Learn To Be A Fix and Flip Investor: How to Use a Cash-Out Texas Bridge Loan to Grow Your Portfolio

Thursday, April 18, 2019

How to Use a Cash-Out Texas Bridge Loan to Grow Your Portfolio

A strong real estate investment portfolio can pave the way to a comfortable lifestyle, but sometimes plans stall out due to lack of capital for the next purchase. A cash-out Texas Bridge Loan can be the tool that gets your plans back on track.

Developing a real estate portfolio, as opposed to focusing purely on fix-and-flips, can give you a steady stream of reliable income. The difference is, with fix-and-flips, you get a sizable amount of cash at the end of the deal, which you can then turn around and apply to your next property. When your funds are tied up in a property you plan to hold, it’s not always easy to move onto the next project. This is where a cash-out Texas Bridge Loan works wonders.

If your existing property is paid for or you have a considerable amount of equity in it, you can tap into that equity to fund the next project, but chances are you’ve never heard about this because the banks don’t like to do it. They will, at times, offer a similar option, but they expect you to spend the money on the property you’re borrowing against, which isn’t particularly helpful if that one’s already up and running and generating revenue.

So, without the banks helping you, where do you get the cash? From a Texas Hard Money Lender, of course. While a Texas Hard Money Lender will still want to know how you plan to spend the cash and will want to be assured you’ve got a solid exit plan mapped out, you aren’t tied down to using the money on the property that’s being leveraged.

Cash Out Can Help You Buy and Hold or Buy and Flip

Most Texas Hard Money Lenders will do a cash-out Texas Bridge Loan for up to 65% LTV (loan-to-value), meaning you can pull out as much as 65% of the value of one of your existing properties and use that cash toward the next project. However, if you know where to look, you can sometimes get as much as 90% LTV. People use cash-out options for different applications. In some cases, they take the full lump sum and apply it to the purchase and repair of a property. When the repairs are complete, they may sell it and pay off the balance or they may hold it and refinance. There’s also the option of using it to help cover what another loan won’t. If, for example, an investor gets funding for the purchase of a new property, but doesn’t get enough to cover the repair, the cash-out option will work there too.

If you’re eager to build a portfolio, you don’t have to wait any longer.

Naturally, it’s important to be mindful of how much you’re tapping into your portfolio to ensure you’re not overleveraging it. However, if you’ve got at least one revenue-generating property with solid equity, you can continue to grow and increase your earning potential with a cash-out Texas Bridge Loan.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.