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What We Know:

Rates on the conventional side have maintained strong with rates in the low 3’s. If you’re still wondering whether or not you should refinance, we’re going to dive into what we call ‘The Tipping Point Rate.’

This week, we’re seeing more larger non-conventional companies dipping their toes back into the investor loan water. This gentle ease back in helps increase liquidity, but it still comes at a price:  Lower LTVs and higher costs.

What This Means for You:

There is an exact rate where it’s wise to refinance. We call this ‘The Tipping Point Rate.’ This specific rate is the point where you won’t pay a penny more in principal and interest over the life of the loan.

Calculate the tipping point rate on your refinance

Going above this point might increase your cash flow, but it will end up costing you more in the long run. Sometimes this means it’s better to stick with what you have now.  We’re focused on putting more money in your pocket and less in the bank’s pocket.

This is for investors looking to increase monthly cash flow without adding lifetime cost of debt. So, if you’re solely concerned about your monthly cash flow, this probably isn’t the program for you.

So how does this work? Let’s take a look at an example.

Joe is an investor who is looking at refinancing to increase his cash flow every month. But not if it means paying tens of thousands of dollars extra to the bank in principal and interest.

Joe has been paying his current mortgage for 5 years. If he keeps the loan until it’s paid in full, he’ll end up paying $360k in payments over the next 25 years.

Joe wants to know the exact rate that he can refinance to a new 30-year fixed without increasing his amount owed. If it exceeds $360k, then he won’t refinance.

By knowing this exact rate, he can stretch his payments out and lower his interest rate without paying a penny more over the life of the loan.

How do we find Joe’s Tipping Point Rate?

Luckily, we have a handy program that can calculate just that.  If you would like to know your own Tipping Point Rate, send us an email!  We’ll run the report specifically for you and your property!

Note: The Cash Flow Mortgage Company doesn’t currently lend in all states, but we are always happy to help and make sure you understand your numbers!

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

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We might be based in Colorado, but that doesn’t mean that as our client you have to miss out on deals in other states! In fact, Hard Money Mike lends on properties in several states, like with this Texas fix-and-flip!

Texas fix-and-flip deal

We love seeing our clients crush their investment goals, even from afar! Take, for instance, this Texas fix-and-flip property purchased by one of our clients. We were able to fund this deal in a week.

Yes, you read that right.

Investors and wholesalers alike will find the short-term loan process at Hard Money Mike quick and easy. We pride ourselves on making it easier to get the cash flow you need for quick property purchases. Who wants to wait around when they’re trying to close a deal and add to their investment portfolio?

In other words, we want to help you make more money even faster!

Hard Money Mike is a lender based in Colorado, lending money on all types of commercial based properties: fix and flip, land, whole tailing, and builder bridge loans.

Have your eyes set on an investment property on the single-family or commercial building side? The Cash Flow Mortgage Company funds investor loans on properties in both of these categories. Long story short: whatever deal you’re trying to fund, chances are, we can help you get it done!

Give us a call:

Hard Money Mike  303-539-3000

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

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What We Know:

The markets are stabilizing, and underwriting term times are back in pre-Covid standards.

With rates for single-family investor properties on conforming loans hovering around the low 3’s, it might be time to look at locking in and increasing your cash flow.

What This Means for You:

As an investor, there is money in the money—Your money!

Your credit score is the key to keeping more of your money. No matter your income situation, the better your score, the cheaper the money. Cheaper money equals more cash in your pocket.

Investor Credit Score impact

Last week, we showed you how much money can be saved with a good credit score. Now, it’s time to go over how to increase that score quickly.

How to raise your score and increase your cash and cash flow

Want to save money as an investor? It might be time to crunch the numbers

Do you want to keep money in your life or keep supporting a banker’s life? We’re pretty sure we know the answer to that particular question.

They say that Vegas was not built on the gambler’s winnings. The same can be said about banks. Banks keep popping up everywhere, even when most banking has gone online.

 

Why is that? Because they know there’s money in your money.

 

So how can you better prepare your credit score for an investor loan?

  1. Plan before you apply by checking your score online.
  2. Stop applying for ANY credit at least 60 days before a loan application.
  3. Raise your score with one or two of these simple methods:
    • Use private money when you can and keep it off your credit. If you can borrow from a private individual or entity that doesn’t report on credit to pay off/down your credit, do it BEFORE your next statement date.
    • Don’t close paid off accounts.
    • Pay down your credit cards before due dates. This will take extra cash now, but it will save you tens of millions in the future.
    • Keep balances below 30% of outstanding balances on revolving accounts like credit cards.
    • Dispute any item that should not be on your report.

This list does not include paying your accounts on time. That’s a no-brainer. You should always pay on time. There’s typically no quick fix for late payments.

Stay tuned, because next up, we’ll be covering how to check your credit on your own! In the meantime, if you have questions about your score, what it’s costing you, or what a better score could save you, reach out! We’re always happy to go over the numbers with you!

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

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a less than perfect credit score is eating away at your profit.

How much money might a lackluster credit score be costing you over the life of your investment business?

the impact of your credit score

You probably hear a lot of talk in the mortgage industry about your credit score and the effect it can have on your interest rates, but do you really have an idea of how much it’s affecting your bottom dollar?

Do you know how to determine your Return on Credit (ROC)?

Can you crunch the numbers to figure out how much your score is helping your cash-flow (or how much money it’s sucking out every month?)

These calculations can get complicated, but the takeaway here is that a less-than-stellar score can really be costing your tens of thousands of dollars over the lifetime of your loan. And when your loan is on an investment property, (or several,) you may as well be lighting your profits on fire.

a less than perfect credit score is eating away at your profit.

We want to help! Contact our team so we can help you see where you’re currently at, and where you could be going instead.

Let’s get you to your goals faster by trimming some of the fat from your financing!

Hard Money Mike is a lender based in Colorado offering services in several states. We lend money for all varieties of commercial-based properties. So whether you’re trying to finance a fix-and-flip, vacant land, whole-tailing, or looking for a builder bridge loan, we’ve got you covered.

Call Mike Bonn at: 303-539-3000 or email Mike@HardMoneyMike.com

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

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to refi or not to refi

To refi, or not to refi: That is the question.

And we get this question a LOT. “Does it make sense to refi if I only plan to hold onto the property for a few more years?”

Earlier this week, we discussed the power of refinancing (and the math behind it.) Do the numbers support taking on extra years of payments?

For some of you, they do. For others, you might be left thinking, “But wait! What if I’m not going to keep the property for 24 or 30 years? At what point does it actually make sense to refinance?”

However, if you are not going to keep the property through the next 30 years, you’ll need to look hard at what the costs will be over the expected period. The key here is determining which path will cost you more money and which one will keep more in your pocket.

GOAL: Keep more money in your life and less in the hands of bankers.

Let’s look at an example:

You’re planning to keep a property for 3 years and then sell it. The question is, what will put more money in your pocket and cost you the least over those next 3 years?

Here is how we figure this out:

Step 1: Ask your mortgage company to run an amortization chart on your current loan and your new loan.

2: Then, pull your principal and interest from your current mortgage company’s website.

3: Next, ask your mortgage broker to give you the principal and interest from the new loan.

4: On each loan, multiply the payments by 36 (the 3-year window before you sell the property) and add the balance of your loan at the end of 3 years.

5. Lastly, compare notes and find out what would be the lowest amount. This is the one that will keep more money in your pocket.

Ultimately, this is just a pure and simple scenario of determining exactly how much the loan will take out of your pocket over the course of 3 years. We’re not looking at monthly cash flow, because true dollars out are pure and simple. This is your true cost out of your pocket.

If you need help, we’re happy to step in. Give us a call, and we can run all the numbers for you and see if it makes sense.  If it does, we can help you out even further by securing low rates and costs on your refi!

*All non-commercial and construction loans offered by TNS Loans NMLS #1719349

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Non-Conventional Mortgage Loans Are Making a Comeback…

Non-conventional loans are closing again

Non-conventional mortgage loans are getting funded again.

What We Know:

Finally, we’re seeing an influx of non-conventional mortgage loans being funded. Hopefully, this positive change is bringing some relief to both investors and their buyers who don’t fit neatly into the conventional mortgage lending box.
 
Mortgage loans in this lending bucket typically do not require tax returns but rely on bank statements or leases for income.
 
Even though some are back, requirements for securing these loans have increased and are a little harder to obtain.  The majority of the lenders have a starting point of a max 65% LTV and a credit score of 700+.  The good news is the rates have not skyrocketed. There are now lenders lending who had previously been turning away would-be investors.
Light at the end of the lending tunnel

There’s a light at the end of the lending tunnel again.

 

The Takeaway:

We are on the road to lending opening back up. The economic restrictions and resulting uncertainty appear to be lessening. Apparently, to the point where lenders are feeling confident enough to begin closing riskier deals again.
Make no mistake, it will be a slow process. But there appears to be a light at the end of the COVID lending tunnel. Stay tuned as we provide continuing outlook updates over the course of the coming weeks.
In the meantime, if you’d like to review your financing options for investment properties, feel free to reach out! We’re always happy to run your numbers with you.
*All non-commercial and construction loans offered by TNS Loans NMLS #1719349
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95% of investors are controlled by the banks. The other 5% control their own destiny.

Which group do you want to be in? 

 

History is repeating itself.  Banks and lenders are closed up and running away from loans for the investment community.  They’re backing out of deals just minutes from the closing of a loan, without the courtesy of so much as a “Sorry.”

Right now, the majority of real estate investors (95%) rely on banks and traditional lenders as a means to fund their deals. That means when the banks decide to stop lending money, they stop you from succeeding.

 

Let’s change that!

 

Now, more than ever is the perfect time to take back control of your financial future.

 

How? By partnering up with people who have money ready to invest! Mom, your bestie, neighbor, gym buddy—anyone with cash to invest has the ability to help fund your investment deals. It doesn’t HAVE to be a bank or traditional lender. 

Be a power player and join the 5% who don’t sweat economic disasters.

 

Want to dip your toes into the world of OPM (Other People’s Money) funding, but not sure where to start? Sign up for our Into to OPM Webinar! We’ll be going over the basics and answering your most pressing questions about how to secure financial freedom for your investment business, EVEN when the banks are saying “No.” 

 

Sign Up Here >>>

 

Just remember: Keep it legal, keep it safe, keep it honest.

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If you’ve been watching the mortgage industry reports over the past few weeks, it shouldn’t come as a shock to you that the banks are quickly closing their doors to investors. In fact, if you run an investment property business and have relied solely on traditional funding, it’s practically impossible to find money to close your deals the old-fashioned way. 

 

But don’t give up hope just yet. We’d like the chance to introduce you to your new funding partner: Cash money.

If you need funds to close your deals, the quickest way to secure it in these unprecedented times to STOP relying on banks and traditional financing options. Believe it or not, there are tons of other sources of investment capital out there, and they just so happen to already be in your phone’s contact list.

 

When it comes time to fund your next deal, instead of turning to the bank and patiently waiting to be shot down, why not place a call to a potentially willing partner instead? Whether it be a grandparent, a fellow real estate investor, your golfing buddy, or your next-door neighbor, chances are you already know someone who might be looking to make their savings balance work a little harder for them (and therefore, you!)

Asking acquaintances or friends for funds can be a tricky subject, but with the right approach, it’s perfectly possible to do so while keeping it legal, safe, and honest – not to mention PROFITABLE – for all parties involved.

Don’t be beholden to banks. Money is king, so take back control of your financial future and put yourself where the money is.

We can help you start the conversation with our Guide to OPM Funding Webinar series! Get more info and signed up here >>>>

 

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Now isn’t the time to improve anything. It’s time to change everything.

 

Are you aware that over the course of the past few weeks, almost all lending for the investment community has dried up? Not only that, but it’s uncertain how long it will be before these products become available again.

But this doesn’t mean the end of the road for investment-based businesses who rely on funding to complete their deals.

 

Why should banks control us and our financial future? If they choose to close their doors and refuse to lend money to investors, then so be it. It’s time to change how the lending world works. 

 

Just because the economy takes an unexpected nosedive doesn’t mean our investments need to. When the banks say no, we can remain in control of our financial futures by turning to personal funding partners. 

 

OPM- or, Other People’s Money – funding is one of the best ways to gain and keep control over your finances as an investor and gives you the freedom to continue your business, even as the banks batten down the hatches.

 

Want more info on how to make the switch to funding your deals using OPM? Join us for our next weekly webinar! Whether you’ve dabbled with this way of doing business before, or you’re on the fence about how and when to get started, we’ll make sure you’ve got the information YOU need to thrive during these uncertain times.

 

Get signed up here! >>>

 

Just remember: Keep it legal, keep it safe, keep it honest.

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Investor mortgage report

Why did all the banks just make it damn near impossible to get a loan on an investment property?

 

 

For lenders, times are more uncertain than ever.

 

With conventional/standard loans as the only lending option available for rental investors, lenders went and changed the rules…and not in the investor’s favor.

 

As of this week, the new underwriting criteria has hit 90% + of the market for investor loans on rental properties. Plus, most lenders now require a minimum of 6 months reserves (and, a lot of times, up to 12 months) for every rental property that has a loan on it. That’s right. If you have four rental properties, you now need at least 6 months of payment reserves on each property. That adds up quickly.

 

That may not even be the worst of it.

 

In addition, most lenders are not allowing borrowers to use the rental income from their properties to qualify. If they do, they might only allow a very low percentage of the rent (like 50% of gross rent). That means if you have rent coming into a property at $2K, they may only count 50%, or $1K, of that towards your expenses (if they allow you to use it at all). In this example, if the rental property has expenses at or above $1K (and most will) the underwriters will expect you to cover the shortage with other non-rental cash flow.

 

So, if you don’t have great credit (lenders have raised the threshold here, too) and other income to qualify for a new loan, you will be out of luck…for now.

 

We don’t know how long this will last. It might be weeks, but more likely months. Nobody will know until banks and lenders figure out how current stay at home orders will affect the markets.

 

So, why exactly is this happening?

 

 

Once the lenders get the data, they will adjust. Let’s cross our fingers that rents are being paid and, likewise, mortgages are kept up.  This flow of money will help bring lenders and loan choices back to our market.

 

What can you do?

 

  • Keep informed on what is happening in the lending markets. If you are selling properties, then stay updated for your potential buyers, too.
  • Keep paying your mortgages. This will help the overall market, but especially you when you are looking to borrow in the future for better rates (the rates are expected to be great after we return to some normal) or new opportunities.
  • Keep your credit score high and keep working with your renters to pay what they can when they can.

 

Remember the loans and rates will come back. When they do, be prepared to take advantage.

 

If you have a credit score at or above 760, and have ability to income qualify, then your rate estimates this week for conventional loans look like the following:

 

  • Paying closing costs rates for rental properties (1-4 units) in the high 3’s for a rate and term. Typical break-even point is between 2 and 2.5 years.
  • Paying little to no closing costs rates are high 4’s (best for strategies for keeping a property under 2.5 years).

 

If you want to know where you stand and what you can do, schedule a time to discuss your lending needs with us today by emailing mike@thecashflowcompany.com.

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