“My favorite holding period is forever.” -Warren Buffett

There are many ways to invest in real estate. You can build your portfolio by purchasing different types of properties: apartments, single-family homes, apartment complexes, commercial buildings, office spaces, raw land, tourist locations, and even foreign properties, to name a few.

As a strategy for investment, you have 3 primary ways to make money in Real Estate Investing:

• Use-change
• Cash-flow
• Appreciation.

When you buy a deferred maintenance house that can’t be financed conventionally and make the necessary repairs to bring the house up to FHA insurable condition, you have “used-changed” the property. Now it can be sold to an owner-occupant that can acquire long-term conventional financing. This, as you all know is the classic “Flip”.
However, most wealth building in investing Real Estate incorporates the other two profit centres: cash flow and appreciation. When you flip a house, you only take advantage of only one profit centre: “use change”. When you hold property you cash in on cash-flow and long-term appreciation. Here’s how.

Profit from Inflation

It is often said that landlords grow rich in their sleep because cash flow and equity increase over time. The average rate of inflation in the US for the past 50 years has been 4.1% annually. Therefore, if your rental income and the value of your investment property increase at this rate, your cash flow and equity will increase significantly over time. If there is a lien on the property you can still see a positive cash flow because inflation usually drives rental income up and loan payments are typically fixed.

Cash flow increases over time. Rental income goes up faster than costs because loan payments are typically fixed.

On the other hand, as equity increases over time, appreciation and loan payoff build equity.

Equity increases over time. Appreciation and loan payoff build equity.

In sum, inflation will yield profits as equity and rental income increases over time. Now think how much wealth you can build 10 years from now if you hold a few cherries as a rental; think how much wealth you can build 20 years from now… This is why Warren Buffett’s favourite holding period is forever.

The bottom line is: Flipping houses is a great source of steady cash flow for paying bills but now and then hold back a “cherry” as a rental property to add long-term wealth building to your Real Estate investing strategy.

If you are looking into investing in real estate, you are likely trying to get the best deals in the least amount of time and effort. While there are guidelines to make a smart buying decision, “many shots on goal” is a key component to consistently making good buys.

The more opportunities you have, the more likely you will find a great bargain. Professional wholesale real estate buyers make 3 or more offers per day, 5 days a week, and hope to make 3 good buys a month. How many offers per day are you making? Whatever the number, it will be directly proportional to the number of great buys you make each month.

How to Make Your Offers More Effective

Although quantity is king, there are several things to keep in mind to make your offers more effective:

• Asking price: should be reasonable and ideally below other comparable properties in the market. By the way, if you feel too confident about the amount you offered, you probably offered too much. Make sure your offer is “just enough” to be considered.
• Repairs: Estimating repair costs is necessary before submitting an offer. This will also come in handy if you need to apply for private money or conventional financing.
• Sellers: Having a motivated seller who is willing to work with you (if you need to ask for an extension to close the property, for example) is a valuable advantage.
• Liens: Take the time to search for any liens the property may have. You can find this in public records or directly with the seller. Any liens found can be a game changer for your financing options and your profit margin.

At the end of the day, the only bad offer is the one that is never made. “Many shots on goal” is the key component to sustainable success in real estate investing. You will be surprised how many goals you can score.

You have probably heard the old adage: “There are three things that matter in an investment property: location, location, location”. I can’t tell you how important this is for a healthy and manageable investment portfolio.

In this post, we are going to take a look at how location affects residential real estate investing.

You want to be buying houses in a very specific area, especially when you are buying, fixing and renting. As a hard money lender, I talk to real estate investors every day that are relatively new to the industry and are looking for a rental property loan. Sometimes they tell me about a house they are looking at in Orlando, or another one that they have in Tampa, and another one in Jacksonville… If this sounds like you, it’s time to re-evaluate your strategy. Here’s why…

The first rule about renting investment properties and building a nice portfolio is to look for houses in the same location. In my view, if you can’t stand in the center of where the houses are and, figuratively speaking, throw a rock and hit every house, you have the wrong plan. A rental house in Orlando, another one in Tampa, and another one in Jacksonville is a recipe for disaster.

Why should you buy rental houses in the same location?

There are 2 reasons to buy rental houses within close proximity:

• To know what you are buying – Buying properties within the same neighbourhood will help you understand the challenges and advantages of a specific investment property (appreciation, crime rate, etc).
• To create synergy between the properties – Houses within the same area are usually of the same kind. This can be beneficial in many cases. For example, you can hire a local handyman and he will know exactly how to fix maintenance issues in that kind of house. This is much more efficient than sending a handyman to a house in Orlando that was built in 1963 and another handyman to a house that was built in 2001 in Tampa, or Jacksonville.

In the following weeks, we will be focusing on the art of purchasing wholesale investment properties. We will be covering topics such as how to find wholesale investment opportunities, negotiating, contracting, and closing.

Today, we will start with the first step, which is a discussion about specifically what type of properties to look for.

Here are a few, of the most important property features to will help you find the best rental properties:

• Single Family Homes
• Detached
• Conforming-zoning
• Established subdivision
• Standard Construction
• Deferred Maintenance “Handyman Special”
• Solid, middle class and up neighbourhoods with good appreciation prospects.

It’s often said that it’s much easier to find something if you know exactly what you are looking for. The same is true when you are trying to find wholesale investment properties. There are 2 primary strategies for real estate investors: One is to buy, fix, and sell (“flip”), and the other is to buy, fix, and rent. Previously, we analyzed the profit potential for these two strategies. Some houses are much better suited for long-term rentals and some are better suited for short-term flips.

Generally speaking, a long-term hold property should offer excellent prospects for appreciation and be in the type of neighbourhood that will attract quality tenants. Many beginning investors look at the cash flow from very cheap, small houses in distressed neighbourhoods and believe this is the most important characteristic of a rental. The problem with this strategy is, that small, cheap houses in distressed neighbourhoods do not appreciate at the rate of larger homes in better neighbourhoods. It is also difficult to attract and keep quality tenants in these small, cheap houses. Therefore, if you are looking for wholesale investment properties to hold as rentals focus on solid 3/2, 4/2 middle-income homes in quality areas. I like to focus on what I term “upward-transitional areas”. Try to buy quality homes cheap in C+ neighbourhoods that are in an upward transition to “B” and eventually “A” neighbourhoods. This specific type of property for a long-term hold strategy has created many real estate millionaires.

If your plan is to buy, fix and sell then focus your search in areas where homes are selling quickly. It is fairly easy to determine what the average days on market is in any specific zip code. Access to the MLS database, either directly or through a Realtor friend can quickly give you the data you need to find these fast-sell neighborhoods. I would recommend working with middle-income and up houses. Small, cheap houses in distressed neighborhoods are very hard to sell.

There are many misconceptions in the marketplace about the meaning of the term “hard money loans”. In the real estate industry, funding from a hard money lender is so-called hard money lending because of the high points and interest rates. While the conventional mortgage loan from banks floats around 3%, a hard money loan can stand at around 12% APR.

Although the loan terms can be strict and the interest rates can be high, a hard money loan is usually worth the cost for the average real estate entrepreneur needing a quick source of cash to fund their deals. While conventional loans can take weeks, if not months, to close a loan, hard money lenders only need 7 days or less. Income and employment verifications, credit checks, background checks and all the qualification parameters that are present in conventional loan processing, are not required for a hard money loan, which makes the process not only faster but easier for the investor as well.

As a way of example, let’s say you have $150,000 to invest and you want to buy a single-family detached home for $130,000 that needs $20,000 worth of rehab. You would have just enough cash to do the deal, but you will not have enough cash for other deals until you have accumulated enough capital. On the other hand, if you qualify for a loan with BridgeWell, you would only need to fund as little as 10% of the total project cost, which includes purchase price, closing costs and rehab costs. You could then use the other portion of your investment capital to fund other deals and multiply your profits.

Therefore, hard money loans allow real estate investors to quickly fund their deals, do more business and boost their profits. If you would like to know more about our programs click here or submit a funding application.

In the real estate financing industry, private money refers to the funds an individual or organization invests with a real estate entrepreneur in exchange for a return on the investment. While a private money loan can take place when friends and family lend you money for your start-up business, it most commonly originates from a financial institution like BridgeWell Capital. BridgeWell Capital uses the money of private investors to service loans to real estate entrepreneurs. In this case, the financial institution receives a promissory note —a mortgage on the property to secure the investment— and collects an interest on the loan. The real estate investor can make interest-only or amortized monthly payments over 5 years with unlimited options to renew —whichever works best for the deal.

You may be wondering why a private money loan from Bridgewell Capital makes sense for your business. The primary benefit of private money is that it allows you to do more deals. Many novice real estate investors struggle with other sources of money such as conventional mortgages and lines of credit. They may close a few deals but they eventually realize how easy it would be if they had used private money in the first place.

For experienced investors, private money is useful to close larger deals. A solid real estate investing experience, a highly appraised property as collateral along with a high estimated profit margin are important factors for BridgeWell Capital to fund larger deals.

In today’s real estate market, private money is key. There has never been a better time and a better way to boost your investments than with private money. It doesn’t matter what strategy you use for your investments; whether you want to buy, fix and sell or buy, fix and rent single-family houses, using a private money loan from BridgeWell is a huge investment opportunity to propel your investing to the next level.

Are you a first-time investor looking for a hard money lender?

Entering the fix and flip space as a first-time investor can be tricky. Many hard money lenders require previous experience. This can be very frustrating when you’re starting from square one. Additionally, the experience requirement is often limited to recent experience. Investors who have flipped or owned rental properties in the past are excluded from using this experience to qualify if it was not recent. Both first-time investors and investors with long-past experience suffer from a lack of financing options.

Enter BridgeWell Capital!

We are a fully licensed and insured mortgage bank with financing solutions for every type of investor. BridgeWell has been in business for over 14 years and is the best hard money lender for first-time investors.

10 Reasons Why BridgeWell Capital is the Best Hard Money Lender for First-Time Investors

(1) Track record.

BridgeWell Capital has been in business since 2008 and has a proven track record of success. Conversely, many of our competitors have opened recently as hard money lending has increased in popularity.

(2) Experience in the Real Estate Industry.

The team of professionals working at BridgeWell Capital is well-versed in the fix-and-flip industry and has a combined 50 years of experience in real estate. In contrast, other hard money lenders have experience in the ‘fintech’ industry but little to no experience in the business of flipping.

Side note: Fintech means financial technology and is used to describe new tech that seeks to improve and automate the delivery and use of financial services. It is used in this context to refer to apps and websites that automate loan origination but do not provide guidance in the real estate industry.

(3) Personalized Service.

BridgeWell Capital is perfectly designed to guide first-time investors through their first deal. Every customer has an assigned Account Executive who works closely with Processing and Closing to get a deal done. When you call BridgeWell Capital you are never routed to an answering service or call center.

(4) Coaching.

At BridgeWell Capital, we provide the highest level of coaching and attention to first-time investors. Our staff is well-versed in a range of topics including wholesaling, damaged credit and how to improve it, best practices for finding a general contractor and ways to maximize your potential profitability. Advice on these topics and many others are available to first-time investors who reach out to our team of experienced professionals.

(5) Cash to Get Started.

BridgeWell Capital is the best hard money lender for first-time investors because we provide a portion of your rehab budget upfront! Almost all other hard money lenders expect you to get started on your rehab with cash out-of-pocket. Once a portion of the work is complete, then they will reimburse you. This method is tough to execute. Often a large portion of your liquid cash will be used for the down payment on the purchase of the property and associated closing costs and escrows. At BridgeWell Capital, we will provide you with 20% of your total rehab budget to get started on your project.

(6) Rehab Budget Review.

As a first-time investor, you want to make sure you have all the bases covered. How do you know if you have enough money budgeted for your project? BridgeWell Capital has a Repair Credit Line (RCL) specialist to help with this conundrum. First, we order a building inspection. Then, we review the results of the building inspection against your provided rehab budget. If the Repair Credit Line (RCL) specialist notices a missing item, we will request that you alter your budget to cover it.

For example, the building inspection identifies that the HVAC is past its useful life. The RCL specialist reviews the provided Repair Credit Line budget and does not see any money budgeted for a new HVAC. The RCL specialist will then request that you increase your budget to cover the cost of a new HVAC. Without this review, it’s possible the HVAC would not have been budgeted or replaced. When you try to sell the property, the end-user will certainly require a new HVAC to comply with conventional lending standards. This is a costly mistake and could have been easily avoided with our expert review and guidance.

(7) Speed of Closing.

With rents continuing to climb and interest rates remaining low — but trending upward — first-time investors will want to strike while the iron is hot. BridgeWell Capital’s bridge loans can close in less than 30 days and often in as little as 15 days. Speed is important, especially in a rising interest rate environment. You don’t want to miss out on the opportunity to get a great deal simply because your lender cannot close in a timely fashion. At BridgeWell Capital, we always put the needs of our investors first and can make accommodations to speed along closing.

(8) Direct Lender.

BridgeWell Capital is a direct lender. We deploy our in-house, private capital. Almost all other hard money lenders originate loans and then sell them soon after. We keep our bridge loans in our portfolio. The best hard money lender for first-time investors is one who will be available even after the loan has closed. BridgeWell Capital is available to answer all questions post-closing, during the rehab portion of your loan and through the successful sale of your property.

(9) Assistance Refinancing.

Let’s say you set out to fix and flip but you change your mind. You have decided to hold the asset as a rental – now what? BridgeWell Capital can help you with that! We have a refinance program available for properties that have been fully rehabbed and are now rental-ready.

(10) Win-win transactions.

The final and most important reason BridgeWell Capital is the best hard money lender for first-time investors is our standard of ethics. We operate with the highest calibre of fair dealings and will only pursue a transaction if it is a ‘win-win’ for all parties. Our team of experienced professionals reviews every deal for ‘Benefit to the Borrower’. Even if a loan looks good from our perspective, if we cannot determine any monetary benefit to the investor, we will not continue with the loan. It’s important to know the lender you choose to partner with has your best interest at heart.

So there you have it – 10 Reasons Why BridgeWell Capital is the Best Hard Money Lender for First-Time Investors! We’d love to hear your thoughts or speak with you about your specific situation. Please reach out to us at 866-667-7800!