Tag Archive for: real estate investors

A Key Lesson In Real Estate Investing: Times Versus Time

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A Key Lesson In Real Estate Investing: Times Versus Time

Throughout the years I have been able to help thousands of clients become successful in real estate investing. Looking back over my journey, there are several things that I would do differently. While there are a number of lessons I would like to share with you, I feel that Times vs Time is the most imperative to your success.

What is Times VS Time?

The question that all investors ask is, how long does it take to be successful? Success is heavily reliant on the number of times you practice the steps before you become confident in the process. The more practice you have looking properties, comparing properties, and contacting lenders, the more knowledgeable and confident you will become.

It takes 100 times to walk through these steps before an investor becomes confident in the process. Some investors can achieve this in a week, while others may take 6 months to 6 years. Again, it’s not the amount of time it takes to be successful, it’s the number of times you practice.

How can investors set up for success

It is vital that you create a process that works for you and your business. In doing so, you are then able to follow the same steps each time. As a result, it further builds the confidence you need to succeed. There are five lessons in total including: Take the fast track, Set your business up to win, Create simple processes, and Scale with flexibility. There is a bonus one as well, which is Do whatever it takes!  

 

Watch our most recent video to find out more about these 5 valuable lessons that will put you on the fast track to success. 

Have more questions on how to get started with your business and how you can win in real estate investing? Call us today! 

 

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How a Bank Collapse Impacts Real Estate Investors

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How a Bank Collapse Impacts Real Estate Investors

Without a doubt, banks are experiencing a significant decrease of money flowing into the lending pool. But, how does this impact investors? There are three main ways a bank collapse could impact real estate investors today. What are they? Let’s dive in and discover more!

Banks are Lending Less

Nowadays, banks are being forced to swim upstream in search of the “best of the best clients.” But what makes a perfect client? Well, it’s those who have more cash in the bank, more revenue, and higher credit scores.

Investors Book of Debt

To put it briefly, savings accounts and CD’s that were booked years ago at low percentages are experiencing a dramatic increase. What started at a monthly profit of 3% to 4%, has become a deficit of 5% to 5.25%. For this reason, investors are now upside-down on their assets.

Book of Business

Now, the notes that banks wrote 3 to 5 years ago, are now coming due. What started at 3%- 4% interest rates, has skyrocketed to 8%-10%. As you can see, lending is no longer in the forefront of banks’ minds in the traditional sense. 

How Investors are Managing the Lending Squeeze

So, what can real estate investors do? To start, they can prepare by making sure they have cash, high credit scores, and keeping up on projects. At this point and time, money and credit are going to be your keys to success. They are what will ensure you are in the game as rates continue to rise.  

Undoubtedly, there’s a bank collapse on the horizon. But as long as you’re aware of the situation and are willing to put in some work, you’ll be okay. Plus, we can guide you through a bank collapse by helping you improve your credit sores, increase your cash flow, and explore alternative lending options. Contact us today! 

Do you need more resources on how to navigate a bank collapse? Watch our most recent video to learn more!

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Bank Collapse: How Real Estate Investors Can Prepare

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How Real Estate Investors Can Prepare for Bank Collapse

How can real estate investors prepare for the collapse of banks? What does that mean for them, and what does that mean for you as a real estate investor? We will coach you through this lending squeeze by not only looking at the challenges, but also highlighting lending alternatives that will help you stay afloat.

In the lending community, banks are experiencing a decrease of money flowing into the lending pool. Over 190 banks have been placed on the watch list because funds are leaving the bank at an accelerated pace. What does this mean for investors specifically?

There are three main ways this problem is impacting real estate investors today. Let’s dive in and discover more!

Changes to the Banks’ Lending Pool

1. Banks are Lending Less

Unfortunately, with the lending restrictions, banks are being forced to swim upstream in search of the “best of the best clients.” What makes up a perfect client? It’s those who have more cash in the bank, more revenue, and better credit scores. However, those specifications don’t always fit the majority of investors. 

2. Book of Debt

To put it briefly, savings accounts and CD’s that were booked years ago at low percentages are increasing dramatically. What started at a monthly profit of 3% to 4%, has become a deficit of 5% to 5.25%. This situation is forcing investors to sell bonds and get rid of old debt, so they are longer upside down on past assets.

3. Book of Business

Banks who wrote notes to businesses 3 to 5 years ago are now coming due. What started as 3%- 4% interest rates, has skyrocketed to 8%-10%. Unfortunately, because of this, many businesses can no longer qualify. What do banks do when notes become nonperforming? The government requires banks to put in more capital to help cover potential losses. Lending is not in the forefront of banks minds in the traditional sense. The primary option for investors is SBA loans, which are backed by the government, and therefore they do not have the same lending restrictions.  

Investors are Searching for New Lenders:

Why are they looking for new lenders? Investors are forced to explore uncharted waters to locate private lenders because banks are focused on the “best of the best.” This waterfall effect is forcing investors to cascade down to private lenders to keep their businesses afloat. With the influx of new clients, private lenders are also swimming upstream alongside banks, searching for borrowers with more experience, more money down, and more liquidity. Lenders who used to lend 75% ARV are now lending 75% LTV. This could result in investors spending 20%-30% more on each deal if you’re even able to qualify. 

Additional Aspect for Fix and Flip Properties

In regard to fix and flip properties, investors need to consider the current interest rates for homes. When rates go up, the ability for a buyer to buy a house goes down. In just two years’ time, a house for $295,000 in 2021 is now $500,000. The affordability of properties has stretched what investors can fit into their budget, and what they are able to qualify for depending on the DTI (debt to income). 

Managing the Lending Squeeze

How real estate investors prepare can will result in success when navigating these rough seas. The goal is to make sure you have cash, high credit scores, and that you are keeping up on projects.  Get into a deal now and hold it for 2-3 years to set yourself up for success.

Open your eyes to additional lending sources, such as “other people’s money” aka OPM, to fund part or even all of your projects. These are individuals within our community that can lend anywhere from $10,000 to $100,000. They are out there! It’s just a matter of knowing where to look and who to ask.

Money and credit are going to be your keys to making sure that you are in the game as the rates continue to increase. We can help guide you through the process of starting your business, increasing your credit scores, finding ways to improve your income, and helping with OPM options.

Need more help navigating these rough waters watch our most recent video!

We’ve raised millions of millions of dollars over the past 15 years by bringing in money from other investors who are just looking for a return. If you need coaching or help taking advantage of these opportunities give us a call! 

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How to Find a Business Credit Card

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Personal credit cards tanking real estate investors’ credit scores is the #1 thing slowing investors down. The solution? A business credit card.

Especially in the beginning, it’s tempting to use personal credit cards to kickstart your investing adventures. However, the high spending demands of real estate investing can drive up usage and tank your personal credit score. In order to protect your personal score, business credit cards are typically the best option.

Switching to business cards may seem daunting at first, but if you know how to prepare and what to look for, it should be smooth sailing.

Requirements for Business Credit Cards

Business credit cards are one of the best ways to make real estate investing easier and more profitable. But what do you need before you start looking for a business credit card?

1. A Business

Typically, you need to have an operating business for at least a year (though there are exceptions)  before applying for a business card. 

This isn’t quite as tricky as it may sound. You need a business account, website, billing information, etc. Essentially, you need proof that you are, in fact, operating an investment business. 

2. A Good Personal Credit Score

Even though you’re applying for a card that won’t report on your personal credit score, approval for the business card is based on your personal credit score.

If you need to raise your personal credit score before applying for a business card, we can help you with that! Usage loans essentially transfer some of that credit card spending into a separate loan that won’t tank your credit score.

Both we and our sister company Hard Money Mike offer usage loans.

3. 1–2 Personal Credit Cards

Obviously, you will need to use your personal credit cards for your investment needs in the beginning. However, if you’ve been using those well, then banks are more likely to approve a business credit card.

All in all, if you have a business, a good credit score, and a couple of credit cards already, it’s fairly easy to start the process of switching to business cards. 

Tools to Help You Find the Right Business Card

We want to make it easy for you to succeed as a real estate investor—no strings attached. The more you know and the more resources you have, the better equipped you are to find the right deals for you.

We’ve already done some of the work for you:

1. Business Credit Card Marketplace

Here at the Cashflow Company, we’ve partnered with Nav to help you find the right business card for you. By inputting a few pieces of information, we’ll let you know what cards match your needs (and won’t report on your personal credit score).

2. Credit Score Checklist

You can use our free credit checklist download to check the health of your credit score. What can you do to improve that score? Does it need some CPR? What are your options?

3. Other Real Estate Investing Tools

Explore our other tools to optimize your investment strategy. We have various calculators, questionnaires, optimizers, and analyzers to walk you through the various steps of the game.

Contact Us!

Credit scores are a very important piece of leverage. We want you to feel equipped and confident that you’re protecting that credit score in a smart way with business credit cards.

If you want to discuss your credit score, a usage loan, or business credit cards, contact us at Info@TheCashFlowCompany.com. We’re always happy to help!

 

Read the full article here.

Watch the full video here:

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Lenders Want To See Personal Investments

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Lenders want to see your own money going towards your projects through personal investments. 

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?

One of the things lenders look for is whether or not you’re personally invested in what you’re asking them to put money into.

Use Personal Investments to Demonstrate Commitment

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.

Personal investments demonstrate your commitment to follow through and finish a project — just what lenders are looking for!

Learn More

Read the full article here.

Watch the YouTube video here:

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