Busting Myths: What Is Hard Money

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Busting Myths: What Is Hard Money

Busting Myths: What Is Hard Money

What is hard money?

More importantly, what is it NOT?

Today, we’re starting a new series about busting hard money myths. Because there are so many rumors and misconceptions out there about this type of real estate funding. Unfortunately, most of these are negative.

Hard Money Loans for Real Estate Explained

Real estate investors all around the country say things like:

“Hard money is too expensive for me and my wallet.”

“It’s a trap!”

“Bank lines are so much cheaper.”

“Hard money is a curse!”

First of all, FALSE!

Second, we’re going to bust these myths and show you how hard money is not something to fear or avoid. In fact, it’s something to utilize so you can boost your cash flow and profits.

Yes, boost. Not obliterate.

But, before we dive into each myth in our upcoming video series, let’s talk about hard money.

Here are 3 keys facts you should know:

  1. It’s a special type of loan that’s usually secured by a real asset—aka, real estate. The funds for these loans is typically provided by private investors or companies.
  2. They’re not like normal bank loans that you pay off for 15-30 years. They’re meant to be short-term. Like, 3 to 9 months. You can pay them off quicker or slower than that timeframe, but this is the typical range.
  3. They’re perfect for real estate investors who want to buy value-add properties FAST, because hard money loans can get closed in days, not weeks. They’re ideal for buying discounted non-MLS properties. For example, think about wholesalers and other under-market deals.

Now that you have a better understanding of hard money, we can dig into the myths and misconceptions that revolve around it.

Our new video series busts these myths and show you how it isn’t something to fear or avoid. It’s actually something to use so you can generate positive cash flow and profits.

So, are you ready to talk about your real estate funding options? Great, our team is here to help.

Happy investing!

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How to Make Monthly Income: 3 Methods for Real Estate Investors

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How to Make Monthly Income: 3 Methods for Real Estate Investors

How to Make Monthly Income: 3 Methods for Real Estate Investors

Have you always wanted to learn how to make monthly income? Well, today we explore 3 methods for real estate investors.

As a real estate investor, you likely believe cash flow is king. Because why else would you put your hard-earned money into value-add propertied?

Hopefully, a lot of it.

But let’s take a step back and ask ourselves:

“What is cash flow?”

Because, the truth is, all of us have different goals, expectations, and perspectives when it comes to making money off our investments.

There tends to be 3 popular approaches to cash flow. These include:

  1. Putting less money down
  2. Making monthly income
  3. Using cash-out refinancing to gain the most leverage

All of these cash flow methods share two common similarities:

  • Using the BRRRR method.
  • Buying discounted properties (non-MLS listed properties).

Let’s take a closer look at the second cash flow approach:

Making monthly income.

3 EASY Ways to Make Monthly Income in Real Estate

This is probably the most common strategy among real estate investors, because most of them like to create a consistent monthly income. Why? Well, probably because they want to:

  • Replace a full-time job;
  • Supplement their current income;
  • Or create a nice sized nest egg for their future.

Let’s look at an example.

Jane the Investor doesn’t mind putting SOME money down at closing. And, on top of using the BRRRR method and buying discounted properties, she tends to focus on 3 methods to ensure she makes positive monthly income.

What are these 3 methods? Well, let’s take a look.

  1. Focus on maintaining a healthy credit score. The higher your credit, the better your rates, which means you pay less money to the banks and keep more money in your pocket. Every. Month.
  2. Choose investor-friendly real estate lenders who offer options. We’re not just talking about one or two options, but many. More options means better financing. And better financing means, yet again, less money to the bank and more money in your pocket.
  3. Invest in higher quality properties. That means putting some work into a value-add property so it’s, well, nicer. Nicer properties tend to draw tenants who treat the property, well, nicer! They’re more respectful and cause less damage than tenants who rent lower quality properties. Better yet, when a property looks nicer, it tends to be more desirable. That means demand increases and you can charge a higher rent. And higher rent means higher cash flow.

So, there you have it! If you’re looking to generate solid, consistent, monthly income, then this would be a great strategy to take.

Ready to discover how you can make a good monthly income? Great, our team is here to help.

Happy investing!

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How to Put Less Money Down on Your Real Estate Deals

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How to Put Less Money Down on Your Real Estate Deals

How to Put Less Money Down on Your Real Estate Deals

When you put less money down on your real estate deals, you keep more money in your pocket.

Now, if you’re a real estate investor, then chances are you put a lot of focus on positive cash flow.

But what does cash flow really mean?

Well, all investors have a different perspective, but most fall into 3 popular categories:
  1. Putting less money down.
  2. Making monthly income.
  3. Gaining leverage with cash-out refinancing.
All of these cash flow strategies share 2 common similarities:

Today, let’s dig deeper into the first cash flow strategy: putting less money down.

Put Less Money Down on Real Estate Investments

Investors who take this approach like to focus on leverage. Limiting the amount of money in each real estate deal leads to higher leverage. Higher leverage means you keep more money in your bank account. But it also means you lower your MONTHLY cash flow.

But that’s okay. It’s not always about monthly income.

It’s also about equity.

Investors who use this strategy aim to limit their initial outflow so they can keep more money in their pocket, and possibly buy more value-add properties with the same money.

What do we mean by that? Well, let’s take a look at a sample:

Let’s say Jane and John each have $50,000 to invest.

Jane decides to buy her property at the full retail value of $250,000 with a 20% down payment.

20% / $250,000 = $50,000

That’s Jane’s entire savings. So, she can only afford to buy the one property and must save up to buy another.

John, on the other hand, decides to use the BRRRR strategy to invest his $50,0000. Because he wants to limit the amount of money he puts down at closing.

So, John finds a wholesale property (aka, a discounted property) for $225,000 that has an ARV of $300,000. He puts $25,000 in for renovations, which leaves him with $25,000 in his bank account. Plus $50,000 of equity. He can use that money to do, well, whatever. That includes buying more value-add properties. We’re talking 2-4 additional houses.

So, while Jane used all of her $50,000 to buy ONE property, John used his $50,000 to buy multiple properties. Or simply live more comfortably.

Does this sound like your kind of cash flow strategy?

If not, no worries. There are still plenty of strategies to take, and our team is here to help you discover which one works best for you. We’re excited to set you on a path that makes you the kind of money you need…to live the life you want.

Happy investing!

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How to Make More Money: 3 Cash Flow Strategies

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How to Make More Money: 3 Cash Flow Strategies

How to Make More Money: 3 Cash Flow Strategies

How can you make more money? Well, today, we’re going to explore 3 cash flow strategies that will make your wallet very happy.

3 Cash Flow Strategies for Real Estate Investors

First of all, when most of real estate investors think about real estate investing, they think cash flow!

But here’s the thing.

Everyone has a different definition of cash flow.

For example, what cash flow means to John might differ from what it means to Jane. And what Jane values might drastically differ from what Jack values.

Of course, even if their cash flow goals differ, there are a few similarities between John, Jane, and Jack. Those similarities include:

  • Using the BRRRR method
  • Buying discounted properties
  • Making money (obviously!)

Now, while John, Jane, and Jack might share a few similarities in the real estate world, they also share many differences, especially when it comes to generating positive cash flow.

What kind of differences are we talking about?

Well, let’s take a look at their 3 individual real estate methods:

  1. Less Money Down: John likes to focus on leverage. He wants to limit his initial outflow so he can keep more money in his pocket. This strategy tends to work best for him and other investors who want to break even every month with their tax write offs.
  2. Making monthly income: This cash flow strategy is probably most popular, because it’s all about making money every month. Jane, who likes to take this approach, doesn’t mind putting some money down at closing. She also has a reason for wanting to generate consistent income each month. For example, she might need it to supplement her current income, replacing a full-time job, going on a big vacation every summer, or another reason.
  3. Refinancing: While some investors want to see money flowing into their bank account every month, others, like Jack, prefer to wait 2 to 3 years to refinance—or whenever there’s a movement in equity. When equity rises, Jack likes to get his money out of a property to use for his life and/or to buy more value-add properties.

As you can see, cash flow comes in all shapes and sizes.

  • John focuses on less money down.
  • Jane focuses on monthly income.
  • Jack focuses on refinancing.

Is one real estate method better than the other? Absolutely not. All 3 are valid cash flow strategies. It just depends on which one works best for you and the lifestyle you want.

So, what’s your strategy?

Our team is here to discuss your options, create a personal strategy, and set you on the path to making the kind of money you need.

Happy investing!

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3 Ways to Make More Money: How to Triple Your Cash Flow

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3 Ways to Make More Money: How to Triple Your Cash Flow

If you constantly dream of living your ideal life, but keep coming up against obstacles, then check out these 3 ways to make more money and starting tripling your cash flow.

 

Here are 3 ways you can start making more money today:

Boost your credit score.

Maybe you’ve heard this before, maybe you haven’t, but it bears repeating again and again.

Your credit score matters.

A lot!

The products you have access to, and the interest rates you pay all stem from your credit score. Which means your score can cost you thousands of dollars if it’s not high enough. It can also cost you the real estate loan you need.

We’re not talking about a 50-point difference. We’re talking about a single point. That’s right. Just one! For example, a score of 680 will get you a traditional conforming loan, but a score of 679 won’t.

That’s just one point.

So, what can you do to start boosting your credit? Well, here are a few tips:

  • Go private
  • Get authorized
  • Pay extra

Buy Discounted Properties

You can do what most people do and find a full-priced property on the MLS. Or you can connect with a wholesaler and take advantage of under market properties (aka, discounted properties).

Get out of your hard money loans.

If you buy a property through a wholesaler, or if you can’t obtain a traditional loan through a bank quite yet, then chances are you’ll need a hard money loan.

And, yes, hard money loans are expensive. So, you don’t want to get stuck in one too long. But maybe you ARE stuck right now. Well, you can boost your cash flow by finding a way out.

And there are options for everyone. That includes real estate investors who:

  • Haven’t been self-employed for more than 2-years.
  • Like to write everything off on their taxes.
  • Or haven’t owned a value-add property for more than a year.

These are just 3 ways you can triple your cash flow. And we can help you with each one!

Ready to chat? Great, our team is here to help you create a plan.

Happy investing!

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How To Buy 3 New Rental Properties This Year

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How To Buy 3 New Rental Properties This Year

How To Buy 3 New Rental Properties This Year

How does buying 3 new rental properties in 2021 sound? Whether you’re just starting out in real estate investing, or you’ve been around the block a few times, this is an achievable goal.

Really!

It all starts with 3 key steps.

This is How to Buy 3 Rental Properties in 1 Year

Step 1: Buy discounted properties.

Sure, you can try and find properties on the MLS, but you’ll have way more luck finding discounted properties through wholesalers.

Step 2: Buy FAST with a hard money loan.

Hard money is great because it doesn’t have the same timeline as conventional and other traditional loans. With hard money, you can close within days, not weeks or months.

And if you’re buying discounted properties from wholesalers, closing fast is essential. Because wholesalers have strict deadlines. Very strict. So, if you can’t close within a couple of weeks, then you might as well say bye-bye to those cash-flowing, value-add properties.

But we get it. Hard money is expensive. That’s why step 3 is so important.

Step 3: Refinance FAST out of a hard money loan into a long-term loan.

Like we said before, staying in a hard money loan too long can be pricey. So, the sooner you can refinance out of it, the better for you and your bank account.

Now, some of you might be thinking, “I can’t refinance into a long-term loan. The banks don’t like me.”

Well, here’s the truth: You have HUNDREDS of options when it comes to refinancing. Forget squeezing yourself inside a bank’s itty-bitty box of requirements. You can explore all sorts of options to ensure you’re able to buy a property fast with hard money, and then refinance fast with a long-term loan.

The key to all of this is working with the right lenders. Ones who know how to handle both hard money AND long-term loans.

Like us!

We’re able to help you buy fast through our company Hard Money Mike. Then we’re able to help you refinance into a long-term loan with our new sister company, The Cash Flow Mortgage Company.

Our unique, efficient, two-step approach to lending is critical to tripling your properties…and tripling your cash flow.

Remember, it’s all about:

  • Buying discounted properties.
  • Buying fast with a hard money loan.
  • Refinancing fast into a long-term loan.

Ready to buy 3 new rental properties this year? Let’s talk!

Happy investing.

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Real Estate Goals: How to Turn 2020’s Lemons into Lemonade

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Real Estate Goals: How to Turn 2020's Lemons into Lemonade

Real Estate Goals: How to Turn 2020’s Lemons into Lemonade

It’s 2021, which means it’s time to come up with some fresh real estate goals.

The year 2020 had its opportunities, sure. But we think it’s fair to say that, overall, it was a year full of lemons.

Lots and lots of lemons.

Make Money In Real Estate - Turn Lemons into Lemonade

And, yeah, we know 2021 isn’t going to be overflowing with daisies. But we think it’s time to take 2020’s lemons and make them into lemonade (hmm, lemonade!). It’s time to come up with more than goals and resolutions this year. It’s time to come up with a plan. A plan to:

Let’s not wallow in fear and uncertainty in 2021. Instead, let’s look on the bright side and generate positive cash flow. Because in good times, bad times, and in-between times, someone will always make money. Why not you?

So come on, let’s chat about your goals and a plan to achieve them this year. Because our team is eager to set you on a path to help you make the kind of money you need to live the life you want.

Happy investing!

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How to Get Out of Your Hard Money Loan Now

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How to Get Out of Your Hard Money Loan Now

How to Get Out of Your Hard Money Loan Now

Do you know how to get out of your hard money loan?

Because if you’re a real estate investor and like to buy value-add properties FAST, then these are the types of loans you likely rely on. And if you work with wholesalers (who have tight, strict deadlines), then you most definitely need to use hard money to close your real estate deals.

But that doesn’t mean you want to get trapped in a hard money loan. Nobody wants that! Even as a hard money lender, we don’t want you to get stuck with high interest rates for months and months.

That’s why it’s important to know you have options. Hundreds of them!

How to Get Out of Your Hard Money Loan Now

Yes, you heard that. YOU have options, even if you don’t have:

  • Tax returns
  • Income
  • A business partner
  • Or a company name

So, as a real estate investor, why do you need hard money?

Well, as we mentioned above, it’s great for buying discounted, value-add properties, and then renovating and renting them. It’s also great for taking advantage of the free equity you get from discounted or wholesale properties.

But what can you do when you’re in a hard money loan and you’re ready to get out (meaning, you’ve already renovated and rented the property)? But you can’t get a traditional/conforming loan because you don’t qualify for a bank’s strict requirements?

The bigger question: How can you stop your hard money loan from eating up all of your positive cash flow? What can you do to stop giving your lender all of your profits, rather than yourself?

Well, here’s the thing. Both banks and lenders don’t like to tell you that you have OPTIONS.

Just because you haven’t been self-employed for more than 2 years, or you don’t have tax returns to show (or you don’t want to use them), you can refinance into a more affordable loan. And with that new loan, you can:

  • Keep it away from your credit score (because the more loans you have, the more it impacts your credit score).
  • Put it under your LLC’s name.
  • Have unlimited projects.

To find that affordable, flexible loan, all you really need are 2 things:

  1. A good credit score (if you need boosting tips, check out these videos on our YouTube Channel).
  2. A lease that will cover the rental payment.

Trust us when we say, you don’t need to get stuck in a hard money loan. Every real estate investor has options.

If you’d like to discuss your options, our team is ready to help!

Happy investing.

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Real Estate Deal: Why Did My Bank Say No?

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Real Estate Deal: Why Did My Bank Say No?

Are you trying to close a real estate deal, but your funding was rejected? Are you wondering, “Why did my bank say no?”

Well, you’re not alone. Many real estate investors always been told: Find a bank and create a relationship with them. If you do, then life (and loans) will be easy.

So, why, after building these so-called relationships do banks still say no every time you apply for a real estate loan?

How many of us have been in this situation? Well, probably most of us.

But, why?

The reason most banks say no is because they only have 1-2 options for real estate investors. At best! And, wait for it, you probably don’t currently fit in their tiny, little boxes.

The truth is, banks carry very limited options for real estate investors.

Banks have many loans coming in their door. Too many. That means they can cherry pick. If it doesn’t fit in their itty-bitty box, they can just tell you, “No.”

So, you probably won’t fit in most banks’ small, strict, picky boxes if you:

  • Are a new investor.
  • Like to write everything off on your tax returns legally.
  • Want to refinance before you own a property for an entire year.

We’re talking about 97% of banks.

Even worse, banks won’t want to refer you to someone who can say yes. Because then you’d start asking too many questions on why they can’t give you a loan. Banks might not want your real estate investment loan, but they definitely want to keep your deposits and bank accounts.

The inside secret here is you need to call a lot of banks until you find one that’s still lending to investors and has a loan for you.

But be warned!

No bank will agree to close a real estate loan for you if your income doesn’t fit inside that tiny, little box of theirs.

You also always need tax returns with banks, and they need to be the type of tax returns where you can’t write everything off. And here’s the kicker of it all: You might find a bank that works for you, but then they decide to stop lending to investors. It just happened here in Colorado. One of the top investor banks just stopped lending.

So, when banks say no to you, understand that this is their usual response. You always have to remember they have limited products and limited amount of funds to lend out.

But don’t get discouraged!

Just look for a lender who focuses on real estate investors and offers options.

Because, really, there are HUNDREDS of options for investors. Options for:

Options and strategies will always accelerate you faster than trying to change your circumstances to fit all those small, itty-bitty boxes of banks.

That’s why we focus on investors, offer hundreds of options, and develop personal strategies to help you multiply your cash flow.

Ready to chat about your next value-add property’s funding? Our team is here to help!

Happy investing!

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How to Buy a Property with ZERO Money Down

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How to Buy a Property with ZERO Money Down

How to Buy a Property with ZERO Money Down

Did you know you can buy a real estate property with zero money down?

It’s true! Just check out these 4 key steps:

4 Crucial Steps to Buying Real Estate with ZERO Down
If you want to buy a property and put less money (or no money) down, then check out these 4 steps.

Buy discounted properties.

You might be able to find discounted properties on the MLS. Maybe. But you’ll probably have more luck finding them via a wholesaler. Especially when it comes to value-add properties (i.e. fix and flips and rentals).

Set up your loan properly.

This is an important 2-Step Process. The trick is to purchase with a hard money loan, and then quickly refinance with a long-term loan. That way you can get the highest loan amount possible. It all starts with discovering what you qualify for on the long-term side. Once you know what that loan looks like, you can match that number to your hard money loan.

Use rate and term, NOT cash out.

Okay, deep breath.

We’re not going to get into the nitty gritty of these mortgage terms, but we are going to highlight the significant differences.

Setting your loan up as a cash out can be very tempting. You get money at closing. What’s better than that, right?

Well, did you know when you set up your loan as a cash out, you:

  • Pay higher costs
  • Take a lot longer to refinance out of your expensive hard money loan
  • Qualify for lower loan amounts

With a rate and term, all of that changes. You:

  • Spend far less cash up front
  • Refinance out of pricey hard money loans a lot faster (like, we’re talking months faster than a cash out)
  • Enjoy lower rates

Better yet, your cash flow will multiply because you get to do more with your money when you pay less for your loans. This is actually a simple process to set up if you work with someone who can help you with both your hard money and long-term loans.

Put zero money down by finding the right lender

To seal the deal, find a lender who can handle these kinds of loans.

Unlike most other lenders, our team has the expertise, knowledge, and ability to handle everything from hard money to conventional loans. Plus, we treat you like a teammate, not a number.

With our help, you can start buying your properties with no money down today. Let’s chat!

Happy investing.

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