It’s Time to Change the Game.

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.

Investor mortgage report

Investor Mortgage Report 4.14.2020

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 info@investorrealestateloans.com.

What to Do When the Bank Says, “No.”

Don’t be controlled by banks. It’s time for you to take control!

That noise you just heard? That was the sound of conventional lenders across the country slamming the door and walking away from the lending on investment properties. For those of us who make our living through fix and flips, fix and holds, and other real estate investments, it’s not exactly a GREAT sound.

But if you listen carefully, you might also be able to hear the rumblings of coming change. Just because the banks are currently the bearers of bad news, doesn’t mean it’s time to give up. Take back control of your financial future by disrupting the chain and breaking the bank’s monopoly. And the good news?  It’s actually easier than it sounds.

How, you ask? Simple. Start funding your own deals with 100% OPM – Other People’s Money. Cash from your mom, your neighbors, your golfing buddy—really, this source of capital can come from anyone who has money and is looking to invest it. 

This easier-than-it-seems solution really can help you thrive now during a period of economic uncertainty, as well as far into the future. No matter the economy, you’ll never have to worry about being controlled by what the banks have to say. If they shut the door to funding on you, you’ll have a way to keep investing and continue turning a profit for you AND your lending partners. 

 

Want to see just how easy it can be to transition your current real estate investment business model? Join us for our next informative webinar session!

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

 

Establishing trust is KEY in this funding model. When you’re dealing with other people’s cash to fuel your investments, it’s critical to stay transparent and protect everyone’s best interests.

 

Want to know more? Sign up here for our next session. >>>>

The Lending Faucet Has Been Shut Off. What Happens Now?

Everyone knows that you kill a business by cutting off their credit/finance. Once the credit is cut off, we are all in trouble.

 

Or, ARE we?

 

Did you hear the lending markets just explode/implode in on the investor market?  What felt like overnight (within mere weeks,) the traditional funding faucet was virtually turned off. Lenders across the country are pumping the brakes on loans for investment properties due to COVID19-related closures, job losses, and resulting economic uncertainty.

 

What does this mean for folks who rely on that normally steady stream of capital for investment real estate funding? The existing and would-be landlords? The fix-and-flippers? The fix-and-holders? The short answer: Without credit or funding, investing in properties becomes problematic. Therefore, MAKING money becomes much tougher. 

 

Notice that we said ‘tougher,’ and not ‘impossible?’ There IS another way…

 

Now is the perfect opportunity to create your very own banking system.

 

“What does that even mean,” you may find yourself asking? It means finding PEOPLE, not banks, with money—money that they would be willing to invest. This could be your mom, your best friend, your neighbor, or anyone else who has some extra funds that they want to put to work for their future financial benefit.

 

Don’t allow the banks to socially distance you from your investment income! Learn how to keep your business running steady now and in the future by having a consistent stream of OPM- or Other People’s Money- funding. 

Join us for our next weekly Webinar, where we’ll be going over market updates and the basics of how to transition your lending stream from traditional lenders to OPM funds, all while keeping it legal, keeping it safe, and keeping it honest for you AND your funding partners!

 

Get signed up here >>>>

Buying a Duplex – What NOT To Do

Whether you’re getting ready to invest in your first rental units, or you’ve been renting for years, it’s always a good idea to learn from other people’s mistakes. In this video, Chandler David Smith tells us about the lessons he’s learned and what NOT to do as an investor. Check it out!

Ready to start investing? Need some guidance? Then contact our team. We’re ready to show you how to invest and invest right!

BRRRR Property Walk-Through

Interested in succeeding as a BRRRR investor? Then check out this video! Matt Faircloth from Bigger Pockets gives us a tour of a property he invested in, and talks about numbers, lessons, and tips. Check it out!

Ready to tackle the BRRRR method and invest in your first property? Our team is here to guide you through the process and help you reach your investment goals. Contact us today.

 

10 Strategies For Finding Real Estate Investment Deals

How do you find good deals? Well, that’s what this video from Bigger Pockets discusses. In this video, you’ll learn about the top 10 strategies for finding great real estate investment deals, even in a competitive market.

What are you waiting for? Now’s the time to find a great deal and start investing. Need help? No worries. Our team is here and ready to coach you through the process.

Thursday Tip: The 1 Percent Rule

Have you heard of the 1% Rule? Yes? No? Either way, check out this video from Matt McKeever about why you need to know about this real estate investment strategy.

 

5 Ways to Find Wholesale Leads and Deals

One of the best ways to make the most on your investments is to find wholesale deals. But, how do you do that? Well, here are 5 tips from REIClub.com. Check them out!

Ready to learn more? Visit our Investor Tools page, or contact us today!

Thursday Tips: Investment Property Walk-Through

How do you analyze an investment property before you invest in it? Well, check out this walk-through from Bigger Pockets. It offers excellent tips on evaluating a property in order to sell (or rent) it for top dollar.