Learn To Be A Fix & Flip Investor

Monday, September 12, 2016

How to Fix & Flip Homes - 8 Things You Must Do To Be A Successful Home Flipper

1. Calculate your profit before you purchase the home.

The old saying is “you make your profit when you purchase the home not when you sell it”. This means calculating a profit and lost analysis on the Fix & Flip project before you purchase. Determine the profit before you purchase – work backwards. Don’t do a project unless there is a clear profit potential. Calculate your profit/Loss. Sales price less costs is your profit.

1. Costs for Fix & Flip

Acquisition
Purchase Price

Back Taxes and other liens

HOA Fees

Keys

Bid or Real Estate Fees

Closing Costs

Repairs

Contractor or do it yourself

Appliances + much more

Holding

Cost of capital to hold

Payments on hard money loan

Utilities
Insurance

Maintenance

Selling

Real Estate Commissions

Staging

Title closing costs

Marketing Plans

Administration

Bookkeeping accounting

Other non-related expenses

2. Have a good team of Contractors/others to do the work.

Suppliers

Real Estate Agent (hopefully it will be you)

Hard Money Lenders (give me a call)

Insurance agents

3. Get educated.

Don’t start buying homes without knowing the process. The best way to get started is to get your Real Estate license. Yes, it’s work, but it will give you the knowledge you need to understand how homes are transferred and the laws associated with real estate. Also, you will have access to the multiple listing service, which is invaluable for your research. Plus you can avoid the partial cost of the seller commission since you will be the listing agent. Every successful flipper I’ve ever meet had their real estate license.

4. Be patient.

There used to be a lot of homes being sold on the court room steps, sometimes a 1,000 homes per day. Today there are a lot less homes to purchase. You need to look at other ways of purchasing and finding deals. It’s going to take time to find, fix and sell. You can do it, but it’s going to take time. In the real estate investment world, timing is everything.

5. Have Money.

Don’t believe those people on the radio that say you can buy homes for no cash down. It’s not true.

You are going to have to have cash, skin in the game to purchase the home. Private hard money will require a down payment of 20-30% of the purchase price. And it’s not going to be cheap when you start. Rates vary from 9-18%. Don’t forget to calculate the cost of Hard Money in your profit and loss in item 1 above. Some hard money lenders market their loans as having the potential to fund an investment at 100% LTC (Loan-To-Cost), meaning a borrower won’t have to put a dime into the project. Although there are some scenarios where this is true, it’s very rare. There are some lenders that will participate in the deal. These lenders will fund the deal and share in the profit when the deal is completed. However, all of the participating lenders put a great deal of their decision on working with you on your response to #3 above and still require 10% of your money in the deal.

6. Don’t buy something you can’t fix or ever sell.

There are a lot of deals out there and they are deals for a reason. Some are in a situation, so bad, no matter how much money and work you put into the home, you will never sell it. For example a home built on top a land fill, or next to a dump, or sewage treatment facility, or the final approach to an major airport. You are not going to be able to fix these problems.

7. Buy your project through your LLC.

There is a lot of tax and liability reasons to do this. Plus, private lenders prefer to lend to LLCs.

8. It’s going to be work.

Don’t believe what you see on those flipping shows. You will have to work at it and it will take time. You need to visit the property and make sure the work is progressing correctly. After the home is completed and on the market, you will need to walk the property daily. So where do you start? I suggest that you start with #3 Get Educated. However, don’t go and pay for those weekend training seminars that cost 1,000s of dollars. Start at your local Real Estate School and get your State License.

About ME.

Hi, my name is Dennis Love.

I’m a business owner like you with over 40 years of business experience helping business owners around the world, including 7-figure businesses, small businesses and startup businesses that now make millions of dollars per year.

But the question is why do I do this? Personally, I had a very special person do something for me in the past to help me in my life. That person help me to grow to be the best that I could possibly be. This person sacrificed everything to help me to the point that in their efforts they died for me. It’s hard to understand this amount of sacrifice. It’s hard to swallow, but I learned from sacrifice of this special person that living is not taking but that in giving to others is when you really achieve true purpose and happiness. That’s why I do this. I want to be of service to you so you can achieve the dreams, success and happiness that you long for in your business.

Servicing others is the true wealth and the path for happiness. When you are successful, I’m successful. So with that let me tell you about my recent struggles.

I have personally helped business owners who were on the verge of going out of business to making a profit in as little as a few weeks.

But you want to know something interesting? Just a few years ago my wife and I were homeless and living in the van and sleeping in the office. That’s true! After 30 years my business was failing and I was laying off 100’s of employees. I was losing $250,000 per month and was going down in flaming colors. The only cash I had remaining was the credit line on my credit card, and after I maxed this out I had nothing but the van and luckily a wife who still had faith in me. Creditors were calling; I was being sued and hauled into court to stand before the judge subject to debtor exams. I had judgments filed against me, and creditors coming to the office and seizing assets. I tried everything but nothing worked. I just kept going losing money, more money and more money --- till it was all gone. I lost my business, cars, airplane, and even the home I was living in.

Everything gone!

No matter how hard I tried flipping homes, even though I worked 14 hours per day, nothing was working. I was so stressed that I ground down my teeth down and cracked every tooth. I had to find another way of making money flipping homes that would not cost me 1000’s of dollars. I could no longer spend thousands of dollars which I no longer had, on the old school approach that that cost 1000’s had returned nothing.

Finally late one night I found myself sitting on the edge of the bed with a gun in my hand and the memories’ of the business past. Than I had an awakening.

I heard a voice that said “what you think and feel is not reality; flipping homes is not brain surgery; it really is easy; you can do it.”

How hard can it be!

You just need to get educated and find out how other companies are making money flipping homes.

So after many failures I figured it out. I wrote this basic guide to help you. Servicing others is the true wealth and the path for happiness. When you are successful, I’m successful.

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 40 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 38 years.

Dennis Love, DennisLove.com are spoke persons or trademarks of Lever 4 Funding LLC an Arizona Limited Liability Company. This is for educational purposes and you should contact competent individuals such as Attorneys, CPA, Real Estate Brokers for expert advice. Information presented is not considered accurate and complete. To the extent this message includes any tax or legal

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Friday, September 9, 2016

California Private Money Construction Loans

California private money financing can be used for a variety of business purpose such as new construction or remodeling/updating your current commercial property. So let’s go over a few important details when it comes to using private financing for construction loans.

California private money construction loans are generally the way to go when your new business venture is one of construction or remodeling. It is the way to go because, as anyone in the commercial real estate business will tell you traditional financing avenues are less likely to approve loans for construction purpose. This somewhat reason change in lending doesn’t mean that California private money construction loans are instantly approved but rather that non-bank lenders are willing to fund these kinds of loans if they meet the necessary requirements.

Typically, these requirements allow non-bank lenders to feel more confident in their assumed risk. Therefore, when dealing with these lenders, it is important to keep in mind several key factors that have the ability to make or break your new construction or remodeling funding. One key factor, in particular, that you should make note is your desired location for your project or if you are remodeling an existing commercial property make note of the actual benefit of the upgrades to your business. Remember, your lender has to be comfortable with what you are using, in essence, their money for.

Another important key factor here is the overall process of the construction i.e. the actual draw process of your builder, if applicable to your situation. In other words, if your lender is insisting that the builder is paid via the title company—you need to understand how that process works. You also need to understand California state lien laws. Similarly, it is important to know where your lender stands in regard to the lot cost/lien when dealing with new construction.

Other Things to Consider

Unsurprisingly, other things you should be considering are your potential lender’s down payment requirements. As you are more likely already aware of, there are state regulations that affect your lender’s requirements, rates and fees. But, with that being said, there is a wealth of non-bank lenders, especially in California. Consequently, as long as non-bank lenders abide by the set state regulations, there is still some wiggle room i.e. lenders rates can still vary as long as they do not exceed a certain percent amount. So be clear on what you need as well as how much of a deposit you are able to come up with and do not forget to do your research so you are clear on general terms/fees.

New Construction Dreams come true

Ultimately, if you are prepared and keep in mind the above-mentioned important key factors, getting approved for non-bank funded construction loan should not be extremely difficult. Lastly, if your project calls for more than one construction loan as in the case of real estate development projects do not be discouraged many non-bank lenders are willing to work with you and allow you to have more than one active loan at a time.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Thursday, September 8, 2016

The Benefits of California Hard Money Loans

Considering a California hard money loan for your next commercial project or business plan? If that’s where your financing search is headed then it’s important to know the pros and cons.

By know you know California hard money loans are some of the most readily available hard money financing options, which is great for shopping around for the best rates and terms. But, in general, you may be wondering what exactly the benefits or rather advantages of California hard money loans are? Moreover, you may also want to know exactly what the disadvantages are of these particular kinds of loans. Well, the good news is the benefits outweigh the disadvantages by far.
For instance, starting out with the benefits, you will find out early on that these particular loans are approved and funded quickly, which is often the main reason people choose to use hard money in the first place. The next benefit you will find is that hard money financing options have fewer requirements. This means that unlike traditional financing options or bank lending you will not have to deal with an exorbitant amount of red tape. Consequently, common red flags such as bad credit, a previous foreclosure or bankruptcies are less likely to harm your chances of getting approved.
Another major benefit to hard money is the ability to get a project funded that you were unable to get funded or rather financed anywhere else. One common example is a fix and flip project. Often, banks are not interested in short-term lending. This is not to say that banks do not offer short-term options but rather that banks are in the business of making money and the easiest way to do that is to approve long-term loans more often. Furthermore, banks look at these kinds of projects such as a fix and flip as high-risk which only make getting financing harder.

The Pitfalls of Hard Money

So now that we’ve covered the major benefits of all things hard money, let’s talk about those pesky pitfalls and disadvantages. The top disadvantage when dealing with hard money financing is of course that higher than average interest rate. But, in reality, just as banks need to make a profit and are concerned about high-risk borrowers, non-bank lenders need to see some return on their investment hence the higher rates. Disadvantage number 2 is the fact that hard money financing is only available for short-term use. This means if you are looking for financing for a project that others have deemed high-risk for more than 1-5 years you may have to look elsewhere.

Commercial Hard Money

Lastly, hard money loans require either a minimum amount of equity i.e. at least 25% or a significant down payment. In the world of Commercial hard money, that minimum amount becomes 40% and the down payment is much larger. This increase is ultimately due to the fact that if there is a default, selling the commercial property is much harder to do and often requires a discounted sale price in order to recoup what the non-bank lender lost.

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.
Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Wednesday, September 7, 2016

California Private Hard Money Lender Requirements and Regulations

When dealing with a California private hard money lender there are several things you need to know to ensure that you are not falling victim to predatory lending. Moreover, let’s go over a few tips so you are not just borrowing blindly.

As you are probably already aware, hard money lenders, in essence, are still private money lenders. This means that your potential California private hard money lender is a non-bank lender. Historically, non-bank lenders have been able to lend money with limited regulations. Originally, this flexibility with California private hard money lender requirements made sense as the government shouldn’t be able to tell your father that he cannot lend you some cash for your start-up.

But, now financial reforms which were absolutely necessary after the real estate collapse means that there are some requirements when it comes to non-bank lending. For instance, the issue of mortgage licensing was not applicable to non-banker lenders i.e. individuals, companies and so on. Moreover, due to the almost overwhelming number of non-bank lenders in California, these new requirements have a lot of weight.

So what exactly do new regulations and requirements for potential borrowers and you? Well, for starters, there is now a fixed interest rate (the Usury law ensure that you will not be charge excessively high rates) that applies to these particular types of loans. In California, that “usury rate” is a maximum of ten percent per year. In addition to making sure that you aren’t financially drowning due to a commercial purchase or business purpose loan, etc., as previously mentioned, the issue of mortgage licensing now affects what type of property you can use hard money financing for. You also now need more documentation in order to properly secure your hard money loan than you once did.

The Real Deal with Licensing

The real deal with mortgage licensing (Real Estate Broker License) is it may or may not apply to your particular business venture. In other words, depending on the property type your lender may need to be licensed or they may not. This means if your next business venture is multi-family residential property your lender will most likely need to be licensed( depending on the particular state your potential property is located in also factors in as laws and requirements vary per state). Furthermore, it is important to note that what truly determines whether or not a broker license is required is actually your intended use of the financing.

Your Win-win Solution

Ultimately, it pays to do your research and figure out what your state requirements are. Furthermore, if your business venture ends up being a cross-state transaction you should be aware of the fact that both states regulations and requirements are applicable. With that being said, if you are looking for a non-bank lender, then make sure that you ask around i.e. get references, especially if you are not sure on whether or not you needed a licensed non-bank lender. You can also find reputable lenders by attending real estate events in your area or by networking with other real estate investors.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Tuesday, September 6, 2016

California Private Money – Providing a Helping Hand

If you are in the market for some prime California commercial real estate or land, it can be hard to properly manage your expectations. The good news is you may not have to compromise on what you need if you consider your California Private Money options thoroughly.

First thing’s first, private money is the best option for you or your business venture when you are looking for non- institutional financing i.e. when you are looking for loan money that comes from an individual or a company even. Based on that definition, it is also important to note that California private money is not necessarily as their hard money or anyone else’s for that matter.

Though both California private money and hard money are both asset-based financing, the true different is that hard money still comes from a licensed lending source whereas private money can come from a non-licensed source such as friend or family member or business partner. Furthermore, when dealing with private money, there is often more flexibility overall i.e. fewer regulations. Due to this flexible, you have more room to negotiate your loan terms (limits, loan duration, interest rates, etc.).

So what does this all mean? It means that private is usually more affordable but in reality, hard money is typically easier to find, especially in California. With that being said, you feel a little more comfortable with the term private money. Moreover, you should be clear on the difference between private and hard money in California. So without further ado, let’s go the various types of private money loans that are available to you and your business.

Types of Private Loans

There are several different types of private money loans you should consider. Clearly, depending on your business plan one particular kind of private loan will stand out amongst the rest or rather will be the better option in the long run. Since private money, in essence, can be acquired from practically anyone who has the spare change it doesn’t seem too far-fetched that you can get private money for basically anything i.e. real estate purchases, land new construction, commercial and more.

Advice on Who to Ask

Generally, you can ask a handful of people for a private money loan. In fact, who you can ask to help you finance your next commercial venture is so broad there ate categories—primary, secondary and third circles. The primary circle for your private money options is, as briefly mentioned, your co-workers, family members, neighbors and friends. On the other hand, your secondary circle is basically comprised of associates of your primary circle members, if that make sense. In essence, your secondary circle people are a result of proper networking. Lastly, you have your third circle potential private money lenders include strangers, people you’ve been able to connect with through advertising and accredited investors. Ultimately, regardless of where you decide to pool your financing from, it is important to note that you can raise capital or rather find investors in any of one these third circles so you are not limited.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Monday, September 5, 2016

Do California hard money lenders need Twitter or Instagram?

Social media reigns supreme over everything in this day and age. If you were to go outside right now most likely you would see at least 50 people with their heads craning over a smartphone or tablet. Most of the time they are endlessly switching through various applications and websites. Why not have your clients look at a local California hard money lender’s site or account?

In the real estate industry being ahead of the curve technologically could help you gain a lot of clientele. A simple tweet about the current statistics of the real estate market is greatly appreciated by the general public. But how can this help the local California hard money lender?

Yes, it can be advantageous to your business if you want to make yourself be known in the industry. A simple Twitter account is simple and easy to make and maintain. Since people have busy lifestyles to maintain and they do not have time to read a brochure or a well thought out blog post about the differences between commercial loan and a balloon loan is. A quick 140 characters on what is popular in the market or what type of homes are gaining a lot of attention are really good at getting more followers.

Now even Twitter and Instagram have started catering toward business focused accounts. You can now add your personal information and websites so your followers can go directly to your business profile. It also allows you to have your own Twitter apart from your business. This allows you to still have your personal life without conflicting with your real estate business. As we have previously stated before you need to make sure that you have a fairly clear digital footprint. Separating the two will give you the option to say and do what you want when you want.

What should you don't post as a California hard money lender?

When you have a specialty account to have to focus on what makes you, as a California hard money lender, different from other people. You want to make sure that your personality shines through the blue screens of your potential clients. That being said you do not want to say or retweet certain things that may seem controversial to a potential homebuyer. For example, you may follow a person that has dissenting views of immigrants; it may not be a good idea to reblog a lot of tweets from them.

If you favor Instagram over Twitter, make sure that you check and double check all of the pictures that you are thinking about posting. You do not want to accidentally post a picture of you in a bathing suit with a caption about how the market is making a roaring comeback. No one will take your business seriously.

How can you make money as a California hard money lender on social media?

Easy, you can have advertisements posted throughout your page with companies that can pay you. Depending on what type of business it is you could also gain an ally in the long run.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Thursday, September 1, 2016

Should you keep pursuing your career as a California hard money lender?

The real estate business can be a very tough and long process. There is a certain type of grit that you have to possess within yourself to make it as a California hard money lender. You have to be able to pick yourself up at times and drive through it so that you can come out on top in the long run.

The real estate market has had to deal with a lot of backlash in the recent years. The Great Recession near the end of the decade left a bad taste many people’s mouths. States, like California, are still trying to rebuild and remedy the fallout. So where does this place the typical California hard money lender? This could mean hundreds of things that you have to now worry about to make sure your business stays afloat.

For example, one of the biggest things that you have to keep in mind is the Dodd-Frank Act that was passed by Congress. Essentially, the Act was drafted to help prevent another Recession from happening in the future. Within the 14,000 pages, there is a lot of political jargon that is supposedly used to protect the general public; although many real estate professionals argue otherwise. This is very understandable since there are now a lot of new regulations that could affect lenders in a negative way. For example, now there has to be a certain level of transparency with the government. For instance, if in a previous year you made over a certain amount in revenue you have to report it to the SEC.

For California hard money lenders especially the real estate business is a tough cookie.

California has been making steady growth over the last couple of years. After the real estate market took a decline of about half getting back in the swing of things has been an uphill battle for a lot of people that are trying to get their foot in the door. One of the biggest things that you would have to deal with if you do want to become a California hard money lender is the lack of people that want to buy property. So the scraps that you could potentially find may not be sold or paid off for a while. In time as we all know this will lead to less money coming in to your business.

In fact, when you pull up a Google search of current California real estate you will find that a lot of the homes are being sold at extremely high prices. Depending on how you flip the pricing or the way you could potentially award your loan there is not a super high guarantee on a return.

And do not forget about the other California hard money lenders

You also have to remember that there will always be another person trying to get the same clients as you. As soon as you hit enter in your search bar at least 20 different investment firms will pop up, and those are only the ones that have figured out how to work Google analytics. Just imagine all of the smaller California hard money lenders that you will most like have to battle with over potential investments.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Learn To Be A Fix & Flip Investor

Featured Post

The Big Show is Coming to Town.

Monday, September 12, 2016

How to Fix & Flip Homes - 8 Things You Must Do To Be A Successful Home Flipper

Friday, September 9, 2016

California Private Money Construction Loans

California private money financing can be used for a variety of business purpose such as new construction or remodeling/updating your current commercial property. So let’s go over a few important details when it comes to using private financing for construction loans.

Other Things to Consider

New Construction Dreams come true

Thursday, September 8, 2016

The Benefits of California Hard Money Loans

Considering a California hard money loan for your next commercial project or business plan? If that’s where your financing search is headed then it’s important to know the pros and cons.

The Pitfalls of Hard Money

Commercial Hard Money

Wednesday, September 7, 2016

California Private Hard Money Lender Requirements and Regulations

When dealing with a California private hard money lender there are several things you need to know to ensure that you are not falling victim to predatory lending. Moreover, let’s go over a few tips so you are not just borrowing blindly.

The Real Deal with Licensing

Your Win-win Solution

Tuesday, September 6, 2016

California Private Money – Providing a Helping Hand

If you are in the market for some prime California commercial real estate or land, it can be hard to properly manage your expectations. The good news is you may not have to compromise on what you need if you consider your California Private Money options thoroughly.

Types of Private Loans

Advice on Who to Ask

Monday, September 5, 2016

Do California hard money lenders need Twitter or Instagram?

What should you don't post as a California hard money lender?

How can you make money as a California hard money lender on social media?

Thursday, September 1, 2016

Should you keep pursuing your career as a California hard money lender?

The real estate business can be a very tough and long process. There is a certain type of grit that you have to possess within yourself to make it as a California hard money lender. You have to be able to pick yourself up at times and drive through it so that you can come out on top in the long run.

For California hard money lenders especially the real estate business is a tough cookie.

And do not forget about the other California hard money lenders

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