Real Estate Miniseries

Here are three reasons why you should invest in real estate. And I'm here to tell you, it's not just reserved for those people with tons of money. I truly believe anybody can get into real estate investing with a little creativity and plan. Big reason, it creates generational wealth. If you are a parent like me and you want a legacy, you want to leave something to your children, real estate is definitely one of the best things you could get involved in.

Buy those properties, create passive income, and that can definitely be passed on to your children. And not only that, it's such a great example. And the best thing, when you own real estate, every year, you own a little bit more of it and you owe a little bit less. And the best part about that is someone else is paying that for you, your renter. And lastly, owning real estate is a little bit like having a savings account. You can always sell it. If you get into a pinch, you can do a cash out refinance and pull some of that money out. Lots of possibilities.

If you own 10 real estate properties, you can become financially free. Here's how you're going to get those properties. And I'll give you the biggest hint. It's not by going to the bank. First and foremost, the fastest and easiest way to quickly build a real estate portfolio is by working with private lenders. Reasons why? Private lenders don't require financials, no tax returns, none of that. So it's much easier, especially for the self-employed. Additionally, there's no restrictions on how many properties you can do.

So if you can afford to do 10 properties in one year, have at it. Where the real differences lie. Private lenders allow you to use borrowed funds. So that term you hear using other people's money, private lenders are a perfect way to put that into action. But really what I'm a huge fan of is the BRRR method. So that stands for buy, rehab, rent, refinance, and repeat. And let me tell you how that'll work. One of the biggest hurdles that most real estate investors run into that slows them down is a lack of capital, especially for that down payment.

When you're first starting out your typical payment on a prop down payment is 25%. Now, I don't know about you. I don't just have that sitting around. However, I'm a huge fan of using capital stacking, which is large amounts of business credit, all at 0% for up to two years. That is my favorite source for the down payment. And when you do the BRRR method, so you buy that property, use capital stacking for that down payment.

Lender covers 100% of that rehab. When you do that cash out refinance with that new appraised value, you're able to pull some of that equity and hard-earned money you've put in back out. And with that, you can pay off that capital stacking, get yourself in a much better position and keep doing this process over and over and over. Absolutely. You might not need to use capital stacking for your entire down payment. However, it's there if you need it. It's extremely cheap capital.

And more importantly, that's what's going to allow you to build and scale at a much faster business credit is designed, in my opinion, for real estate, because the more you use it, so rack it up, pay it down, pay it off quickly. The more increases you get an additional 0% off. And in perspective, I have some clients I've been working with for two and three years, they have upwards of 6,700,000 in business credit.

Think about how many down payments and homes that would enable you to get yourself out.

If you're new to the world of real estate investing and you're wondering if you have to have an LLC in order to purchase an investment property, I'm about to tell you why. And while typically banks won't put it in the name of your LLC, private and hard money lenders will. And this is why it's so important. So first off, the age of your LLC does not matter when it comes to getting a mortgage for your investment property.

I've had clients actually form their LLCs as they're applying for the loan, completely fine. But the key is to have that LLC. And here's why it's so important. Private lenders will put that in the name of your property, in the name of your LLC, which means it's then not going to reflect on your personal credit. You're not going to be showing that giant debt.

But even more importantly, when you put the property in the name of your LLC, you're placing a layer of protection between you and your renter. In this day and age, it's really important.

If you're a real estate investor or you're wanting to become a real estate investor and you want to know how do I find off-market properties, how do I find properties where the owner will finance it or where the current mortgage is assumable, I got you covered. So first thing you're going to do is go to InvestorLift.com. Go ahead and click the register button. It does not cost. And then you can set some parameters, including you're going to want to register because it gives you the ability to put in filters, one of which those filters are.

is owner finance. But here's where it gets awesome. It goes ahead and lists all the properties with those parameters. It even gives you nearby comps. And what I really like is it's going to show you what it's for sale for, what the ARV is, and then it breaks down what kind of rehab it's going to need. And this is just one of the examples of what it looks like. Seller financing, no banks. Obviously, I would do my diligence. I would see the property. But for those of you looking to get that competitive edge, looking for another way to find these properties, here you go.

Thank you.

Do not buy your next investment property through your local neighborhood bank until you hear me out first. It's a fact. Banks are not set up to help real estate investors succeed. When you buy your investment property through a bank, typically they're going to put it in your own personal name, which definitely causes some issues. One being, this is going to show up as a personal debt, so it makes it very hard to get future loans because you're carrying a much larger debt load.

More importantly, when you put it in your personal name, you're opening yourself up for someone to sue you directly instead of, if you put it in the name of your LLC, that puts a layer of protection between you and the property. Getting the loan through a private lender is much easier. We're not going to need years of tax returns. We're not going to need employment or income verification.

We're going to focus on what's truly important, which is what is that property going to make for you. The great part about private lenders that's different from a bank, you can actually use borrowed money for your down payment, opens up a whole new world.

This is for anyone that owns rental properties or wants to. I'm going to give you the secrets that the banks don't want you to know. I'm going to talk you through the process and show you just how easy it is when you work with private lenders. And here's the biggest secret. You can do this even if your LLC is brand new. The first step is very different from the bank. There's no going in and finding out what you're pre-approved for.

When you work with private lenders, the first step is going out and finding a property that fits your needs. When you're looking at properties, you're going to want to keep in mind the typical down payment for a rental property is anywhere from 10% to 30%. Two factors that determine that down payment are credit score and experience level. Once you've identified a property that you're interested in, made an offer, and gotten it under contract, that's when the fun begins.

Here's the biggest difference between private lenders and the bank. Go to apply with a bank, they're going to want tax returns, income verification. You're going to be bogged down with paperwork. However, when you're working with a private lender, you're going to fill out a very basic application, not going to provide any financials, and just provide a screenshot of your current credit score.

Typically, from there, you'll be presented with a term sheet within 24 to 48 hours. And if you're a newbie, we can help you understand exactly what that term sheet. Once you've signed that term sheet, you're going to be presented with a documents needs list. Here's the biggest difference. You're not going to need tax returns, none of that. It's going to be very basic.

We're going to need information on the property, what you're going to be doing. If you're going to be doing any rehab, we're going to want information on your LLC, when it was formed, and need those formation documents. And just like a bank, the private lender is going to do all the heavy lifting. So they're going to order the appraisal and any appropriate inspection.

And the best part, we can typically close in 14 days.

There's a great type of loan called a DSCR loan. It stands for debt service coverage ratio. Benefit of this type of loan is that it doesn't focus on your personal financials, no tax returns, no debt to income ratio, no employment verification, nothing. Instead, the focus is on what's important, which is what is that property going to cash flow and is that going to exceed the amount that you're paying out every month for your mortgage. Benefit of this type of loan is that it's much faster than your traditional bank loan. Typically can close in three to four weeks.

It's put in the name of your LLC, so it doesn't reflect on your personal credit and gives you that layer of protection between yourself and the rest. And yes, this type of loan does require a down payment, typically around 25%. However, benefit of working with a private lender, they do not care where that down payment comes from. So you can use borrowed funds for that down payment. For example, you can use a business line of credit. There's your down payment.

Why does a DSCR loan have a 20% to 25% down payment? Nearly every single time that I post videos explaining DSCR loans, I get flooded with comments of people saying, that's a horrible loan, you need a 25% down payment. But let me explain why it is a good loan and why that 25% down payment actually makes sense. So the theory behind a DSCR loan, it stands for debt service coverage ratio, is that they want to ensure that the rent that you're collecting each month is going to exceed the mortgage payment by a factor of 1.15, making sure you're making a profit of at least 15%.

And with interest rates the way they are these days, the only way that's going to make sense is if you do come to the table with 20 to 25% down, because that makes your loan amount low enough that your rent will cover it. So if you were to get a 90 or 100% loan right now, you would actually end up paying your own money at the end of every month just to have that property.

Your renter would no longer be making that mortgage payment for you. And while yes, that 25% can be a significant amount, the benefit of working with private lenders is that they do allow you to use borrowed funds for that down payment. One of my favorite programs is by utilizing capital stacking to bridge that gap.

The right timeline when you're buying your first investment property. I work with a lot of real estate investors from beginning to advanced, and the one piece that I see happening over and over again is not getting the timing right, not doing things in the right order. So I'm going to help you learn from their mistakes and give you the perfect timeline.

You're thinking about getting into real estate investing. So the very first thing you should do before even looking at properties is 30 days, keep this number in mind, 30 days before you even want to start looking at properties, I want you to apply for capital stacking. If you are wanting to invest in real estate without using your own money, apply for capital stacking.

Reason being, it doesn't hurt your credit. It's a soft pull only, but I want you to apply for the capital stacking so that you know how much you could qualify for to help you with that. Down payment, whether it's just some of it or covering the entire thing. Reason you want to apply for that first before looking at properties is that's going to help you determine what price range of properties you should be looking at.

Because if you think about it, you need 20, 25, even sometimes 30% down for that property. How are you going to know what to be looking at? You're not. I have clients looking at four and $500,000 homes, getting them under contract and then coming back and saying, All right, let's figure out how to get a down payment. And sometimes they don't qualify.

So it's a mixed up situation. So 30 days before, find out what you qualify on capital stacking. You do not need to pull that trigger. You just don't want to affect your credit. Then you start looking for the property. Get that property under contract. At that point, that is when you certainly need to pull that trigger on the capital stacking. Because it's going to take up to another 30 days for that loan to close on the home.

But also, in order for you to get the capital stacking and liquidate it and have it in your bank account for closing day on that home, it's going to need at least 30 days. So 30 days prior, apply for capital stacking. And then know that once you get that property under contract, you need at least 30 days to get the capital stacking and the liquidating done and to close on that loan on the house.

What's better, to use capital stacking as the down payment for a fix and flip project or to use capital stacking for the down payment for a rental? I get asked this question all the time and in the past four years I've helped thousands of real estate investors do both types of loans, but I'm going to show you what makes the most financial sense. So the beautiful part about capital stacking is that it does come at 0% interest for 9 to 15 months. The key to being really successful is making use of that 0% period.

And you have to keep in mind that yes, you do have to pay that money back even though it's business credit and it doesn't show up on your personal credit report. So in the case of a fix and flip project, you're actually using capital stacking the way it's meant to be used, which is using it, racking it up, paying it off, and reusing it over and over again.

So you use it for your down payment, you get that rehab done, you sell that project, you pay off the mortgage and that capital stacking, and then guess what, you can use it again for the next project. I've had some real estate investors do numerous projects in that timeframe of that 0% interest, and that's when it makes the most sense. When you're using capital stacking for a DSCR loan, when you're buying a rental, yes, it absolutely works, you can use it for that down payment, but the problem is that you don't have a real easy way to pay it back.

You don't have a quick exit because you're holding on to that rental, and yes, it can totally be done, and I help people do it, but you have to keep in mind that's going to greatly cut into your profits, because not only are you having to make that mortgage payment each month, you're also having to make that payment on the capital stacking. And one method would be, if you did do a DSCR loan, you can eventually do like a cash out refinance, take those proceeds and pay off that capital stacking.

Both methods work, and I'm not trying to discourage you from using capital stacking, but I just want you to be aware of the pros and cons of using it for each of those different methods. If you'd like to talk about your unique scenario and how to best utilize capital stacking, be sure to schedule a free call with my team.