Tag Archive for: financing

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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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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Conventional mortgage rates are showing signs of improving.

Thankfully, it’s looking like another great week for standard conventional mortgage rates.

So far this week, all evidence is pointing towards increasing stability and improvements on the conventional mortgage front.

  • Depending on whether you pay your mortgage person points or you have them wrapped into your loan, rates fluctuate between low 3’s and low 4’s.
  • We’re seeing great rates on the conforming side.
  • Every week, the non-traditional loans are reappearing with increased frequency.  
  • Some lenders have decreased credit score requirements to 680.
  • Rates are still on average above 7%, but signs are showing that they will drop soon.
  • LTVs are inching higher, but not to the degree we have seen them in the past.

In short: conventional mortgage interest rates are really good. But what does that mean for you?

How do you know when it’s smart to refinance your rental (or any) property?

 

Let’s face it: as rates drop, the question of whether or not to refinance runs through all our minds.

Would you like to find out (without the sales pitch from your mortgage person?)

Anyone can crunch the numbers in just a few minutes with just a few items.

Yes. It involves math. But we swear it’s EASY

For now, all you need is a piece a paper, a pen, a calculator, and your mortgage information. (You can pull this info directly from your mortgage company’s website). Then, follow these three steps:

Step 1: Locate the amount you pay monthly for principal and interest. (Ignore everything but your principal and interest (i.e. taxes and insurance).

Step 2: Locate the number of months remaining on your loan. 

Step 3: Multiply your monthly payment by the number of months you have left on your loan. 

That’s it! 

 

Let’s look at an example:

A: Your monthly principal and interest payment is $1,200

B: You have 288 payments left on your loan.  

C: $1,200.00 X 288 = $345,600 

(Scary sometimes to see how much you really owe, isn’t it? Don’t panic.)

Now, let’s say that you have an opportunity to refinance and lower your interest rate with a new payment of $1,100. Should you do it?

 

Let’s take a look:

On your new loan, you’d pay $1,100.00 for 30 years (or 360 months). That’s $1,100.00 x 360 = $396,000.00

If you refinance, you’d increase your monthly cash flow $100.00. However, as a result, you’d pay an extra $50,400.00 over the life of your loan! 

So, is the extra $100/month worth an extra 72 months (6 years) of mortgage payments? Does refinancing make sense for you financially? Well, that’s up to you.

Perhaps cash flow is more important at this time in your business life and paying the extra years is ok with you. That’s a decision only you can make. At least when you know all the numbers, you can make your call an educated one.

 

Try it on all your loans and find out what makes sense for you!

 

Your payments __________________ Months remaining _______________

Total remaining to be paid ___________________

 

Okay, we’re sure a few questions are swimming around in your head, so we’ll see if we can answer some of the most common ones upfront:

Q: “What if I’m not going to keep the property for 24 or 30 years? At what point does it make sense to refinance?” 

A: That’s coming up in the next article.

 

Q: “What if I want to use those savings and pay down my mortgage?” 

A: We’ll be addressing that in a future article as well.

 

Q: “What is my breakeven interest rate?”

A: There are so many paths you can go down and we’ll cover as many as we can. We’ll also provide a tool for you to run all these scenarios.

 

Today, it’s all about knowing your raw numbers.

Want an investor tool that can run these numbers (plus your breakeven rate and many more) in seconds? We have one in the works. Just get on our contact list, and we’ll let you know when it’s ready!

By knowing these numbers, you can save tens of thousands on each refinance.

 

Don’t feel like doing this or worry the math might overwhelm you? No worries! Shoot us an email with your current statement and we can run them for you.

*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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investment power player

Be a real estate investment power player by harnessing the power of OPM funding.

You don’t have to be a bench warmer in the real estate investment world. Transform yourself into a power player! 

 

It’s easy to think that with the COVID-19 shutdowns, stay-at-home orders, and lasting economic uncertainty that now is an okay time to sit idle and just see what happens in the real estate investment world.

 

And that would be your first mistake.

 

By many standards, there’s never been a better time to go all-in for your real estate investment business. Mortgage rates are low, making previously out-of-reach properties insanely affordable. Showings are still under a good deal of restrictions and safety precautions. But this just means the buyer pool is limited to the extremely serious. Great news for fix-and-flip investors looking to turn a quick profit!

 

It’s true, the banks have been saying no, but that doesn’t mean the game is over. We’re here to tell you that there are other ways to play besides begging the banks to fund your deals.

 

Put your future in your hands: Make the switch to OPM (Other People’s Money) funding and stop waiting on the bank.  When the deals start popping up (and they will,) you’ll be able to buy the properties you want when you want, and for what you want to pay. 

Instead of sitting on the bench, you can be actively working to build that dream life, even in times of uncertainty.

 

Questions on how to go about making this transition? Luckily for you, we’re hosting an Intro to OPM Webinar where we’ll be covering all the critical details of how to make this crucial switch for your investment business!

 

Get signed up >>>

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Remote Closings And You: How COVID-19 Has Redefined the Real Estate Closing Process

 

What We Know:

The financial side of real estate has been stalled on many fronts these past few months due to the economic lockdown.

 

Offices are closing, and would-be buyers are losing their jobs. Appraisers aren’t allowed into properties, title companies are limiting closings. There are also complications of safely converting everyone’s office jobs to work-from-home positions.  This influx of rapid-fire changes puts a strain on the mortgage process and adds stress to closing on properties.

 

But, things are improving. We are beginning to see some positive changes thanks to the introduction of remote and online closings.  

 

What Is Changing:

For starters, buyers and sellers are no longer required to physically drive across town at a prescribed hour that works for everyone and suit up with masks and gloves for a closing.

Closing from Home

Systems are now in place for closings to happen 100% from the comfort of home or office ( or really, anywhere you need to be.)  Remote closings are real and they’re happening, along with simple remote notarizations. These simple adaptations eliminate so many hurdles to the closing process and help speed things along, especially in these unique times.

 

Fidelity, one of the largest title companies in the industry, is all-in with the remote advancements and allowing clients to choose how they close.

 

What the Future Holds:

We could be heading for a time when remote appraisals are standard and virtual showings become the norm.  It’s not as far-fetched as it sounds. We’re inching closer to that reality by the day.

Remote Closings

Just imagine the mortgage process taking place in a week or two, and not months!

 

Of course, this is good news for investors selling SFR properties and/or refinancing.  Landlords owning commercial properties may see values drop. After all, more people are working from home without having to physically come into an office.

 

On the rate front, we’re seeing very stable numbers. However, we’re still staring at a wall when it comes to refinancing.

 

As states open up and lift restrictions, let’s hope people run out and get back to work and start spending like we are all used to.

 

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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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Some serious added curb appeal was only the beginning for this Colorado flip.

Better than As-Seen-on-TV

How’s this for a Fixer Upper? Come with us as we explore some impressive investor before-and-afters from right here in Colorado!
This impressive flipper was able to transform this dated, worn-out property in less than two months! From dump to gem, and from purchase to under contract in less than two months!

We know which kitchen we’d rather be cooking quarantine meals in…

Yes, even in this crazy COVID-lockdown world, homes are getting updated and sold in record time. Rates are extremely low, and smart investors who have figured out how to work around the banks are taking advantage.

New and improved backyard oasis.

From scary and dark, to light, bright and inviting entryway.

From dark and dank to spa-level luxury in the bathroom.

Love how the flippers are making neighborhoods better one house at a time.
Sign up for our newsletter to receive updates, and we’ll keep you posted once the property closes and our client takes his profits and moves on to the next deal!
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