Hard Money Blog: Invest, Revitalize, Create, Prosper

The 70% House Flipping Rule and Its Alternatives

April 9, 2021 by Kyle Sennott Leave a Comment

The 70% rule in real estate - does it still work?

If you are a fan of TV home flipping shows, you might be under impression that fixing-and-flipping homes is a glamourous job with guaranteed profits at the end. You stroll in, ponder the design, and voila! In a short time, the old shack is transferred into a fashionable abode making loads of money for you and thrilling potential buyers.

Things are much more complicated in the real world. A flair for design is a plus, but the first thing you need to be is a humble accountant. No amount of creativity will save your project if it’s missing fundamentals to make you money. The real estate investing industry is afloat in tools, formulas, and calculators to make it easy to evaluate the transactions. Let’s take a quick look at their ins and outs.

Direct hard money lenders vs traditional banks – top pros and cons analyzed.

March 22, 2021 by Kyle Sennott Leave a Comment

Real Estate investor Thinking About The Pros And Cons Of using hard money

For those new to hard money lending, using private funds for the first time might be intimidating. Direct hard money lenders work differently from traditional banks. However, few new borrowers understand these differences. Like everything else in life, hard money lending has its pros and cons. Hard money loans are not for everyone and not everyone would qualify for them. However, working with a direct hard money lender vs. a traditional bank could offer flexibility and leverage not available anywhere else. Think about hard money lenders as a narrow subset of mortgage companies that provide a unique type of financing to borrowers in very specific circumstances.

What Is Asset-Based Lending in Real Estate?

March 2, 2021 by Kyle Sennott Leave a Comment

Private lenders (alternatively referred to hard money lenders) are a narrow subset of mortgage companies that specialize in working with real estate investors. The financing that they offer is asset-based. As the name suggests, asset-based financing is financing that is secured against an asset or collateral. Asset-based financing has a long history that goes back to ancient times when almost anything of value could serve as collateral. In modern times, the most common assets for businesses to borrow against are accounts receivable financing, inventory financing, equipment financing, or real estate financing. Our focus is asset-based lending for real estate investors.

How to Work with Private Lenders Effectively

February 12, 2021 by Kyle Sennott Leave a Comment

Businessman Connects A Small Red Gear To A Large Gear Wheel Symbolism Of Establishing Business Processes And Communication Increase Efficiency And Productivity The Best Business Formula For Success — To effectively work with private lenders, follow these five steps to success.

Much of the advice on private money loans are focused on how to get qualified for them. While it’s certainly an essential topic, an equally important subject is how to ensure your success once you obtained that funding. So, how to work with private lenders to ensure your success? Let’s face it – your ultimate goal as an investor is to maximize your profits. Repaying your private money loan as quickly as possible is a necessary milestone in meeting such a goal. By moving through your rehab efficiently, you can save thousands of dollars. In contrast, every additional month your loan is outstanding will cost you a pretty penny in carrying costs such as interest payments, taxes, and insurance. If you fail to repay a loan within a term agreed (typically twelve months), you might also incur default fees and interest. All of them would take an additional chunk out of your profits.

DC Real Estate and Multiple Offers: How to Stay Rational and Avoid Risk

February 5, 2021 by Kyle Sennott Leave a Comment

Multiple Offers Washington Dc Real Estate — *Experienced real estate investors have the discipline to know that getting the right property at the right price is a process and is not a sudden stroke of luck.*

The real estate inventory is low in the DC area, and any real estate investment opportunity is bound to attract multiple investors’ attention. It’s not unusual for a distressed home to receive twenty or more offers. How do you keep your competitive nature in check and remain level-headed when faced with such intense competition? How do you resist that rush (or high) that real estate investors derive from being that winning offer? How do you make sure that the need for instant gratification does not cloud your judgment? The answer is in unbiased financial analysis, disciple, and perseverance.

Real Estate Investment Partnerships

January 29, 2021 by Kyle Sennott Leave a Comment

Private money lenders offer their borrowers incredible leverage. For you as a borrower, leverage means using the other party’s funds to pay for as many expenses of buying and rehabbing a home as possible. Still, all private lenders want their borrowers to invest at least some of their own money. That helps them manage their risk by ensuring that their borrower is financially vested in the transaction. For real estate investors, the most prevalent reason to create a real estate investment partnership is to pull together enough funds to satisfy their lender’s contribution requirement. However, many of them define their partnership in loose terms without realizing the pros and cons of each scenario.

Hard Money Blog: Invest, Revitalize, Create, Prosper

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