Finally, you found the property you’ve been looking for and the owner is ready to sell, but you don’t have the cash on hand to buy it. That is when you probably came across both hard money lenders and private money lenders. Both can fund your investment property but each serves a different purpose and has unique risks. 

In this post, you’ll learn the differences, similarities, and everything you need to make the right choice to fund your project.

What is the Difference Between Hard and Private Money Lenders?

Hard money lenders are companies that loan money to real estate investors to acquire investment properties based on the potential gain from the buying price and the selling price.  

Private money lenders are companies or individuals that offer a loan based on their own criteria and it could be simply to help you get started in your career. Private money lenders can be a friend, a family member, or even someone who sees your project as a good investment vs. being a licensed company or organization.

What do Hard & Private Money Lenders Have in Common?

Both hard money lenders and private money lenders are similar in that there are no government restrictions in the USA (as of 2/10/2021). 

In addition to that they both have benefits including: [Read more…]

Are you ready to make some money in real estate without having to flip a house or be a landlord? Then learning how to wholesale real estate properties may be for you. It’s a tactic many investors take advantage of, and for a good reason.

Wholesaling real estate is an excellent way to make money without having to invest a ton of cash or flat out buy a property. But there are also risks.

But don’t worry; we’re not here to pull punches and keep any tips to ourselves. We’re here to share with you the ins and outs of getting started so that you can begin to grow your portfolio and your bank account.

What You Need to Get Started

Wholesale real estate can be tricky. The whole process takes a keen eye, understanding the process and the market, and some connections.

While it is low-risk compared to other forms of entering into real estate investing, not being prepared is a surefire way to end up with a property you didn’t expect to purchase. So, before we get into the process steps, we should cover the groundwork.

The first question to cross your mind is likely going to be whether or not you need a license. The short answer is no. While it’s certainly helpful, it is not necessary.

However, a license will give you access to the MLS that shows listings before reaching the public. Considering you are looking for properties listed below market value, that’s a powerful tool to have.

Regardless of whether you have a license, networking is also an essential tool. Your goal here is to establish connections with industry professionals whereas a Realtor would want to make these connections in addition to home buyers and sellers.

Lawyers, lenders, title companies, other agents, and even movers are sources from which you can gather information on homes going up for sale. They can also help point you in the direction of buyers who are just as essential to building connections.

But networking will only get you so far. You also need to develop a comprehensive understanding of the market. [Read more…]

If your property leads funnel has dried up, and advertising simply isn’t working, you may consider investing in a foreclosed property. If that sounds like you then you’ve likely come across the term REO foreclosures and heard that they are a great way to boost your investment portfolio. But that also leads to questions about the sustainability of REO foreclosures as a way to grow your lead funnel and as a stable business model. 

Are these as risky as a traditional foreclosure? Is there a difference, and should you take the chance of investing in one? We’re here to explain what these types of properties are so that you can make the call.

Below you will find questions and answers related to REO foreclosures to help you make a decision on if they are a good way for you to boost your lead funnel and scale your real estate investing business. 

What is an REO foreclosure?

REO means Real Estate Owned and the term REO Foreclosure refers to a piece of property that is being sold by a bank or lender. A property becomes listed as an REO when it fails to sell at a traditional foreclosure auction. The bank reclaims the property and lists it on the MLS or other conventional real estate listing sites. 

How do REO foreclosures work?

The length of a foreclosure process can vary greatly, and the home usually goes through many stages before it lists as an REO foreclosure. For an in-depth look at some of the foreclosure process stages, you should refer to our guide on the differences between short sale pre-foreclosure and foreclosure. 

After the property is taken back by the lender, the lender will try to sell the property at a public auction. If no offer is made during the auction or meets the lender’s needs, they will reclaim the property and list it as an REO. [Read more…]

You don’t necessarily need loads of upfront cash to have success in real estate investing. An effective strategy is far more critical. The BRRRR Method for real estate investing is a popular but mostly unknown strategy because it allows you to start small and work your way toward bigger and better goals. 

Many successful real estate investors begin with the BRRRR investing strategy and climb their way to the top. But that doesn’t mean they don’t still use it once they get there.

What is the BRRRR Method?

BRRRR is an acronym for Buy, Rehab, Rent, Refinance, Repeat. The BRRRR Method’s goal is to end with an increase in the value of a property so that you can return your initial investment and begin again while collecting cash from tenants.

An example of success with the BRRRR Method is the ability to refinance a rental for $130,000 when your total investment is just $100,000. You then use the refinancing money to cover investment costs while collecting rent monthly.

You then repeat to generate another property you can continuously collect rent from. Each time you repeat, your passive income and net worth rapidly increase.

How does the BRRRR strategy work?

The process begins with buying a property that needs work with a low listing price.  You’ll want to find a property that needs some updates but not a total overhaul. 

In most cases, your initial property investment will be funded by hard money through a short-term lender. No matter where the money comes from, you need to make sure that you have enough to cover the property’s cost and renovations.  [Read more…]

If you’re a beginner investor and are looking to save money on your initial investment, house hacking may be the way to go. As you can guess by the name, it is a tactic that seems too good to be true—but it’s a genuine practice. Here’s how you can use house hacking strategies to kickstart your real estate investment career.

What is house hacking?

House hacking is a real estate investment strategy where the investor rents out a portion of their primary residence so that rental payments cover the costs of the mortgage and expenses.

In most cases, the investor purchases a multi-family property and lives in one unit while renting out the others. That is why it can be highly desirable for many because even though you share a property with others, you still have the privacy of an entire unit. [Read more…]

Are you struggling with a property you want to flip, but the market isn’t quite right to fix and sell it? Or maybe you have an older building where the architect designed a “unique interior” and layout. Instead of struggling on how to fix it up, or which walls to knock out, go with a fourplex!

By definition, a fourplex is a property that contains four separate living spaces.  It can be a house, an apartment building or any type of structure as long as there are four unique quarters where people can live separately.

Fourplexes provide tenants with affordable and desirable living spaces, and landlords a creative way to make more money off of a single rental property.

They’re attractive to young couples and singles because these types of renters can live in a home with a yard for less money than buying their own houses, not to mention they can live in a house without roommates. But the benefits mostly lie with the real estate investor.

Flexibility is one of the key benefits of a fourplex for a real estate investor.  Specifically when it comes to leases and pricing.

You can list some units as short term and others as long term. The short term units are attractive for corporate housing, military and study abroad students. Long term leases are perfect for professionals, young couples and singles that aren’t ready to buy. Because it is four separate units, you don’t have to worry about renting the entire home to have money coming in.  You can have a steady cash flow from the long term rental agreements and large bursts of revenue from the short term leases.

If you are a real estate investor and do not have a large staff, fourplexes have another advantage for you.  Upkeep on a fourplex is less time consuming because there is less travel in between properties. You can also complete all inspections in one swoop instead of multiple days at multiple properties. Not to mention the peace of mind with not having to worry about one roof, HVAC system, plumbing, lawns, etc. instead of multiple buildings.

You can also get creative with pricing and make more money with a fourplex than you can when renting the entire home to a single tenant.

For example, the rental price for a single family home in your market could be $1,300 per month. The cost per single bedroom apartment could be $450 and a studio $300. By having the same house as a fourplex you now have the ability to charge $1,650 per month if you charge market rate for each.

If there is parking, you can also charge per space vs. including parking spots it if the building was a standard home rental.  By adding the parking spaces in as separate rentals, you could be earning $1,800 per month if you charged $75 per space when compared to the market rate of $1,300 for a single tenant home rental.

Now remember, not all units in the building will be as desirable. Not everyone will be happy walking up one or two flights of stairs. Basements don’t always have as many windows making them not as appealing for a renter. By knowing this you can get creative.

In the same market prices mention above, why not charge $300 for the basement, $400 for the second floor unit and $550 per month for the two more desirable rental units. [Read more…]