How You Can Use Rehab, Refinance and Cash Out as Long-Term Wealth Building Real Estate Investing
Today we are discussing a somewhat advanced strategy for you to use after you have been in the creative real estate investing business for a while. I call this "Rehab, Refinance, and Cash Out". This strategy can lead to true long term wealth and financial independence. This works very well in a buyers market like Memphis where prices have been quite flat for some time. You need to use this to augment your wholesaling for immediate income and retailing for bigger short term profits.
Rehab, Refinance and Cash Out is a long term wealth building strategy and will be something you will be glad you did as it is a long term buy and hold strategy, and those are the strategies that lead to true wealth accumulation and financial independence.
Let me explain how this works. You find a good middle to low end 3 bedroom home that you are able to buy from an out of state owner or other motivated seller that needs a little work and you buy at 60% of after repaired value. You buy the house using a hard money lender like http://www.pleaseclose.com/memphistrading and do your fix up and have a property management firm manage the property and put a renter in the house. The hard money lender will typically loan you up to 65% of the after repaired value to purchase the house which you use to buy the house and then repair it. Now that the home is repaired you obtain an investor friendly mortgage and cash out by refinancing at 80-90% of after repaired retail value and you should be doing this with properties where this strategy gives you back at least $10,000 at the refinance that you can use in your business any way you need.
Do not use this money to live on, use it solely to grow your real estate business. Once you have done this strategy on 10 homes you should be able to keep finding better and better deals because you can close quickly as you have cash in hand to make things happen. More cash equals better deals and more opportunities.
By the time you repeat this strategy 20 times you should have at least $200,000 cash plus about $200,000 equity and 20 homes giving you at least $2000 per month positive cash flow whether you decide to work this month or not since you have a property management company handling things for you. With average annual rent increases, within five years that $2,000 a month should grow to $4,000 a month. In 30 years you should have $2 to 3 million plus in paid off real estate.
It's a good solid long term strategy to add to your immediate selling from wholesaling, retailing and lease options that the extra $200,000 in cash will help grow tremendously.
The rent minus the management fees and all loan and other costs must leave you with positive cash flow or this strategy should be avoided. If you cannot cash out on the property I don't recommend holding it long term as you want to be able to use your best mortgages to cash out.
You can purchase using http://www.pleaseclose.com/memphistrading if your Equifax credit score is above 550(which is bad credit) or you have a co-borrower who has an Equifax score over 550. A good investor friendly mortgage company will give you good rates if you are at 660 middle score or above and the very best rates if your middle score is 720 or above. Your first 10 investor mortgages in your name and 10 in your spouses name are the easiest to qualify and get the best deals. After those you really need a good investor mortgage company to work with.
Take the time to find the real investor friendly mortgage companies that can help you get loans for 100 properties and not just the first ten and let them have the easy ones and the tougher ones. I do recommend having more than one good lender available though, but stick to the ones that specialize in investor loans. Find out from other investors who the most investor friendly mortgage companies are to use to refinance the repaired home.
I do not advocate becoming a landlord as I do not believe this is a valuable usage of your time and energy. I highly recommend asking around and finding a good property management company that will charge you 10% or less to start out with and gradually lower that % as you add more and more properties.
I feel this is an advanced strategy as you won't see any cash in your pocket from this strategy for 4-6 months after you find the deal which is a long time to work and not see any pay. If you are wholesaling and making consistent money each month then it shouldn't matter.
This strategy will magnify the profits you make in your investing business in ways you might not have imagined. This strategy is a natural progression from wholesaling as you are already helping others find these kinds of deals, now you will be able to get the cash out typical of probably 2 wholesale deals, just paid slower, and at the same time building a nice future nest egg.
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Refinance of Southern California Foster Home Improves Living Conditions
(ContentDesk) March 3, 2006 -- In this business we hear many stories of why people need to refinance. Every now and then one story sticks in the mind, states Donovan Rees of GoldMedalMortgage.com"We recently received a call from Angela P. who needed to refinance her California home. At first it started out normally, but then more specific needs for refinancing came to the surface. Angela and her husband are foster parents that care for several "crack" babies in their home. These babies have been taken away from their mothers at birth because of testing positive for an illegal substance during labor. "She wanted to refinance and use the equity in her home to remodel and add a bedroom.
This extra bedroom would make it more comfortable for the two teenage and two newborn children currently in the foster home," continues Rees."For their situation it was decided that refinancing with a Pay Option mortgage loan program would give them the cash flow needed to cover shortfalls. It...
Refinance of Southern California Foster Home Improves Living Conditions
Refinance > Refinance of Southern California Foster Home Improves Living Conditions
Refinance Home Mortgage
Copyright 2006 Darren Dunner
Are you considering refinancing your home mortgage? Refinance Home Mortgage allows you to take a new mortgage for relatively lower interest rate. Home refinance is nothing but paying off one home loan with another loan. If you do everything correctly you can easily apply for a refinance home mortgage and pay of your other outstanding debts.
A Refinance home mortgage is the best option for those who have a good financial sense and are willing to put their money to good use. Refinance loans can help you consolidate your debt, lower your interest rate and help you get the cash out. Mortgage loans help you to buy residential or commercial properties without paying the full value of the properties up front, while paying a fraction of the real value of the property.
By getting mortgage loans you are pledging your property against the remaining value of it. The opportunities for getting a home mortgage loan have increased tremendously,...
Refinance Home Mortgage
Refinance > Refinance Home Mortgage
Refinance Advisors
The Refinance process may sometimes be too time-consuming and even frustrating to some people.
Some people may like the refinancing to be handled by experts.
Such people prefer to hire a Refinance Advisor to handle the process.
Refinance Advisors are individual professionals or firms that specialize in helping the Refinance applicant to secure the Refinancing loans.
They are known by different names, such as mortgage professionals, mortgage brokers, loan officers, consolidation advisors and more.
Their most important function is to initiate the applications and process them for submission to lenders.
Each Advisor may work for several borrowers and lenders.
How do these Advisors help the applicant?
They explain every aspect of the loan [including the interest rate, how much is to be repaid and in what time duration, the amount of the borrower's late fee in case there is any delay in repayment, methods...
Refinance > Refinance Advisors
Free Debt and Bill Consolidation
Debt and bill consolidation is the process of eliminating debt from many loans by taking out one loan that pays off the many loans, thus enabling the debtor to make a single monthly payment on one loan. This helps in paying off the debt at a reduced interest rate, since the new loan would be a secured loan while the earlier loans were unsecured loans, mainly credit card balances.
A free debt and bill consolidation is when such a process is managed and administered by a debt consolidation...
Refinance > Free Debt and Bill Consolidation
Buy Cell Phones Without Plans
Buying cell phones without plans is becoming extremely popular due to their ultimate flexibility. A cell phone plan is a yearly or bi-yearly agreement the purchaser makes with the company providing reception for the phone. This plan requires that the user not cancel early; otherwise, a penalty of upwards of hundreds of dollars can be levied on the user, which takes the form of a deposit withheld from refund. This level of commitment can be a bother for many people. They may be concerned about...
Refinance Buy Cell Phones Without Plans How You Can Use Rehab, Refinance and Cash Out as Long-Term Wealth Building Real Estate Investing razr phone
Refinance > Buy Cell Phones Without Plans
Bingo It's Coffee. Darren Little, Founder of Bingo.com, is Betting Big on the Healthy Coffee Industry as He Launches Cupofmoney.com
(ContentDesk) October 22, 2005 -- Leave it to marketing visionary Darren Little, 41 of Vancouver BC and the founder of the worlds most popular online Bingo site; Bingo.com, to launch yet another dotcom category creator; Cupofmoney.com -- marketing the worlds first healthy coffee. Simply visit www.cupofmoney.com and click on Learn More says Little. After viewing a short presentation on our products it will become quite apparent why we...
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Refinance > Bingo It's Coffee. Darren Little, Founder of Bingo.com, is Betting Big on the Healthy Coffee Industry as He Launches Cupofmoney.com