Tag Archive for: real estate portfolio

The Key to Creating Leverage

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The Key to Creating Leverage

Today we are going to discuss the key to creating leverage in real estate investing. Here at The Cash Flow Company, we see success from the money side because money is the key factor in real estate. In regards to the foundation of this business, it is imperative that you have the leverage you need in order to build your portfolio. What is the trick that can help you accelerate your success? Let’s take a closer look!

Taking care of your leverage.

How can people take care of their leverage on certain properties or on their portfolio? Whether there are two properties or 10 properties, it is important to create leverage over someone else. This can be accomplished by picking one property and focusing on paying it down quickly. In doing so, it will free up the equity in that property, and will provide you more leverage. 

What is the benefit to paying one property off?

By paying down or off one property within your portfolio, you can then get a line of credit or a HELOC on the property. This provides the leverage you need to invest in other deals. We have seen a number of clients who are able to invest in new deals quickly because they had free cash flow. Just to clarify, we are not talking about these clients having money in their pocket. To say it another way, by either paying off a property completely or paying it down to a lower loan to value, you create more options for leverage. How can you take advantage of this additional leverage? One of the options is a HELOC. A HELOC is a Home Equity Line of Credit. Investors can take out a HELOC on the paid off property in order to take advantage of great deals quickly and easily. 

Free up the equity and create more leverage! 

In the world of leverage, an LTV of 75% does not free up any equity. This is due to the fact that investors are paying down each property equally as opposed to paying a little more towards a single property. For example, if there was a deal available for $150K, you would not have enough equity available to purchase the property. Just to clarify, lenders will not lend over 75% on an investment property. How can you set yourself up for success and use the equity in your properties? The answer is by focusing on paying one property down faster. In doing so, you will in turn free up the equity and create more leverage. Remember, those who will accelerate in this business are those who create financial flexibility. 

Contact us today! 

Use your equity to your advantage! Do you need some guidance on where to get started? Here at The Cash Flow Company we can help you get on the path to success! Contact us today to find out more about the The Key to Creating Leverage

Watch our most recent video to learn more about The Key to Creating Leverage.

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How to create wealth with a portfolio loan

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How to create wealth with a portfolio loan

Many real estate investors wonder how they can create wealth with a portfolio loan. Investors enter this community with the goal of creating generational wealth. This can be achieved by creating a portfolio of homes, as opposed to just acquiring just a few properties. What do you need to do financially in order to successfully create a portfolio? Let’s take a closer look at how you can create wealth with a portfolio loan! 

Changes in lending options. 

Investors who expand from a few properties to a portfolio of properties will need to open the door to other loan products. Those who invest in single family homes or have 1 to 2 units are using traditional loans, conforming loans, bank loans, or single DSCR loans. If you are transitioning to a portfolio loan it is important to take everything into consideration before diving in. 

Flexibility of a commercial loan.

A commercial loan can provide the flexibility you need to create generational wealth. One of the biggest benefits is that it provides the opportunity for you to use another person’s credit score as long as they are under your LLC. In doing so, a higher score can not only keep the transaction going, but it can open more doors. Another thing to keep in mind is that commercial loans are primarily based on the cash flow and the property value. This allows you to lock them in when rates are good so that you can use the slots to build up some additional properties on the side.

Create generational wealth.

By using a portfolio loan you are creating a bigger asset. More importantly commercial loans, unlike traditional loans, will not show up on your credit. Another thing to keep in mind is that banks often restrict your growth either by the number of properties or the loan amount. Those who are aggressive and use a portfolio loan have the flexibility they need to create the generational wealth that they want.

Is a portfolio loan right for you?

Real estate investors who have 20 properties or more need to start searching for other lending options in order to create the wealth they need to suceed. A portfolio loan is an excellent way to put all of your properties under one blanket loan. Is this the right loan for you? Contact us today to find out more about portfolio loans and other ways you can create generational wealth. 

Watch our most recent video to find out How to create wealth with a portfolio loan.

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The pros and cons of a portfolio loan

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The pros and cons of a portfolio loan

Today we are going to discuss the pros and cons of a portfolio loan. Nowadays real estate investors enter into this community with the goal of creating generational wealth. Generational wealth can often be achieved by creating a portfolio of homes, as opposed to just acquiring just a few properties. Let’s take a closer look to see if a portfolio loan will be the right product for you to create generational wealth.

Changes in lending options. 

Investors who expand from a few properties to a portfolio of properties will need to open the door to other loan products. Those who invest in single family homes or have 1 to 2 units are using traditional loans, conforming loans, bank loans, or single DSCR loans. If you are transitioning to a portfolio loan it is important to take everything into consideration before diving in. 

Is a portfolio loan right for you?

Pros to using a portfolio loan: Work smarter not harder! 

  1. All mixed properties are under one blanket
  2. One monthly payment
  3. Some have nonrecourse (Nonrecourse does not require a personal guarantee)
  4. Commercial based
  5. The loan is bases on the income from the properties
  6. Don’t have to pay for underwriting on each property
  7. Typically there is a better rate on a larger loan
  8. Can clear up some slots for you.
  9. Can use another person’s credit score if they are under your LLC 

Cons to using a portfolio loan:

  1. Lower LTV
  2. Individual appraisals are needed for each property
  3. Pulling a property out is a hurdle (You won’t be able to sell properties to generate money)

Flexibility of a commercial loan.

A portfolio loan can provide the flexibility you need to create generational wealth. One of the biggest benefits is that it provides the opportunity for you to use another person’s credit score as long as they are under your LLC. In doing so, a higher score can not only keep the transaction going, but it can open more doors. Another thing to keep in mind is that commercial loans are primarily based on the cash flow and the property value. This allows you to lock them in when rates are good so that you can use the slots to build up some additional properties on the side.

Create generational wealth.

By using a portfolio loan you are creating a bigger asset. More importantly commercial loans, unlike traditional loans, will not show up on your credit. Another thing to keep in mind is that banks often restrict your growth either by the number of properties or the loan amount. Those who are aggressive and use a portfolio loan will not only have the flexibility they need to be sucessful, but they will also create the generational wealth they want.

Is a portfolio loan right for you?

Real estate investors who have 20 properties or more need to start searching for other lending options. A portfolio loan is an excellent way to put all of your properties under one blanket loan. Is this the right loan for you? Contact us today to find out more about portfolio loans and other ways you can create generational wealth. 

Watch our most recent video to find out The pros and cons of a portfolio loan.

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Create Generational Wealth with a Portfolio Loan

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Create Generational Wealth with a Portfolio Loan

Real estate investors enter into this community with the goal of creating generational wealth. Generational wealth can be achieved by creating a portfolio of homes, as opposed to just acquiring just a few properties. Many investors wonder what needs to happen financially in order to successfully create a portfolio. Success begins by finding the right portfolio loan for your needs. Let’s take a closer look at how you can create generational wealth today by using a portfolio loan!

Changes in lending options. 

Investors who expand from a few properties to a portfolio of properties will need to open the door to other loan products. Those who invest in single family homes or have 1 to 2 units are using traditional loans, conforming loans, bank loans, or single DSCR loans. If you are transitioning to a portfolio loan it is important to take everything into consideration before diving in. 

Conforming loans:

Conforming loans limit investors to 10 properties and have a lot of qualifications that you need to meet. 

Bank loans:

Many people use bank loans when they have a portfolio, however, banks normally write their products for 5, 7, or 10 years. This means that every 5, 7, or 10 years investors have to refinance. Some clients are having to refinance properties every year depending on how their cycle is set up.

Portfolio loan:

A portfolio loan is used for 5 to 100 properties and covers all of the properties in one loan. This umbrella loan can not only help investors who have mixed properties, but it also prevents you from needing multiple loans. Another benefit is that a portfolio loan will provide you the support you need as you expand the number of doors per unit. 

Is a portfolio loan right for you?

Benefits to a portfolio loan:Work smarter not harder! 

  1. All mixed properties are under one blanket
  2. One monthly payment
  3. Some have nonrecourse (Nonrecourse does not require a personal guarantee)
  4. Commercial based
  5. The loan is bases on the income from the properties
  6. Don’t have to pay for underwriting on each property
  7. Typically there is a better rate on a larger loan
  8. Can clear up some slots for you.
  9. Can use another person’s credit score if they are under your LLC 

Cons to a portfolio loan:

  1. Lower LTV
  2. Individual appraisals are needed for each property
  3. Pulling a property out is a hurdle (You won’t be able to sell properties to generate money)

Flexibility of a commercial loan.

A commercial loan can provide the flexibility you need to create generational wealth. One of the biggest benefits is that it provides the opportunity for you to use another person’s credit score as long as they are under your LLC. In doing so, a higher score can not only keep the transaction going, but it can open more doors. Another thing to keep in mind is that commercial loans are primarily based on the cash flow and the property value. This allows you to lock them in when rates are good so that you can use the slots to build up some additional properties on the side.

Create generational wealth.

By using a portfolio loan you are creating a bigger asset. More importantly commercial loans, unlike traditional loans, will not show up on your credit. Another thing to keep in mind is that banks often restrict your growth either by the number of properties or the loan amount. Those who are aggressive and use a portfolio loan have the flexibility they need to create the generational wealth that they want.

Is a portfolio loan right for you?

Real estate investors who have 20 properties or more need to start searching for other lending options. A portfolio loan is an excellent way to put all of your properties under one blanket loan. Is this the right loan for you? Contact us today to find out more about portfolio loans and other ways you can create generational wealth. 

Watch our most recent video to find out how you can  Create Generational Wealth with a Portfolio Loan.

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How to Make Real Estate Investing EASY: 3 Steps to Getting A Fix and Flip Loan

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How to Make Real Estate Investing EASY: 3 Steps to Funding Your Fix and Flip Deals

How to Make Real Estate Investing EASY: 3 Steps to Getting A Fix and Flip Loan

When you’re looking to buy a value-add property like a fixer upper, then you’re probably also looking to get a fix and flip loan (aka, a hard money loan).

But what exactly does a fix and flip loan process entail for real estate investors?

Well, let’s take a look at the first 3 steps you need to take to fund your fix and flip deals. Because in order to make the most money, you need to make sure you’re working with the best lender. For you!

S0, here we go!

Know the difference between fix and flip lenders

Just like houses, real estate lenders come in all shapes and sizes. Some require in-depth real estate portfolios, good credit scores, and 10 to 20 percent into each project. These are typically the larger national companies.

Some lenders will work with newer investors with little to no money in the deal. Some will charge higher rates and less points. And some have a ton of junk fees, while some have none.

Overall, you’ll likely find the more flexible the lender, the higher the cost.

But to discover the best lender for you, you’ll need to shop around in your area.

Know what you bring to the table

If you want real estate lenders competing for your business, make it easy for them. Become a borrower that all lenders want to help.

What does that mean? Well, simply put:

  • Keep your credit score high
  • Get projects done on time
  • Pay your lenders on time
  • And build your real estate portfolio to show everything you’ve completed and who’s on your team.

Know what you’re looking for

It’s so important you know what YOU need. For example, do you need a lender who requires less money in? Less experience? Better rates? Faster closings? Just ask yourself, “What will make me the most successful?”

Once you complete these 3 easy steps, we can guarantee your search for the perfect fix and flip lender will be a great one. And that means your bank account will be very happy with you.

Ready to chat? Our team is here and ready to help you find the right loan for you!

Happy investing!

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