Tag Archive for: real estate investing tips

2024 Housing Market Predictions: Why You Should Invest

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2024 Housing Market Predictions: Why You Should Invest

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

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

First, Focus on the Lower End of the Market 

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

Second, Create a Product that People will want to Buy

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

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

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

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

How has the market changed?

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

What should you Avoid?

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

Number of Real Estate Investors is Shrinking 

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

In Conclusion

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

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

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

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Why business credit cards make real estate investing easier

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Why business credit cards make real estate investing easier

70%-80% of investors are overwhelmed with business expenses and are resorting to using their personal credit. By using personal credit cards for business expenses, investors are jeopardizing their credit score and endangering the success of their business. How can you get your personal credit in good standing and back on track? What can you do to stabilize your business expenses? The answer to both of these questions is business credit cards. Let’s look closer at how they can make your life easier.

First, personal credit scores are no longer taking the hit.

While personal credit cards are easily accessible, they make life more complicated for investors. Whether it’s a fix and flip, or a rental property, expenses can easily add up and jeopardize your credit score. Putting expenses on personal credit cards drives down your score due to the utilization rate. This in turn makes everything harder, from trying to apply for a loan, to putting more money into the investment. The ultimate solution is business credit cards because they do not impact your credit score, nor do they have the same utilization rate restrictions. This is a simple step that every investor should be taking to alleviate future strain on personal credit scores.

Second, making things easier, faster, and cheaper

How can you make things easier, faster and cheaper for your business? The answer once again is applying for and using business credit cards! Once a card is established, you can start moving expenses over to consolidate balances, thus making your life easier. They have the same benefits as personal credit cards if not more! By using them more often and making payments in chunks, investors are able to increase their credit limits quickly. In doing so, personal credit scores will increase and create more leverage for additional loans, as well as create better funding options. 

Third, we are here to get you on track.

In having better credit scores, it then opens the door to endless possibilities that will create wealth. We can help you by providing a usage loan that can be used to pay down personal credit cards. With the utilization rate then decreased, your credit score will increase, allowing you to make the switch. We can help guide you through the entire process from setting up your business correctly, to researching credit cards, and provide usage loans to get you back on track. Don’t wait for corporate credit to take effect! Call or message us today to find out more.

Watch our most recent video to discover more about the importance of business credit cards and how we can help guide you to success.

 

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80% of Real Estate Investors fail at taking this step

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80% of Real Estate Investors fail at taking this step:

A looming problem that 70%-80% of investors are facing today, is the effect that business expenses are having on their personal credit. How can you make things easier, faster and cheaper? The answer is applying for and using business credit cards! This is a simple step that every investor should be taking to alleviate future strain on personal credit scores. In having better credit scores, it then opens the door to endless possibilities that will create wealth. Let’s look closer at how business credit cards can make your life easier both on the personal side, as well as on the business side.

1. What impacts investors’ personal credit score?

High credit scores are important for investors because it creates the leverage and funding they need to grow their business. Almost every investor runs up their personal credit card balance, by putting too many business charges on them. Thus, jeopardizing their personal credit score due to their credit utilization rate. For personal credit cards, MyFico only allows for a 20% utilization rate before it impacts your credit score. However, business credit cards do not have the same restrictions. Instead, you are able to use the entire credit limit without having to worry. In having better credit scores, it opens the door to endless possibilities that will create wealth.

2. What are the benefits of getting a business credit card?

Business credit cards are the most important thing that investors can do to ensure success. They not only provide funding, but also the leverage required to create further growth. Many investors have heard of corporate credit and have taken the steps to get started down that path. Unfortunately, this option results in years of hard work and multiple steps before any progress can be made. Business credit cards on the other hand, are quick to set up, extremely flexible, and most importantly they will not impact your credit score. Eliminate the cash crunch by separating your personal credit from your business.

3. How do low credit scores impact acceptance?

One challenge that many investors have, is that their personal credit is too low to apply for a business credit card. In this case, they need to pay down their credit card balances by using their savings, or they can take out a personal loan. How can real estate investors repair their credit score and help grow their business? By applying for a usage loan, investors can pay off credit card debt quickly and easily. This in turn allows them to qualify for fix and flip loans, DSCR loans, or other bank loans that can get the business back on track. 

4. What steps do you need to take to set up your business correctly?

The fourth and most important step is setting up your business properly. If it’s not, fix it now! In having your business set up correctly it will make it easier to access more lending options and increase your profits. How can you get on track and set up your business correctly? We are here to help by providing a 1-10 checklist for you to follow. This includes links to the Secretary of State, EIN information, and much more to help get the ball rolling. Our goal is to make it as easy and profitable as possible.

By using personal credit cards for business expenses, you are jeopardizing your credit score and endangering the success of your business. Do not join the 80% of real estate investors who fail. We can help guide you through the entire process from setting up your business correctly, to researching credit cards, and can even provide usage loans to get you back on track.

Watch our most recent video to discover more about the importance of business credit cards and how we can help guide you to success.

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The Real Estate Investor’s Battle: Hurdles and Solutions

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The Real Estate Investor’s Battle: Hurdles and Solutions

Do you want to use other people’s money to generate cash flow? Wondering what hurdles you will face along the way? Unfortunately people tend to get greedy and let emotions take over their investing decisions. They begin purchasing multiple properties in a short period of time, which is not always a profitable method. Investing is all about the numbers and determining whether a property will create cash flow, or will instead create spiraling debt. By setting your business up correctly and not letting your emotions take over, the sky’s the limit for your success. Let’s take a closer look at the real estate hurdles and the solutions that will get you back on track. 

First, limit the number of properties

We see so many people who want to do 5 or 6 deals a year. In doing so, they tend to lose money on at least 2 if not 3 of those properties. Thus resulting in investors breaking even, as opposed to making money. By taking on too much too quickly, investors fail to grow their money. It is possible in 3 years to obtain good wealth, but achieving it in one year is very difficult. Be strategic to ensure that you’re making money on each deal!

Second, regulate your emotions

80% to 90% of people either take on too much, or they let their emotions drive their business. Even though they know their numbers going into a deal, many investors let their emotions drive the bidding. This causes them to become overextended and unfortunately results in little to no profit on the property. Real estate investment is designed for everyone, however it’s only profitable for those who can take their energy and put it back into the property.

Third, leverage

It is imperative that you leave your emotions out of the deal and instead focus your attention on the leverage that your investment holds. As an investor, you have to understand how to use leverage properly in order to create income and generational wealth. While not everyone has $300K to start investing, you need to make sure that the property can pay for itself. For example, if a property is bringing in $4K and is only costing $2K, then you can feel comfortable taking on another mortgage without facing financial strain.  

Fourth, do your research 

Whether you are house hacking or joining a fellow investor, you need to make sure that you are comfortable with the numbers before diving in. It is important to research and compare properties prior to investing to determine if the investment will be profitable. Another component in this process is evaluating the property for sellability. Unfortunately there are a number of properties that have been fixed quickly or had things covered up for a fast sale. In knowing what you are looking for, you can save time and money by investing in a property that people want to buy. 

In conclusion

There is a reason that it’s “simple not easy” in real estate investing. You have to follow the process and take the steps until you feel comfortable enough to eliminate the emotions. This in turn will prevent you from getting into a situation that could jeopardize your success. Finally, by getting help from realtors, designers, or even finding ideas online, you can ensure that you have something that your audience will love. We can help you tackle the hurdles and find solutions to the challenges that are holding you back from achieving cash flow.

Watch our most recent video to find out more about Real Estate Investment Hurdles and Solutions

If you have any questions on liquidity, fix and flip loans, or any other real estate investment questions, please reach out to us!

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How to Make Lenders Happy: 5 Real Estate Investing Tips

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Five real estate investing tips to make sure you get the leverage to finish your projects. 

In real estate investing, leverage comes from using other people’s money to generate wealth and income. 

The better your leverage, the easier and more profitable real estate investing becomes. 

But how do you find the right loans that can give you that leverage?

Here are 5 real estate investing tips from our experts at The Cash Flow Company to help get you where you need to go:

Tip #1: Tell the Truth

This may seem basic, but it can be really tempting to slip in a few lies when you’re trying to get a deal. Don’t do it.

Lenders do background checks, look at credit, and generally get external confirmation for everything you tell them. Lying not only makes their jobs harder, but your lack of honesty can ruin your reputation with that lender.

It’s better to be honest about a bad credit score and have a detailed plan about how to fix it than to lie. 

Make sure you disclose if you’ve gone through bankruptcy or if you have any credit card debt. 

They will find out if you’re hiding information or stretching the truth, and you’ll get dumped to the bottom of the pile.

Tip #2: Know Your Real Estate Lingo

This can be tough for new players. We recently created a list of some of the most common real estate lingo that new investors will encounter. 

Knowing terms like LTV, ARV, DSCR, Prepayments, etc. before you meet with prospective lenders shows that you’ve put in the time to educate yourself. 

Understand the numbers that go into making profits, including realtor fees, interest, and escrows. You should have a basic understanding of everything that goes into a project before seeking a lender. 

Resources like our YouTube channel or Investopedia can also help you learn the ins and outs of real estate jargon.

Tip #3: Raise Your Credit Score

One of the first things lenders look at is credit score. That score is often a determining factor in whether you even get considered for a loan.

If credit score is something you’re concerned about, there are ways to raise your score, including looking into usage loans. 

The better the score, the better terms you’ll be offered. The better the terms, the better your leverage. 

If you have questions about raising your score or are interested in discussing a usage loan, you can contact us here, and we’ll be happy to discuss your options.

Tip #4: Be Personally Invested

If you’re also investing your own money in your project, lenders know you’re serious about the job. 

Using other people’s money (OPM) also demonstrates that your friends and family are willing to invest in your project. Lenders like to see you have skin in the game, even if it’s as simple as borrowing from a line of credit.

Especially if you’re a newer investor, the less you ask of lenders and the more at risk you take on, the more lenders will be attracted to you.

Tip #5: Shop Around For Good Deals

The 2024 real estate market is setting up to be a profitable one for investors. 

Shop around and be selective so you pick the best deals. It’s better to find two really good deals in a year that you can complete than to overextend and not follow through.

This step can take a lot of time and effort, but it’s worth it. Just as lenders are selective with the investors they back, you should also be selective as you look for properties and lenders. 

How We Can Help

As we said earlier, leverage is key.

Knowing these real estate investing tips can help you make your lenders happy so you can start productive cash flow:

  • Be honest
  • Learn the language
  • Work on your credit score
  • Keep it personal
  • Hunt for the right deals

Real estate investing takes time and hard work, but it’s a great way to create generational wealth. 

We have a ton of free tools to download that will help you prepare for these investment opportunities.

If you have questions about these tips or how to get leverage, we’re happy to help. Just reach out to us at Info@TheCashFlowCompany.com.

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