Tag Archive for: real estate lenders

Key to Succeeding in Today’s Real Estate Market

The key to succeeding in today’s real estate market is consistency. If you are consistently looking at properties, finding lenders, and doing things correctly, then you will set yourself up for success. Things have changed dramatically compared to 10 to 12 years ago. Back then, there was a whole generation of investors who had an easier time navigating the market. They had lower rates, property values increasing, and lenders were throwing money at everyone. Nowadays, everything is tightening up. Lenders are disappearing, and those who are still lending are becoming more selective. It is imperative that investors stand out in this market and set themselves up correctly. In doing so, investors will get the best deals and set themselves up to win. 

How the market works

When interest rates go up, people can no longer afford to buy properties. The decrease in home sales results in a plateau or even a decrease in property values. Predictions are saying that rates will go back down to 5.5% in 18 months time. When they do, people will once again be able to afford to buy properties. As things loosen things up, there will be a wave of people coming into the market and buying properties. Investors who set themselves up in this market will win in the future.

Let’s look at an example

A property that you purchased a few years ago for $400K would now sell for $350K in this current market. When the wave comes back in 18 months to two years, that same property will be selling for $450 to $500K! That’s a great return. During these cycles, many people start running away and stop buying properties. These are the times when smart investors come in and buy. If they are able to hold onto it until rates improve, then they will in turn reap the benefits of the better rates and generate greater cash flow.

Customer success story

In 2010 I helped someone buy 10 homes in a year, without him putting any money in. Back then, the properties were cash flowing $500 per month because he had bought them at such good numbers. Fast forward to 2022. He only owes on 3 of the properties and has paid off the other 7. They have all increased in both the property value and rent by 3x and even 4x on a few of the homes. In only one year he set himself up for the rest of his life. This is all because he bought when everyone else was running away. 

In conclusion

Remember that consistency is the key to succeeding in this market. From finding properties, to locating lenders, and setting things up correctly, consistency will create success. This is the best market to get deals in. When rates go back down, which they will, it will create a wave of people coming into the market and buying properties. Now is the time to get ahead of the wave of success. In doing so, you will be able to take advantage of lower rates, increase your property value, and most importantly create cash flow.

Contact us today to find out more about the changing times and what you need to do to get ahead of the wave.

Watch our most recent video to find out more about the Key to Succeeding in Today’s Real Estate Market


How to Get a DSCR Loan in 3 Steps


How to Get a DSCR Loan in 3 Steps

Getting a DSCR loan can be not only easy but rewarding as well. If you want to close a real estate deal fast and easy, simply follow these three simple steps. Begin by answering these questions, and you’ll be on your way to getting a loan that’s perfect for you and your cash flow.

Step 1: 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, having your rent cover these costs can 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 your rent does cover these costs, then you’ve passed the first step!

Example: Imagine you own a rental property. Your mortgage payment is $1,200, your taxes and insurance are $200, and your HOA fee is $100. Your total monthly cost is $1,500. If you charge $1,600 in rent, you cover all your costs and even make a little extra.

Step 2: Review Your Credit Score

Next, consider your credit score. You can get a DSCR loan with a score in the low 600s, but it will cost you more. Therefore a lower credit score can add up to one or more percentage points to your interest rate. This in turn can increase your monthly payment by $200 to $400.

Example: Let’s say you have a credit score of 620. You might get a loan with a 7% interest rate instead of 6%. On a $200,000 loan, that extra 1% could mean paying $2,000 more per year in interest.

If you need tips to raise your score, check out resources like our YouTube channel for advice on improving your credit.

Step 3: Choose the Right Lender

Finally, work with a lender who offers many options and programs. Every mortgage company has an ideal client, and you want to make sure your lender has an option that fits your needs at the lowest cost.

Example: You find a lender who offers various DSCR loan programs. One program might have a lower interest rate but higher fees, while another might offer a higher interest rate but lower closing costs. Choosing the right program can save you money and boost your monthly cash flow.


And that’s it! Those are the three key questions you need to answer before diving into a DSCR loan. 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.

Watch our most recent video to find out more about: How to Get a DSCR Loan in 3 Steps


When you’re filling your money bucket, being honest with lenders can make a huge difference in your loan and the options they offer!

1. Be Honest About Your Financial History

This may seem obvious, but make sure you’re honest with your lender.

Make sure you’re upfront and honest about your financial history with your lender. It should go without saying, but don’t try to hide a bankruptcy or that you defaulted on a loan before. 

If you’re concerned about your financial history, trust us: It’s much worse to hide it and make the lender find out on their own (which they will).

Once they find out, it will be harder for you to get a loan. And if you do find a loan, your options are going to be severely limited—not just because of the history, but even more so because you hid important information. 

Options are super important to your work as a real estate investor. 

Options drive down the costs of loans. Anytime you pay less for money, the more money there’s going to be in your bucket. 

2. Stick to Your Timeline to Build Trust with Your Lenders

Similarly, when you say you’re going to get a project done, get it done. Whether it’s a flip or a BRRRR, construct a solid timeline on the front end. This keeps you and your lender are on the same page.

It’s often a good idea to put in a bit of a cushion when talking to your lenders so that you don’t panic if there are minor delays in your project. 

Lenders want to see honest people who are doing their best. Most lenders are happy to support investors who are upfront with them with more money, more funding, more options. 

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Ordinary people’s money is fast, cheap, easy funding, but why would OPM lenders WANT to give you money?

OPM is usually known as “Other People’s Money,” but with our real estate clients, we think of it as “Ordinary People’s Money.”

Relatives, friends, and people in real estate groups would all be open to lending you money for your investments.

This type of private money is fast and less expensive, with minimal paperwork. But why would these people WANT to give you their money?

Why People Want to be OPM Lenders

Part of why OPM in real estate works so well is because it’s a win-win.

Your lender gets a better return on their money than many other investment methods, for zero work.

You’re paying them a (lower than institutional funding) rate of interest. Especially with the economy as unpredictable as it is right now, people who have cash want a stable place to put it with a consistent return. Becoming an OPM real estate lender offers just that.

In addition to a stable rate, OPM lenders also get to invest in their community. Rather than putting money in stocks, national banks, or huge funds, they get to support a small business like you.

Finding OPM for Real Estate

Reach out at Info@TheCashFlowCompany.com, and we can show you exactly how to find OPM real estate lenders.

What we can’t help you do is keep them – that part is up to you. When you find OPM lenders, make sure to take care of them, get them their returns on time, and be honest throughout the process.

A good lender will either stick with you for the long haul or disappear after the first deal, and it all depends on how easy you are to work with.

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What a DSCR Lender Looks For


Know what a DSCR lender looks for before you close!

While conventional conforming loans have one main underwriting guideline all lenders follow, every DSCR lender creates their own requirements, offers, and processes.

The most important thing to know about DSCR loans right now is that they vary from lender to lender. You need to get to know the lenders in your area.

How DSCR Loans Differ

Firstly, each lender has their own nuances. Any number of these factors can change for a DSCR loan between different lenders:

  • Ratio requirements
  • Credit score requirements
  • Terms and products (interest-only, 40-year, etc.)
  • Interest rates

Lenders will also have different restrictions for properties, based on:

  • Location
  • Unit size
  • Short-term vs traditional rentals
  • Personal name vs LLC name

To be successful with DSCR loans, then you need to become a master of which lenders offer what in your area.

Lenders won’t come knocking on your door to let you know what products they have available. You have to be proactive.

How to Connect with DSCR Lenders

With more investors asking for money and less money available, many lenders are overwhelmed. The best thing you can do is be proactive, educated, and prepared with your lenders.

It’s also wise to get someone who can help connect you with lenders and products. A place like The Cash Flow Company can help with this aspect of real estate funding. They can advocate for you to make sure you get the best loan for your deal.

What Ratio Requirements A DSCR Lender Looks For

“DSCR” stands for “debt service coverage ratio.” It’s a number that explains cash flow, or money coming in vs money going out.

In a real estate rental situation, there are two important numbers to figure out this ratio:

  1. Income – rent from tenants.
  2. Expenses – mortgage principal and interest, taxes, insurance, and any HOA fees.

The ratio is income divided by expenses. Therefore, if your income 100% covers your expenses with none left over, that’s a ratio of 1:1. Most DSCR lenders require 1:1 as a standard minimum.

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