Tag Archive for: real estate investing

What is an Interest-Only Loan?

Categories:

What is an Interest-Only Loan?

Are you a real estate investor looking for ways to boost your cash flow and make your investments more manageable? If so, you might want to consider an interest-only loan. These loans are becoming more popular among investors who want lower monthly payments and more flexibility with their finances.

How Does an Interest-Only Loan Work?

For the first few years (usually 5, 7, or 10 years), you only pay interest. After this period, you start paying both interest and principal. This means your payments will go up, but by then, you might be earning more rent or have other ways to cover the higher payments. Consequently, you can plan your finances better knowing when the higher payments will begin.

When is an Interest-Only Loan a Good Idea?

Interest-only loans can be great for:

  • Investors wanting to improve cash flow: Lower payments mean more money in your pocket each month. Therefore, you can handle your financial obligations more easily.
  • People planning to sell or refinance soon: If you plan to sell or refinance before the interest-only period ends, you can benefit from lower payments without worrying about the higher payments later. Thus, this can be a strategic move to maximize your investment.
  • Short-term projects: If you’re working on a project that will increase your income soon, like renovating a property to increase rent, this can help bridge the gap. As a result, you can complete your projects without financial strain.

Example:

Let’s say you own a rental property, but your current loan payments are too high compared to your rental income. By switching to an interest-only loan, your monthly payments go down. This helps you qualify for more loans, improve cash flow, and even take out more money to invest in another property. Consequently, you can grow your investment portfolio more effectively.

Conclusion

In conclusion, interest-only loans can be a powerful tool for real estate investors. They offer better cash flow, easier loan qualification, and more flexibility with your money. If you think an interest-only loan might be right for you, talk to a lender or financial advisor to explore your options. Therefore, taking advantage of interest-only loans can help you achieve your real estate investment goals more efficiently.

Ready to explore interest-only loans further? Visit our website, TheCashFlowCompany.com, to learn more. We offer a simple inquiry form where you can share your details. Don’t worry, we don’t do hard credit pulls or make frequent calls. We’re here to provide helpful advice and see if an interest-only loan is right for you. If it works, great! If not, no pressure.

Watch our most recent video to find out more about: What is an Interest-Only Loan?

by

Top 3 Benefits for Real Estate Investors

Categories:

Intro to Interest Only Loans: Top 3 Benefits for Real Estate Investors

Interest-only loans are becoming a popular choice for real estate investors. Why? Because they offer unique advantages that can make a big difference in your investment strategy. Today we will explore the top three benefits of interest-only loans and how they can help you qualify more easily, improve your cash flow, and access larger loan amounts. Let’s dive in and see why an interest-only loan might be the right move for your next investment.

What is an Interest Only Loan?

An interest-only loan is exactly what it sounds like. You only pay the interest on the loan for a set period of time. Unlike typical mortgages where you pay both interest and a bit of the principal, an interest-only loan keeps your payments low by only covering the interest.

Benefits of Interest Only Loans

Interest-only loans offer several advantages, especially in today’s market. Here are the top three benefits for real estate investors:

1. Easier Qualification

One of the biggest benefits of an interest-only loan is that it can make it easier to qualify for financing.

Example: Let’s say you want to buy a rental property, but the current rent isn’t high enough to qualify for a regular loan. By switching to an interest-only loan, your monthly payments are lower. As a result, this reduces your expenses and improves your chances of meeting the lender’s requirements.

2. Improved Cash Flow

Next, interest-only loans can significantly boost your cash flow. With lower monthly payments, you have more money available each month.

Example: Imagine you own several rental properties. With an interest-only loan, your payments are smaller, giving you more cash each month. Consequently, this extra money can be used for renovations, paying off other debts, or simply enjoying a higher income.

3. Greater Loan Amounts

Finally, interest-only loans can help you access larger loan amounts. Since your payments are lower, you might qualify for more money.

Example: Suppose you’re an investor looking to cash out on a property to fund another project. By opting for an interest-only loan, you reduce your payments and can pull out more cash. This gives you the capital needed to start your next investment sooner.

How to Get Started with an Interest Only Loan

Ready to explore interest-only loans further? Visit our website, TheCashFlowCompany.com, to learn more. We offer a simple inquiry form where you can share your details. Don’t worry, we don’t do hard credit pulls or make frequent calls. We’re here to provide helpful advice and see if an interest-only loan is right for you. If it works, great! If not, no pressure.

In conclusion, interest-only loans are a fantastic tool in the right market and for the right investor. They help you qualify easier, improve your cash flow, and access more funds. Whether you’re building, renovating, or just want better cash flow, consider if an interest-only loan fits your strategy.

Watch our most recent video to find out more about: Intro to Interest Only Loans: Top 3 Benefits for Real Estate Investors

 

by

How Can I Qualify for a Loan for My Real Estate Investments?

Categories:

How Can I Qualify for a Loan for My Real Estate Investments?

Today we are going to answer one of the biggest questions that real estate investors have, “How can I qualify for a loan for my real estate investments?” Thankfully there are a multitude of products available for investors to not only purchase new properties, but to refinance as well. Whether or not you have a job, just changed jobs, or write everything off on your taxes, there are products out there for you. What are your options and how do you get started? Let’s take a closer look!

Your best loan option!

One of the most versatile loan options available for investors is a DSCR loan. A DSCR loan is only available to investors and stands for the debt service coverage ratio. How do you qualify? As long as your rental property will cover the debt, you will be able to qualify for a DSCR loan. Unlike traditional loans, a DSCR loan will not take into consideration when you started your job or how long you’ve been self-employed. Instead, the lender’s primary focus is whether or not the income from the property qualifies for the loan.

What does DSCR mean?

The debt service coverage ratio is where your property breaks even. Just to clarify, that is when the income from the property and the expenses break even. While every property has a different break even point, this is the value that lenders will be looking at to determine whether or not the property qualifies for a DSCR loan. The expenses that lenders take into consideration are the mortgage payment (including interest), taxes, insurance, flood, and HOA. For example, if your rent is $1,000, then your expenses need to be $1,000 or less in order to qualify for a DSCR loan. The best scenario would be if your rents were $1,500 and the expenses were $1,000. This would create a $500 cash flow for the property.

Find the versatility you need to succeed.

Nowadays, DSCR loans are not only for 1 to 4 unit  properties. Instead DSCR loans can cover 8 to 10 unit properties and even mixed use properties! That’s not all! There are also a lot of refinancing options available for investors who want to get cash out of their properties. Don’t miss out on this best kept real estate secret! Find the best product today that not only provides ultimate flexibility but meets all of your investment needs as well. 

Contact us today!

Here at The Cash Flow Company we are happy to run through the numbers with you to see what product is best for you. Contact us today to find out more about how you can qualify!

Watch our most recent video: How Can I Qualify for a Loan for My Real Estate Investments? 

by

Personal Credit vs Business Credit: When and Where to Start

Categories:

Personal Credit vs Business Credit: When and Where to Start

Here at The Cash Flow Company we have seen so many people become overwhelmed and confused by credit! Alex Erlich, a credit advisor and educator, is joining us today to discuss personal credit vs business credit with a focus on when and where to start. Don’t let the numbers overwhelm you! We are here to help walk you through the process!  

The importance of planning ahead!

In order to be successful in real estate investing it is important that you plan ahead. There is a common expression stating that “you should always get things before you need them, because when you most need them you’re least likely to get them.” This is especially true in real estate investing. Investors who got lines of credit a few years ago will be at a greater advantage than those who are trying to get them now. Those who apply now will need to be in a better position with their personal credit in order to be approved for the same products. 

Separating personal and business credit.

By separating personal and business credit, it will prevent further strain on your personal credit, increase loan eligibility, and create more leverage. What exactly do we mean by leverage? Leverage is how much you are eligible for and what it looks like on paper. Leverage is the King in real estate. Having more leverage allows for more opportunities, not only your business, but for your personal life as well. 

The ideal Credit Score

MyFico.com is the best place to obtain credit score information. This site not only provides an overall credit score, but it also separates scores into 40 different categories. It can be an information overload, however, by going straight to the source it provides you a cost free and spam free way to gather all of the information you need. So what is the ideal credit score that lenders are looking for? The ideal credit score range should be between 680 and 720. However, with the current economy, banks are increasing their minimum requirements to 720 and above. How do you get from 680 to 720? We can help you discover ways to improve your scores quickly to get you back in the game.

Don’t let your personal credit score impact your business success!

The faster you can separate your personal credit from your business credit, the better your personal credit score will be. We can guide you through the steps. From establishing your business, to finding the right business credit cards, and even providing a 911 loan, we have the tools to help you win.

Contact us today to find out more about setting yourself up for success.

Watch our most recent video to find out more about Personal Credit vs Business Credit: When and Where to Start

by

How to retire by 65 years old

Categories:

How to retire by 65 years old

Today we are going to discuss how to retire by 65 years old! Nowadays many people are getting into real estate investing later in life because they are trying to build wealth for retirement. This additional pocket of money not only provides additional options for them, but financial security as well. Are you interested in building wealth, increasing your cash flow, and retiring by 65? Let’s take a closer look at why it is never too late to invest in real estate!

Example: Making money for later

Within three short years you can set yourself up for the future that you want! After you have purchased the properties, you can then begin to pay them off. Just to clarify, the only things that you would need to pay are the taxes and the insurance once the properties are paid off. Here is an example of how you can create the options and security you need before age 65!

Number of properties 10
Cash flow $300 (per property) or $3000 (10 properties) 
Property #1 Paid off in 5 years
Property #2  Paid off using Property #1 
Property #3 Paid off using Property #2
By age 65 You own 3 properties free and clear! 
Property #1, #2, and #3  Worth $400K each totaling $1.2 million
Property #1, #2, and #3  They bring in $2100 each per month

Supplemental income options.

First, the money that you are making off of the rental properties can supplement social security as well as retirement. A second option is to take out a new loan. This would allow you to get money out of a paid off property. Finally, you could sell a property every three years, which would get you to age 95 by just using the proceeds from the property. Keep in mind that you will have some taxes, however, it provides more flexibility and financial security in the long run. Just to clarify, once the 10 properties hit maturity, they will be $600K each for a total of $6 million! 

Start now!

It’s never too late to get started in real estate investing! Set yourself up for the future you want by building your supplemental income today. Those who do it correctly by using BRRRR will have a lot of options down the road. Do you want to learn more about setting yourself up to retire at age 65? Contact us today! 

Watch our most recent video to find out more about: How to retire by 65 years old

by

How to build wealth at age 50

Categories:

How to build wealth at age 50

Today we are going to discuss how to build wealth at age 50! Nowadays many people are getting into real estate investing later in life because they are trying to build wealth for retirement. As a result, they are able to create an additional pocket of money that provides not creates more options for them, but financial security as well. Building wealth for your retirement and increase your cash flow today? It’s never too late to invest in real estate!

Example: Building equity

Purchasing properties prior to age 65:

Year 1 Buy 2 properties
Year 2  Buy 3 properties
Year 3  Buy 5 properties
Total  10 properties
Property value $250K (per property)
National average 4% We will use 3% for this example
Buying strategy BRRRR
Equity after 3 years $600K in equity  (per property)

What is BRRRR?

To put it briefly, BRRRR stands for buy, rehab, rent, refinance, and repeat. In fact, these properties are undervalued properties that you fix up and rent. Therefore, once they are fixed up then you are able to refinance typically at  75%. Another benefit to starting later in life is that you aren’t using your own money for your investment properties. Instead, you are using the strategies in order to buy these properties. By putting multiple strategies together, you have the opportunity to create more than most people have for retirement within only 3 years time.

Start now!

It’s never too late to get started in real estate investing! Set yourself up for the future you want by building your supplemental income today. Those who do it correctly by using BRRRR will have a lot of options down the road. Do you want to learn more about setting yourself up for the life you want? Contact us today! 

Watch our most recent video to find out more about How to build wealth at age 50!

by

Real Estate Investing at 50: Worth It?

Categories:

Real Estate Investing at 50: Worth It?

Today we are going to discuss if it is really worth it to invest in real estate at 50. The answer is yes! Many people are getting into real estate investing later in life because they are trying to build wealth for retirement. This additional pocket of money provides not only additional options for them, but financial security as well. Are you interested in building wealth for your retirement and increasing your cash flow? Let’s take a closer look at why it is never too late to invest in real estate!

Example: Building equity

Purchasing properties prior to age 65:

Year 1 Buy 2 properties
Year 2  Buy 3 properties
Year 3  Buy 5 properties
Total  10 properties

 

Property value $250K (per property)
National average 4% We will use 3% for this example
Buying strategy BRRRR
Equity after 3 years $600K in equity  (per property)

What is BRRRR?

BRRRR stands for buy, rehab, rent, refinance, and repeat. These properties are undervalued properties that you fix up and rent. Once they are fixed up then you are able to refinance typically at  75%. Another benefit to starting later in life is that you aren’t using your own money for your investment properties. Instead, you are using the strategies in order to buy these properties. By putting multiple strategies together, you have the opportunity to create more than most people have for retirement within only 3 years time.

Example: Making money for later

Create the options and security you need before age 65!

Number of properties 10
Cash flow $300 (per property) or $3000 (10 properties) 
Property #1 Paid off in 5 years
Property #2  Paid off using Property #1 
Property #3 Paid off using Property #2
By age 65 You own 3 properties free and clear! 
Property #1, #2, and #3  Worth $400K each totaling $1.2 million
Property #1, #2, and #3  They bring in $2100 each per month

Just to clarify, the only things that you would need to pay once the properties are paid off are taxes and insurance.

Supplemental income options.

First and foremost the money that you are making off of the rental properties can supplement social security or retirement. The second option that you have is to take out a new loan and get money out of one or all of the three paid off properties. Finally, you could sell a property every three years, which would get you to age 95 by just using the proceeds from the property. Keep in mind that you will have some taxes, however, it provides more flexibility and financial security in the long run. Just to clarify, once the 10 properties hit maturity, they will be $600K each for a total of $6 million! 

Start now!

It’s never too late to get started in real estate investing! Therefore, you need to set yourself up for the future you want by building your supplemental income today. Those who do it correctly by using BRRRR will have a lot of options down the road. Do you want to learn more about setting yourself up for the life you want? Contact us today! 

Watch our most recent video to find out more about: Real Estate Investing at 50: Worth It?

by

First 90 Days Are CRUCIAL to Real Estate Investing Success

Categories:

First 90 Days Are CRUCIAL to Real Estate Investing Success

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

How can you find good properties?

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

Example:

An undervalued property $200K

The ARV $400K

The wholesaler is selling for $225K

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

Finding a lender who wants to work with you.

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

In conclusion.

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

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

by

Where to Find Gap Funding

Categories:

Where to Find Gap Funding

In the past few days we have spoken with 4 clients who lost properties because they didn’t secure financing beforehand. While getting into real estate investing requires a lot of planning, it is imperative that investors set up their money correctly from the very beginning.  This often includes finding gap funding options prior too shopping for properties. Those who take the time to set things up correctly will have more opportunities than those who wait!

What is gap funding?

Gap funding is borrowing money from someone for the down payment, carry, or any money that you have to put into the deal. When you are buying a property, the first lender requires something in order to approve the loan. This could be a down payment, reserves for payments, or they may require you to do the fix up. Many investors don’t have the additional funds that are needed in order to meet the lenders requirements. Real estate investors might go out and find a family member, friend, or someone in the real estate community who can lend them that money to bridge the gap. It is important to make sure that your primary lender allows gap funding before purchasing a property. If the lender doesn’t allow gap funding, it could jeopardize the deal. 

How do you find gap funding?

There are a lot of people out there who have anywhere between $10K to $50K that they are looking to invest. By working with you, they have a chance to receive a better return on their investment. So how do you find gap funding? There are real estate groups throughout the community that provide opportunities for investors to meet. While peer investors are not often interested in diving into real estate themselves, they are interested in getting a better return on their money. While you can start by asking family and friends, many fear that it will create an awkward situation. By finding peer investors in the community who have $100K or $200K set aside, you will be able to compete in today’s market!

Ready, set, GO!

In order to be successful in real estate it is important that you find and secure funding prior to purchasing properties. Thankfully there are a lot of options out there to help investors. These include HELOCs, credit cards, and peer lending, just to name a few. Here at The Cash Flow Company we have seen people use multiple ways to get the gap covered. Those who take the time to  gather pre-approvals, will be ready to go when the next deal comes!

Contact us today to find out more about gap funding and what you need to do to get pre-approved.

Watch our most recent video to learn Where to Find Gap Funding

by

How to Get Pre-Approved for a Real Estate Loan

Categories:

How to Get Pre-Approved for a Real Estate Loan

Over the past few days we have had clients lose out on properties that would have been really good flips. They lost deals because they did not secure their financing beforehand. While getting into this business requires a lot of planning, it is imperative that investors set up their money correctly from the very beginning. Get pre-approved for a real estate loan today and open the door to more opportunities!

Set up financing immediately!

Those who are new to real estate investing should focus on setting up the proper financing immediately! The last thing that you want to do is to put a property under contract and not close . This could burn the relationship that you created with the realtor or wholesaler. Instead of being at the top of their list for good properties, you will instead move to the bottom of the pile.  Here at The Cash Flow Company we want to give you the competitive advantage. Part of that is making sure that you do everything correctly. It is a business!

Don’t miss out on deals!

Whether you are new or just into a new adventure, it is important to set yourself up for success from the beginning. If you are going to get into the real estate game, make sure that you are not only looking for properties, but that you are also keeping the money flowing. What do we mean by keeping the money flowing? Maybe you need 100% financing, need a second, or you’re new to flips and need to know what to do. Talk to lenders as you find properties. In doing so, you can move forward quickly on deals. 

Choose the right lender for the deal.

One of the most important things that you need to do as a real estate investor is to create a good relationship with lenders. Those who have a good relationship with their lender will be able to consult with them prior to purchasing in order to see what financing options are available. One thing to keep in mind is that your lending needs will not only change over time, but they will change depending on the property. For example, financing on a fix and flip will be different from the financing on a rental property. It is important to look around and evaluate your lending options annually in order to find the best options for you. 

How do you get pre-approved?

Before seeking out a pre-approval, it is imperative that you know what type of property you are looking for. Are you going to focus on flips, rentals, 1 to 4 units, or multi units. Those who do can then make sure that the lender lines up with what they are trying to do. How can you find the right lenders? The answer is by talking to those in the real estate community. They can guide you to the lenders who are closing, those who work with new investors, and also tell you about requirements that the lenders might have. 

Ready, set, GO!

One of the biggest hurdles for real estate investors is finding the funding needed to purchase properties! By gathering pre-approvals first you will be ready for the next deal. While building strong relationships along the way.

Contact us today to find out more about what you need to do to get pre-approved.

Watch our most recent video to learn How to Get Pre-Approved for a Real Estate Loan

by