Don’t Just Survive. Thrive.

With the U.S. reeling from COVID-19, and the economy taking a hit, a lot of investors are wondering, “What should I do?”

Our suggestion?

Don’t just survive. THRIVE!

You heard us. This isn’t a time to sit back and wait to see what happens. It’s time to take advantage of the market and BOOST your cash flow.

That’s right: BOOST.

How?

Here are a handful of strategies to consider:

  • Lower your rates: Rates are at an all-time low. If you wait until the market rebounds, you might miss out on those rates and get locked into much higher, more expensive rates.
  • Improve your return on credit (ROC): Wherever you are with your financing, it’s always worth a checkup to see if you can get a Return on Credit increase.
  • Skip a payment or two: With rising job uncertainty, some of your tenants might have a harder time covering their rent. Put yourself in the best financial situation possible. Give them a couple months of no payments. And once they start paying rent again, consider lowering their payments. If they’re safe, you’re safe.
  • Get out of private loans. One simple point can increase your cash flow. For example, a $300K loan could mean hundreds of dollars in your pocket.
  • Look at interest-only loans.
  • Lower your term and rate.

Don’t wait until the markets rebound. You might miss out on months or even years of lower payments.

NOW is the time to act!

Let’s get the process moving TODAY.

increase your cash flow, and rapidly build your equity

Now Is the Time to Act

The world is a little crazy right now.

But that craziness has placed real estate investors in a unique and POWERFUL position.

With time on our hands and the market in constant fluctuation, now this is the PERFECT time to boost your cash flow.

That’s right: BOOST.

How?

A few strategies:

  • Lower your rates: Rates are at an all-time low. If you wait until the market rebounds, you might miss out on those rates and get locked into much higher, more expensive rates.
  • Improve your return on credit (ROC): Wherever you are with your financing, it’s always worth a checkup to see if you can get a Return on Credit increase.
  • Skip a payment or two: With rising job uncertainty, some of your tenants might have a harder time covering their rent. Put yourself in the best financial situation possible. Give them a couple months of no payments. And once they start paying rent again, consider lowering their payments. If they’re safe, you’re safe.
  • Get out of private loans. One simple point can increase your cash flow. For example, a $300K loan could mean hundreds of dollars in your pocket.
  • Look at interest-only loans.
  • Lower your term and rate.

Don’t wait until the markets rebound. You might miss months or even years of lower payments.

NOW is the time to act!

Let’s get the process moving TODAY.

Current State of Real Estate Financing: March 16, 2020

The information below is to simply inform you and help you make educated decisions about your investments. It is NOT to instill fear or anxiety. We’ve had more than enough of that lately.

What We Know

We have spoken to banks, lenders, title companies, and many others in the industry. This is what they’re saying:

Everything is going so fast we are just taking it day by day and week by week.

Banks:
Currently, banks are mostly concerned about small businesses (i.e. restaurants and bars) getting closed for months. Small businesses ARE their business. Even though the Fed dropped their rates to zero, this will not help businesses with closed doors. How do these businesses cover rent and deal with food rotting in their fridges? How will the hundreds of thousands of workers pay their rent? Banks are looking for the government to announce plans to help these small businesses with payments and inventory.

From an investor standpoint, if small businesses close, unemployment will rise. And with unemployment comes the inability to pay rent. If you own rental properties, that will impact you and your rental loans.

We also believe banks will be a little tighter on lending over the next couple months. They will push more of the government backed programs and mortgage loans they sell off to FNMA or Freddie Mac.

Traditional conventional/conforming lenders.

They are overwhelmed with refinances. Last week, they had to raise rates to slow down volume.

When the Fed lowered their rate to zero it made little impact on these types of loans. Really, these lenders face two constraints:

  1. Too many loans for their resources.
  2. Mortgage Backed Security investors pulling away in these uneasy times and no longer purchasing these loans off their lines.

In other words, they have tons of incoming loans and no place to sell them. With the government buying mortgage backed securities over the weekend, it should free up some capacity.

Bottom line: These lenders are in business and will keep lending. Expect longer closing times and some pickier underwriting.

Private lenders and Non QM lenders.

We ARE all still open for business, but we have concerns on what is happening in the rental markets.

We also understand this is a time to look for opportunities. However, with banks slowing down, there will be more deals falling into this financing bucket. That means there will be a capacity issue, as well. Our focus will be on good, STRONG investors (with proven track records) and strong deals. The so-so deals (tight on potential profits to the investor) will be scrutinized closely and carefully.

Now, if homes sales slow down, then money will not be turning as fast to put back out. That means lenders will have to tighten lending to see how sales impact investors.

Real Estate Closings:
A key part to all transactions is title insurance. Title companies are reliant on their counties to stay open to get updated recorded documents and releases. If counties start to shutdown, we may not have title insurance to close deals.

What We DON’T Know

To be honest, a lot of things. The future is fuzzy as the world faces changes every day. We are CONFIDENT, however, that things will be OKAY and this is a golden opportunity for investors to take advantage of their finances and secure their futures.

How Investors Are Reacting

  • “Great rates!”
  • “Turbulent times. I should wait and see what happens.”

What YOU Can Do

  • Stay calm. Stay informed. Keep an eye on the markets where you invest. Take time to chat with realtors, title companies, and other industry professionals to stay in-the-know.
  • Evaluate all deals with a closer eye. Make sure they’re strong before you invest your money.
  • Be active AND proactive. Don’t sit back and wait to see what happens. Take the bull by the horn and take actions now. Think beyond today and invest in your future.
  • Check in with your tenants. How are they doing? How will their status impact you?
  • Maintain/improve your credit score.
  • If you have a bank loan, check in with your banks.
  • Find ways to bring in more money while you can. Interest rates are at an all-time low, and the lines to take advantage of them are increasing. Hop in line now so you save yourself A LOT of money in the future.

Money helps drive the real estate investment engine, and we all need to stay informed on where it’s flowing. Those who are well capitalized and looking to benefit from this market will need financing. And there are still many options available.

What are you experiencing?

Want to chat more? Contact us with your email address, and we’ll keep you up to date as the real estate investor market changes.

Feel free to send us questions, comments, and feedback! We’re here for you during this turbulent time.

Motivational Monday – Dreams

Today is a day about vision and dreams. What are yours? Where do you see yourself in three months? Three years? Three decades? If you set your mind to it and, more importantly, take your dreams seriously, then you can achieve just about anything. That includes your investment goals.

Ready to reach for your dreams? We can help! Contact us today to create a 2-year plan.

Investing Rules You Must Know

Every investor should know 3 rules of thumb:

The 2%, 50%, and 70% Rules.

If you don’t know what these are, check out this video from Bigger Pockets.

Ready to talk about your deals and how you can fund them with our 2-Step Loan Process? Then contact us today!

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