Tag Archive for: real estate investor

A 911 Loan Can Help Your Credit Score!

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Today we are going to discuss how a 911 loan can help your credit score. Did you know a 911 loan could be the solution to your credit woes? Whether you’re stuck with high-interest debt or a stalled project, a 911 loan isn’t just about saving the day. Instead, it’s also about boosting your credit score.

How does it work?

Here’s how it works: When you use a 911 loan to pay down high-interest credit cards or overdue bills, your credit utilization ratio drops. That’s a fancy way of saying you’re using less of your available credit, which lenders love to see. A lower ratio can result in a higher credit score over time.

Wrap things up quickly! 

Let’s say you’re an investor who needs cash to finish a property renovation. Without the funds to complete it, bills pile up, credit card balances grow, and your score takes a hit. A 911 loan gives you the money to wrap up the project quickly, freeing up cash to lower your debt and stabilize your finances.

Double win! 

Think of it as a double win: you fix your immediate problem and set yourself up for better financial opportunities down the road. When your credit score improves, you’re more likely to qualify for lower interest rates, better loans, and bigger savings in the future.

A 911 loan isn’t just about the now, it’s about building a stronger financial tomorrow. Ready to explore your options?

Contact Us Today! 

Not sure where to start? Contact us today to find out more about how a 911 Loan Can Help Your Credit Score!.

Free Tools For You! 

We also have free tools available! Download the Credit Score Checklist to see if your credit score is in the right place for your investment needs.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

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Starting Your Small Business Correctly

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Today we are going to discuss the importance of starting your small business correctly. Starting a small business can be exciting, but it’s important to set it up right from the start.

Choose your business

First, make sure to choose the right business structure. Whether it’s an LLC, corporation, or sole proprietorship, this decision impacts your taxes and legal protection. For instance, an LLC might work best for real estate investors because it protects personal assets if something goes wrong.

Create a plan

Next, don’t skip creating a solid business plan. A plan helps you stay focused and gives lenders confidence if you need funding. For example, outlining how your business will grow or generate income makes it easier to secure a loan.

Get everything in order

Additionally, register your business and get all the proper permits. Skipping this step can lead to fines or delays. For example, a house flipper might need a local business license to operate legally.

Setting yourself up for success

After that, set up a separate business bank account. Keeping your business and personal finances separate makes it easier to track expenses and file taxes. For instance, if you’re managing multiple rental properties, mixing accounts can get messy fast.

Credit is key

Finally, focus on building your credit. A strong business credit profile opens doors to better loan terms. Paying bills on time and keeping credit usage low helps build trust with lenders.

Get started today

By taking these steps, you can avoid common pitfalls and set your business up for success. Plus, it’s easier to adjust and grow when your foundation is solid. Start right, and your small business will have a big chance to thrive.

Contact Us Today! 

How can you maximize your profits as a small business owner? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the 5 ways to start a biz with no money to see if your potential rental property is going to be a good investment!

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can maximize your profits! 

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What Are Interest-Only Loans?

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Interest-only loans are a unique way to borrow money, especially for real estate investors or homebuyers looking for flexibility. With these loans, you pay just the interest for a set period, usually 5 to 10 years, before switching to payments that include both principal and interest.

Why would someone want this? Imagine you’re flipping a property. You plan to renovate and sell it quickly. An interest-only loan keeps your monthly payments low, freeing up cash for the project. Or maybe you’re renting out a property. Lower payments can help you maximize cash flow in the early years while you build equity.

For example, let’s say you borrow $200,000 with a 6% interest-only loan. Your monthly payment would be just $1,000 (6% of $200,000 divided by 12 months). Compare that to a traditional loan with principal and interest, your payment could be $1,200 or more. Those savings can make a big difference when every dollar counts.

But, there’s a catch. After the interest-only period ends, your payments will go up, sometimes a lot. That’s why it’s important to have a solid plan for what comes next.

Interest-only loans aren’t for everyone, but when used wisely, they can be a great tool to reach your goals. Want to know if this type of loan fits your situation? Keep reading for the pros, cons, and how to decide.

Contact Us Today! 

Is a cash out refinance right for you? Contact us today to find out more and learn about your different financing options.

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer what financing would be best for your investment property.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

 

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How can a HELOC help you?

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How can a HELOC help you? A HELOC, or Home Equity Line of Credit, is like having a financial tool in your back pocket. It helps you tap into your home’s equity and use it for things that matter most. Whether you’re upgrading your property, tackling unexpected expenses, or funding your next investment, a HELOC gives you flexibility.

Imagine this: you’re an investor who spots a great deal on a rental property. You don’t want to miss out, but you need funds fast. With a HELOC, you can pull cash from your primary home’s equity to close the deal. Or maybe you’re fixing up a property to flip—using a HELOC for renovations can help you add value without taking on high-interest debt.

The best part? You only pay interest on what you use. So, if you open a HELOC for $50,000 but only spend $20,000, you’ll only pay interest on that $20,000. It’s a flexible and cost-effective way to access funds when you need them most.

In short, a HELOC can be your secret weapon to grow your investments or cover life’s big expenses without straining your budget. Ready to see how it could work for you?

Contact Us Today! 

Is a HELOC right for you? Contact us today to find out more and learn about your different financing options.

Free Tools For You! 

We also have free tools available! Download the HELOC Questionnaire to see if a HELOC is right for you.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

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Understanding the Credit Score 911 Loan

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If you’re struggling with a low credit score, a 911 loan could help you get back on track!

A Credit Score 911 Usage Loan is essentially a non-reporting loan that pays off all credit cards, allowing your credit score to shoot upwards.

These loans act as a fast-acting antidote to your credit score usage problems. The next time your credit report generates, you should see significant improvement.

Essentially, it’s a quick fix for people who pay their bills on time.

Who Should Use a 911 Loan?

If your credit score is weighed down by a long history of late payments, this loan is not going to help you very effectively. 

These loans are perfect for people whose credit has been plagued by high usage, who need to fix their credit score FAST.

In short, here’s what you should know about a 911 Usage Loan:

  1. 911 loans pay down debt that accumulates through usage issues, not late payments.
  2. We’re an asset-based lender, so make sure you have some real estate to secure your loan.
  3. You need an exit strategy. We want to make sure you have a way of paying that loan back.

Real estate investing is a fast-moving business. It’s important to have a quick solution for an issue that could otherwise cost you thousands of dollars in higher payments or declined deals. 

How Long Before it Pays Down my Debt?

We call this a “Credit Score 911” because we understand that a low credit score can be an emergency need.

It can take as little as 2 weeks (or up to 30 days) to get this loan and see results in your credit score. The timing depends simply on when your credit cards report and when your statements come out.

You still owe the money, but now you owe it to a non-reporting entity.

Although it can be daunting to take out an unexpected usage loan, a delay of a month is far better than a long term delay where you can’t refinance or buy.

 

Read the full article here.

Watch the full video here:

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Real Estate Investing: Points and Interest Explained

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Real Estate Investing: Points and Interest Explained

Today we are going to explain what points and interest are in regards to real estate investing. This is something that needs to be considered when you are applying for a loan in order to ensure that you get the best deal. Whether it’s a hard money loan, a private loan, a bank loan, or even OPM (Other People’s Money)? Each situation is different! It’s essential to know what works best for you. Let’s get started!

Factors to Consider

Speed of Funding

In real estate, speed can make or break a deal. Sellers prefer buyers who can close quickly with no hassle. So, you need to know which lender can fund the fastest.

Down Payment

Down payments can vary. With hard money, you might get 100% financing, but usually, you’ll need 10-20% down.

Example: If you’re buying a $300,000 property, a 10% down payment means you need $30,000 upfront.

Points and Interest Rates

Points are fees paid to the lender, usually as a percentage of the loan amount. Interest rates can range from 10% to 12% or more.

Example: On a $270,000 loan with 1 point, you’ll pay $2,700 upfront. At 12% interest, you’ll pay $2,700 monthly.

Additional Fees

Lenders may charge other fees like escrow fees, draw fees, underwriting, and appraisal fees. These can add up, especially on smaller loans.

Example: A $200,000 loan might come with $1,900 in fees, affecting your overall cost.

How to Choose the Best Loan

  1. Compare Costs: Use our free Loan Cost Optimizer tool on our website to compare lenders and see who offers the best deal.
  2. Check Funding Speed: Make sure your lender can close the deal quickly to avoid losing it.
  3. Evaluate All Fees: Look at points, interest rates, and other fees to get the full picture.

Conclusion

In sum, the best loan for your fix and flip is the one that costs you the least and funds on time. At The Cash Flow Company, our goal is to help you get the best lending options available. If you have a question or a deal to discuss, reach out to us. Visit our website, download our Loan Cost Optimizer, to not only compare lenders, but to also find the best deal for you.

Watch our most recent video to discover more about: Real Estate Investing: Points and Interest Explained

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DSCR Loans: Does Your Rent Cover Your Costs?

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DSCR Loans: Does Your Rent Cover Your Costs?

Today we are going to discuss the importance of asking “does your rent cover costs” when considering a DSCR loan. Getting a DSCR loan can be both easy as well as rewarding. Let’s take a closer look! 

First and Foremost: Check Your Rent Coverage

First, ask yourself: does your rent cover all your costs? This includes:

  • Mortgage payment
  • Taxes
  • Insurance
  • HOA fees

While it’s not always necessary, by having your rent cover these costs can in turn help you get better rates as well as higher loan-to-value products. At the very least, aim to charge rent that covers your monthly payments. However, if it does, then you’ve passed the first step!

Example: Begin by imaging that you own a rental property. Your mortgage payment is $1,200, your taxes and insurance are $200, and your HOA fee is $100. Therefore, your total monthly cost is $1,500. However, if you charge $1,600 in rent, you are even able make a little extra.

Conclusion

In sum, determining your DSCR ratio you can determine if a DSCR loan is right for you. And that’s it! If you find any step challenging, don’t worry. Our team is here to help you. We’re eager to set you on a path that helps you make the money you need to live the life you want. Here at The Cash Flow Company we want to ensure that all of your questions are answered prior to purchasing a property. Contact us today to find out more! 

Watch our most recent video to find out more.

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What Should You Do Before Interest Rates Drop?

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Interest rates are currently high, but they’re likely to start falling in 2024. What can you do now so that you’re prepared to build wealth when interest rates drop?

It’s important to look at the patterns of those interest rates so we can project where they’ll be over the next few years.

Real estate investing is one of the most accessible ways to create generational wealth. It takes two things to be successful:

  1. Leverage: knowing how to use other people’s money (bank loans, etc.) to turn a profit
  2. Math: know how the numbers work so you can use them to your advantage.

Even though interest rates are currently high, if we understand how to use leverage and math to our benefit, we’ll be creating wealth in no time.

Falling Interest Rates Generate Generational Wealth… If You’re Prepared.

If you buy when interest rates are high, you’re going to increase your income as rates fall by refinancing. This puts money back in your pocket. You’re also going to increase your net worth even if you don’t sell.

Refinancing when rates fall is a great way to create the income you need to begin a sustainable investment cycle. 

Also, this strategy also naturally lets you diversify lines of credit, cross liens, etc. that allow you to increase your portfolio.

Time to Buy

Here’s the bottom line: rates are going to fall, and if you buy now, you’ll build income without needing to invest in additional investments. 

This is the time to be buying investment properties.

We’re moving into a market where there’s going to be a lot of demand for properties. As rates fall, more people will be looking to buy. Get ahead of that rush, and use the dropping rates to put money in your pocket.

Resources

It’s important to keep your finger on the pulse as a real estate investor — especially if you’re serious about generating wealth. We have a weekly Investor Mortgage Report that keeps you updated on DSCRs, bank rates, private money, and market trends so you can be an informed investor.

Things change rapidly. Rates may rise through the end of 2023, but the moment they start to fall, you want to be prepared.

If you’d like to be put on the Investor Report email list, or if you have questions about how to get started as an investor, reach out to us at Mike@TheCashFlowCompany.com.

 

Read the full article here.

Watch the full video here:

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DSCR Loan Calculator: How to Find Your Ratio

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A DSCR loan calculator is an invaluable tool for real estate investors.

In the investment world, rental properties are a great source of wealth. The financial potential in fixing up places to then rent out is a very lucrative model, especially in the current housing economy.

What is a DSCR Loan?

DSCR loans are specifically designed for real estate investors who hold rental properties. 

The acronym literally stands for Debt-Service Coverage Ratio which is a fancy way of saying that the loan cares about the cash flow of a property.

The great news, especially for new investors, is that accessing these loans is less dependent on personal or business income. Even if you’ve just begun a new business, qualification for DSCR depends almost entirely on the potential value and expenses of the rental property itself. 

What is a DSCR Ratio?

The DSCR ratio is a simple calculation that compares income to expenses—the cash flowing in vs. the cash flowing out—on a single property.

Essentially, a DSCR ratio of 1 simply means that the income and expenses equal each other.

The DSCR ratio measures the break-even point of your investment. So long as you bring in the same amount of money as you invest, you won’t lose anything.

However, a DSCR ratio of higher-than-1 is even better. A higher ratio means that you’re bringing in more money than you’re spending—generating cash flow and building wealth.

Raising the Ratio

You can get a higher DSCR ratio in a few ways. 

1. Be mindful of your expenses.

Especially if you’re a new investor, make sure you’re shopping around for the best deals. 

Before you buy a property, research the typical costs for the area. Is there an HOA? Will you need any specialized insurance? Typical taxes?

Knowing these things beforehand can help you make more informed decisions and keep your costs lower.

2. Set rents intentionally.

Look at the average rents in your area. Remember, the higher your income (rents), the higher your DSCR ratio.

Let’s look at an example:

When rents equal our cash out, lenders may see your loan as “safe,” but it’s not making you any money. 

Instead, raising rents can help you end up with a higher DSCR ratio (and more money in your pocket).

When you raise rents, simply divide your expenses by your income (rents) to find your new ratio.

By raising rents by $200, we end up with a much better ratio (1.2) that actually creates wealth instead of simply covering expenses. 

Use Our DSCR Loan Calculator

To help you find your projected rents, expenses, and ratio, you can use our DSCR loan calculator. It’s a free, user-friendly download that will help you estimate your DSCR ratio to see if your investment property is going to break even.

Once you have an estimate for your ratio, it’s time to start looking for loans. 

Finding a DSCR Loan

Banks typically like to see ratios of 1 or higher. 

However, if you’re working with a property that might not break even, you can often still find a loan, but you might be stuck with higher rates.

You can also check out our website and inquire about the DSCR options we offer. 

Here at The Cash Flow Company, we scour the market to make sure we offer competitive rates and connect good people with good loans.

If you have questions or want to talk about a loan, reach out to us at Mike@TheCashFlowCompany.com.

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How Can Credit Score Impact DSCR Loans?

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How can your credit score impact DSCR loans in the real estate investing world?

Credit score impacts investors potentially more than anything else. Lenders will adjust the rates and terms of loans based purely on the three digits of credit score on a person’s financial records. 

Leverage is the key to successful real estate investing, and understanding the impact of credit score is a critical facet of that leverage. 

This article uses real-life examples to illustrate the difference a good credit score makes in the investment world.

How Can Credit Score Impact DSCR Loans?

Let’s look at how DSCR loans can be impacted by a low credit score using two example clients:

  • One (Person 1) has a low credit score of 660
  • The other (Person 2) has a high score of 740

We see a lot of clients looking at cash out refinancing, so we’ll look at that type of project.

What’s the Difference?

If Person 1 has a 660 credit score, not only will they likely struggle to find lenders, but 65% is about the best they could look for. This directly translates into less money out of that property.

In contrast, Person 2 with a 740 score should be able to fairly easily get 75%. The more money out, the better your leverage.

As you can see in the chart above, not only does the person with a lower credit score get less cash out, but their rate is also higher which raises their monthly payments. 

Credit Score Matters

Although at first glance, it’s tempting to just look at the monthly payments and think, “It’s not that big of a difference,” don’t fall into that trap!

The person with the higher score not only has a lower monthly payment, but because they also got a higher Cash Out % which gave them an additional $35,000 out. 

Having that good credit score makes it possible to keep cash flowing. If you’re serious about investing, your credit score matters.

Read the full article here.

Watch the full video here:

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