already on your way to success.

Examples:

  • A cookie-cutter flip you can relist in 3 weeks? That’s a great fast win.

  • A wholesaler deal that fell through and needs to close fast? That’s your chance to negotiate.

  • A larger project or something out of the box? You’ll need the right lender to match.

So the first part of how to open the vault to real estate success is knowing what kind of property you’re dealing with—and planning your next two steps around it.

Step 2: The Main Lender – Match It to the Deal

Now that you’ve found a good deal, you need the right lender. That’s your second number in the combo.

The lender you use depends on what the property needs:

  • Quick close in 3 days? You’ll need a fast private or hard money lender.

  • Tight profit margin? Then low-cost funding is a must.

  • Big rehab budget? Make sure the lender covers repairs.

Your main lender should be able to do most of the heavy lifting—usually 90% of the purchase and 100% of the rehab. But not all lenders fit every property. That’s why real estate investors who succeed have multiple lenders lined up, ready for different situations.

Remember, if the lender can’t get the job done, your profits vanish. So always match your lender to your deal.

Step 3: Available Funds – Be Ready to Move Fast

The final number in the combo is your available funds. This is what keeps everything moving. Without it, the vault stays closed.

These are the funds you’ll need to cover:

  • Down payments

  • Closing costs

  • Insurance

  • Escrows

  • Surprise expenses

Too many investors wait until the last minute. They scramble. They borrow from the wrong place. Or worse, the deal stalls and eats up their time and energy.

Your funds can come from anywhere—lines of credit, credit cards, HELOCs, savings, partners, or a mix of them all. What matters is being ready before the deal lands in your lap.

This is where most people miss out. But if you prepare in advance, you’ll be ready to act when the right deal pops up.

Real Success Means Being Prepared

Here’s the truth: How to open the vault to real estate success is not about luck. It’s about being prepared.

You need:

  1. A good property

  2. The right lender

  3. Funds that are ready to go

That’s how the top 5% do it. They move fast. They close deals. And they put more money in the bank with every project.

Want Help Opening Your Vault?

If you’re ready to stop missing deals and start unlocking profits, we can help. Download our free ebook on 100% financing and explore more free tools at The Cash Flow Company.

We’re here to help you understand the funding side, so you can spend your time where it matters—finding great properties.

So, next time you wonder how to open the vault to real estate success, just remember:
Line up the deal. Line up the funding. Line up the money.
Then, crack the combo and go enjoy life.

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The Six Money Buckets You Need in Real Estate Investing

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The Six Money Buckets You Need in Real Estate Investing

As a real estate investor, it’s crucial to always be ready for opportunities. Successful investors have two key secrets: always looking for properties and being prepared to buy them. Now, let’s dive into the six money buckets that help them stay ready.

1. Other People’s Money (OPM)

Firstly, consider Other People’s Money (OPM). This includes family, friends, and other investors. They can lend you money without credit or income checks. For example, if you need $20,000 for a down payment, you can call someone from your OPM bucket. You might offer them a return of 8-12%, which is better than what they’d get from a bank.

2. Home Equity Lines of Credit (HELOCs)

Next, think about Home Equity Lines of Credit (HELOCs). If you have equity in your home or rental properties, a HELOC can be a flexible funding source. For instance, you can use a HELOC to withdraw money for down payments or to fix up properties. The best part is, you only pay interest on what you use.

3. Business Credit Cards

Moreover, business credit cards are a fantastic tool. Unlike personal credit cards, they don’t affect your personal credit score. This helps keep your credit in good shape for future loans. For example, you can use these cards to pay for repairs or other expenses without impacting your credit score.

4. Hard Money Lenders

Then, there are Hard Money Lenders. These lenders don’t focus on your credit or experience. They can lend you more money for flips or 100% for BRRR projects. Because of their flexibility, they are great for deals in remote areas or properties that need significant work.

5. Private Lenders

Additionally, Private Lenders are essential. They provide loans without needing your tax returns. For example, private lenders like Kiavi or RCN Capital might offer 90% of the purchase price and 100% of rehab costs. While they take longer to close, they are less costly than hard money lenders.

6. Local Banks

Finally, don’t forget Local Banks. They usually offer lower rates and fewer points. They might take longer to close, but they can be great for projects that aren’t time-sensitive. For example, if you’re planning a major renovation, a local bank’s loan might be perfect.

Conclusion

In conclusion, having these six money buckets at your disposal can make you a more flexible and prepared investor. Each bucket serves a different purpose and offers unique benefits. By building and maintaining these funding sources, you can ensure you’re always ready to seize opportunities and grow your real estate business.

For more tips and tools, visit The Cash Flow Company. Here, you’ll find resources like our deal analyzer and a detailed guide on money buckets to help you succeed.

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Real Estate Investing Success: The Secret Formula Revealed

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Real Estate Investing Success: The Secret Formula Revealed

Real estate investing can be incredibly rewarding, but what’s the secret formula for success? The top investors follow two key principles. First, they are always on the lookout for properties. Second, they ensure they have the funding ready to seize opportunities when they arise. Let’s dive into these secrets and how you can use them to your advantage.

Always Be Looking for Properties

Top investors never stop searching for properties. They know that good deals can appear anytime and anywhere. In order to be successful, you must develop a habit of constantly scanning the market, attending open houses, and networking with real estate agents, as well as wholesalers.

Be Ready with Money

Besides searching for properties, the second key to success is having the money ready to buy properties quickly. This brings us to the concept of a “funding stack.” Top investors have multiple funding options lined up so they can act fast when a deal comes along. Let’s explore these funding options.

1. Other People’s Money (OPM)

Using OPM means borrowing money from family, friends, or other investors. This method often involves no credit checks or income verification. Therefore, if you present a good deal, people will be willing to invest.

Example: Borrow $20,000 from a friend for a down payment, promising an 8-12% return, which is better than the 3-5% they’d get from a bank.

2. Home Equity Line of Credit (HELOC)

A HELOC, or home equity line of credit, allows you to borrow against the equity in your home or rental properties. This is like a credit card where you can withdraw money as needed, making it perfect for down payments, renovations, or purchases.

Example: Use a HELOC to withdraw funds to buy a fixer-upper, then pay it back as you flip and sell the property.

3. Business Credit Cards

Business credit cards are crucial as they offer financial flexibility without affecting your personal credit score. These cards can cover expenses such as materials and labor for your real estate projects.

Example: By using a business credit card for rehab projects, you can in turn avoid the impact on your personal credit score while keeping your finances organized.

4. Hard Money Lenders

Hard money lenders provide short-term loans based on the property’s value rather than personal credit scores. They are more flexible and can close deals quickly. This makes them ideal for flips or urgent purchases.

Example: Secure a hard money loan in order to purchase and renovate a property that is in a remote area. Properties that are more remote are often avoided by traditional banks.

5. Private Lenders

Private lenders are national companies that offer loans without requiring extensive documentation such as tax returns. They often provide up to 90% of the purchase price and can cover 100% of the renovation costs.

Example: Use a private lender to buy a rental property. Then use OPM or a HELOC to cover the down payment and renovation costs.

6. Local Banks

Local banks often have favorable terms for real estate investors. Although they may take longer to process loans, they offer lower rates and can provide lines of credit for future purchases.

Example: Partner with a local bank to secure a line of credit. This gives you the flexibility to buy new properties or cover ongoing project costs.

Building Your Funding Stack

In order to build your funding stack, start with the most flexible options. These include OPM and business credit cards. As you grow you can begin to incorporate HELOCs, hard money lenders, private lenders, and local banks. In doing so, you’ll be prepared for any opportunity that comes your way.

Conclusion

Success in real estate investing comes down to two things: always looking for properties and being ready with the funding to buy them. By building a robust funding stack, you can ensure you’re always prepared to seize the best deals and grow your wealth exponentially.

For more information and resources, visit The Cash Flow Company website. You’ll find tools like our Deal Analyzer and a comprehensive guide to building your funding stack.

Watch our most recent video to find out more about: Real Estate Investing Success: The Secret Formula Revealed

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

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

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

Don’t let financing restrictions keep you down!

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

OPM can benefit everyone! 

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

Follow the golden rule to succeed in this game!

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

What can OPM be used for?

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

Now is the time to set yourself up to win! 

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

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

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How to Protect Your Peer Lenders

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How to Protect Your Peer Lenders

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

There is something for everyone.

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

How can you guarantee success? 

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

Make the lending switch today!

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

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

Watch our most recent clip to find out more!

 

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Why You Should Use Peer to Peer Lending

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Why You Should Use Peer to Peer Lending

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

Removing the middle man.

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

There is something for everyone.

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

Make the lending switch today!

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

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

Watch our most recent clip to find out more!

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What is Peer to Peer Lending For Real Estate Investing

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What is Peer to Peer Lending For Real Estate Investing

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

Removing the middle man.

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

There is something for everyone.

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

How can you guarantee success? 

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

Make the lending switch today!

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

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

Watch our most recent clip to find out more!

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What is Peer to Peer Lending and Why You Need It?

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What is Peer to Peer Lending and Why You Need It

What exactly is peer to peer lending and why do investors need it? Peer to peer lending, also known as other people’s money, is funding that is provided by family, friends, or individuals within the community to help you in your investments. Here at The Cash Flow Company, we have done about a billion dollars over the past 23 years using peer to peer lending. The majority of this money is not from family and friends, but instead from other people who are interested in making a good return. Investors and business owners are looking for other sources for their financial needs, which is where peer to peer lending can be an excellent alternative to traditional bank loans.

Who makes up the peer to peer lending community?

Peer to peer means that working with other people in the community who have just as big of a need as you do. These individuals might be in your church or individuals who are in retirement and need some extra income. They might have some money in a 401K, IRA, or extra savings that they would rather lend to you. Whether it’s 6%, 7%, or even 8% secured, it can help you with closing costs, while helping them get a better return on their money. 

Peer to peer is replacing banks.

We all know what is happening out there with affordability. The banks are starting to change their requirements, DSCR is getting into the 9% and 10% range, and fix and flip loans are anywhere between 11% and 13%. This lending squeeze is causing affordability, terms, and credit score requirements to all become tougher as well. Which creates the perfect opportunity to reintroduce peer to peer lending, which is something that has been around since before banking began. Peer to peer lending is taking out the banks and allowing people to begin working with humans again. 

Peer to peer gets deals done quickly.

Every good investor always has a few peer to peer lenders that they work with on a regular basis. These are individuals that the investors have built a good reputation with, and proved that they can produce quality work. By creating this foundation, it allows investors to act quickly on deals that come available instead of waiting for the bank’s approval. Peer to peer lenders also benefit because they are able to use money from their savings accounts or retirement accounts in order to get a better return that is something secured. It’s a great win-win situation for everyone!

Something for everyone.

Every investor or business owner should look into peer to peer lending. Even if it is just for a down payment, fix up cost, or any other expense in the real estate world. Businesses could also benefit from peer to peer lending for start up costs or unexpected business expenses. It doesn’t have to be $500K, but it could be! With lending becoming tighter, banks could require an additional 10%. In that case, where would you go for the additional money? The answer is peer to peer! There are all kinds of people out there with pockets full of money. You just need to find one that has what you are needing.

No need to make things awkward

Again, peer to peer lending is funding that is provided by family, friends, or individuals within the community to help you in your investments. While we all know that borrowing money can create an uncomfortable situation, there are three steps you should follow to prevent this from occurring.

  • Make sure you are putting them in good deals both now and in the future. 

These are deals that have a good chance of cash flowing. This can be done by making sure you have a good ARV or After Repair Value before jumping into a deal. 

  • Make sure you do the proper paperwork. 

Proper paperwork  includes a real note, a mortgage, or a deed of trust that’s secured on a property. If you do it right and secure it with real estate, then they are in a good position as a lender.

  • Get out there and mingle.

You need to get out there and talk to real estate groups.  Find out what they are doing, and who they are using for their peer to peer lenders. There are a ton of people who want to get into real estate, but they don’t want to get into the real estate game. Instead they just want a better return.

Start the process and do it right.

If you are a good keeper of other people’s money, then it will expand. You have to start the process, do it correctly, and come up with a good package to present to them. What should you include in your package or portfolio? Let’s take a look.

  • What the property looks like
  • Estimate of what the rent will be
  • Include comps and additional research
  • Proper documentation 
  • Your plans for the property (rent or keep)
  • How the investment will be secured

Don’t take the cheapest path.

People try to take the cheap way out by not wanting to pay for the title, or record a deed because it’s going to cost money. The truth is, that all of those things are going to happen if you use a traditional lender. However, banks are going to charge more with higher interest rates. The better you make your peer to peer lender feel on the first few deals, the better the process will be in the future. It is imperative that you treat them like a real lender so that everything is official and secure. If it is done correctly, it will build a bridge that may bring more friends later on. Just to clarify, more friends does not mean adding more people onto a single note. Instead, these additional peer to peer lenders can be used separately for future investment opportunities. 

Peer to peer keeps things simple.

We want to keep it simple and find the people that fit your needs. Not everyone needs $300K or $500K. They might just need $35K or $50K to get their business going. While they do have real estate to secure a loan, they might not have the income that the bank requires. That is where peer to peer lending comes in. Most peer to peer lenders don’t care what your income is. They want to know what the property looks like, if it will protect their money, and what you are going to pay them. Another way to look at peer to peer lending is like a personal DSCR. A DSCR doesn’t care about your income either. With the high interest rates of DSCR in this market, peer to peer lending is a comparable option for investors with rental properties.

Double your money!

Peer to peer is so important for those who are lending. They can easily make $8K on $100K. Banks on the other hand, would only have a return of $4K to $5K on the same amount if it were in a CD or savings account. Peer to peer lenders could easily double what they are making without having to worry about the inconsistency of the stock market. This is a time when things are tightening and people are having to look for new opportunities. Those who are prepared, ready, and have money, will succeed. 

Where do you start? We can help!

If you want to find out more about peer to peer lending and how to get started reach out to us. We have developed methods for both borrowers and lenders that will walk you through the process of getting started. We want to make sure that this market grows and that we get rid of some of the lenders and bankers out there. This will result in more money going into peoples accounts! The better it grows, the bigger it grows, and the more options people will have for their future. Our target is to make it a win-win for both peer to peer borrowers and peer to peer lenders. 

Contact us today to find out more about the lowest risk lending option with the best return! 

Watch our most recent video explaining What is Peer to Peer Lending and Why You Need It

We have created an excellent resource site for you to discover more about peer to peer lending. This information can be found at www.TheNoteShop.com.

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