“It's easy to make a buck. It's a lot tougher to make a difference.”
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Rentals Properties Right for you?
Rental properties are great for those who are looking to build wealth slowly and steadily over a long time span. Being able to understand the math behind a rental property purchase is key to determining whether the property will be an asset to your portfolio, or a drain on your account. The Investor’s Source LLC will provide a comprehensive deal analysis before you take the plunge – and our two-year Rental Property Wealth Builder Loan can provide you with the funding you need to make it happen.
Non-Recourse Retirement Account Loan
The Investor’s Source LLC Non-Recourse Retirement Account Loan can assist you in purchasing real estate within your self-directed retirement account (hereafter referred to as IRA) – leveraging funds you have in that account with a non-recourse, hard-money loan. We can lend you up to 65% of the ARV of the property.
A non-recourse Loan, as required by the IRS, is one in which the lender’s only recourse – should you default in paying it back – is to go after the equity in the property itself. The lender cannot come after you personally, nor the funds in your retirement account.
Buying real estate in your IRA vs. buying it personally has numerous advantages (please consult with your tax advisor about the tax implications of purchasing and using leverage in your IRA):
- As mentioned, the leverage it provides to your IRA
- The current (and/or future) tax advantages of investing in an IRA and having your money grow in a tax-free environment
- Avoiding the early withdrawal penalties that could be incurred by using IRA funds OUTSIDE your IRA to purchase a property personally. For example, if you needed a significant down payment to purchase a property and had funds available in your IRA you could:
- Draw those funds from your IRA and pay the early withdrawal penalty or-
- Use those same funds WITHIN your IRA with no penalty!
- It is easier to qualify than our personal hard money loan – there are no income or assets requirements (although we do pull a personal credit report) and we do require at least 20% of the loan amount in cash reserves in your IRA account (to cover property contingencies).
To purchase properties in an IRA you will need to establish a self-directed IRA through a licensed custodial company. You can find many such companies through a web search of “Self Directed IRA Colorado”.
The Investor’s Source LLC is neither a tax nor investment advisor, and is not qualified to provide tax or investment advice regarding IRAs or any other investments. Please consult with a professional advisor before deciding on any of the investment options discussed above or anywhere else in this website.
If you want to avoid failing in your real estate venture, treat it like a business rather than a hobby. Monitor your business’s health, hire the right people to do the right jobs, and continually find ways to improve your bottom line. Only then will you create something sustainable.
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“Money is better than poverty, if only for financial reasons.”
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Along with the funding of your purchase, The Investor’s Source will fund up to 100% of the repairs on your rental or fix-and-flip property. The funds are placed in escrow and disbursed to you as work is completed. We make sure from the start that you have the money you’ll need to work your magic!
Fix and Flip
Our Fix and Flip loan helps you purchase a distressed property, fix it up and sell it for a profit. Most banks won’t lend the funds to either purchase or repair these distressed properties as the perceived risk is too great. We, of course, are geared up to handle these types of loans including lending you the rehab funds and paying those funds out to you in draws as the work progresses.
At The Investor’s Source LLC, one of our goals is to help you keep as much cash in your pocket as possible. Along those lines, we lend up to 70% of the after repair value (ARV) of the property. This means that, in some cases, we can lend up to 100% of the purchase price and repairs if the 70% ARV loan amount covers this. Find a really good deal and 100% financing could be a reality!
In most cases, though, unless the loan to after-repair value is very low (ie. 60% or less), our lenders like to see some "skin in the game". That means that you have some cash in the deal, and therefore a tangible stake in the outcome. Typically, this would be at least 10% of the purchase price and rehab, and higher for loan amounts greater than $350K.
Our commitment to you is that we will work closely with you to ensure that the amount of money required is reasonable and still makes the deal a good one for you.
Many new fix-and-flippers intend to do all the work themselves. Unless the property only needs cosmetic work – most Front Range fix-and-flips need far more than that - simply being handy with a hammer and a paintbrush isn’t going to cut it, and learning “on the job” can add significant time and expense to the project. Line yourself up with contractors and sub-contractors from the very beginning. You’ll make up the cost of their labor with time saved in getting the property finished, on the market, and sold.
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"Failing to plan is planning to fail."
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Sometimes a deal can look promising up front, but when you run the numbers . . . not so much. That’s why we perform a full analysis on every prospective deal, taking into account all the factors that can impact profitability--from property taxes to carrying costs. We also let you know how much cash you’ll need to bring to closing. If a deal is not going to be profitable for you, we’ll let you know right away so you can pursue the next opportunity!
Transactional Funding (or “Flash Cash”) – We now offer 2 programs for Transactional Funding:
Program #1 – Same Day Transactional Funding - This is for the wholesaler that purchases and flips a property the same day. We provide funds for the “A to B” closing and, if needed, the “B to C” closing as well. Because both transactions occur consecutively, with payoff of the A to B loan the same day, we can charge you less and require significantly less underwriting. We can also usually provide 100% of the funding since it will be paid off the same day.
Program #2 – 30-Day Transactional Funding – This program helps investors who need to take title to the property for up to 30 days, before flipping it, such as with a short sale property. The great advantage to our Borrowers is the high loan to value loans we can offer, since the loan will be paid off within a month. This program requires a buyer under contract with approved financing on the back end.
When fixing up your rental properties, always choose functionality over style. Most tenants just want a comfortable, well-maintained place to spend their time and live their lives. Functional doesn’t have to mean boring – nice paint colors and inexpensive but attractive light fixtures can make a place look inviting, without over-extending your budget
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“Wealth flows from energy and ideas.”
Rental Property Strategies
The Investor’s Source has two ways to fund your rental properties.
Our six-month Capital Preservation Loan allows you to take advantage of great deals quickly with little or no cash down, then refinance soon after with a traditional lender, again with little or no money down as the refinance is based on the new, higher value of the property .
Our two-year Wealth Builder Loan takes the stress out of having to refinance within the typical 6-9 month hard money time frame, giving you a chance to build your credit and/or reserves. Besides lenghtening the loan term, we even drop the interest rate!
Land Development Loans
The Investor’s Source has been a leader in making construction loans throughout Colorado. Due, in part, to the success of this program, we are now working with investors to help them develop land for larger projects such as new sub-divisions. These loans help to take a land parcel from a large chunk of raw dirt to “permit-ready”, entitled, properly zoned lots ready for building. Improvements & budgeted items include site engineering, permits, roads, bridges, fire suppression, sidewalks, landscaping & irrigation, utilities, proper drainage, and environmental compliance.
If your lender says “no” to funding your deal, they may have good reason. At The Investor’s Source, if our deal analysis shows that the deal will not be profitable for you – even though it may be for us - we’ll encourage you to redirect your energy toward a better opportunity. To obtain funding for a deal, our policy is that all deals must be win-win, so if you won’t make money, we won’t do the deal. We’ve had many investors thank us profusely for steering them away from deals which could have hurt their wallets – sometimes a lot!
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NEW and EXCITING things are happening at The Investor’s Source. Back up the truck, cause we’re growing and moving! As of March 6, we will have a new suite - same great building; just bigger space. Our business is growing because of YOU - our amazing Borrowers and Lenders - and we’ll need the space to serve you better, including additional loan officers to give you the best personal service possible.
“The hardest thing to understand in the world is the income tax.”
As we keep discovering every loan, no two deals are alike – and when it comes to funding, a “one size fits all” approach doesn’t always work. Thus, we’ve adopted a more flexible approach to calculating our rates and terms to suit the individual deal, often making the impossible . . . . possible!
Rental Property Wealth Builder
Our popular two-year loan is designed for the investor who wants to acquire as
little as one – or as many as an entire portfolio - of profitable rental properties
and not have to refinance in the traditional 6 to 9 month hard money loan period.
So if you thought hard money was only for short, short term needs, think again.
The Investor’s Source will work with you to find the loan term that suits YOUR
Rehabbing can leave a property vacant for several months, leaving the property vulnerable to vandalism. Minimize your chances for vandalism or theft by keeping doors and windows locked, covering windows with sheets or drapes, and keeping lights on at night.
What Investors Need to Do NOW Through March 15th for the 2016 Tax Year
“The best time to make friends is before you need them.”
Bridge financing allows home buyers or investors to take advantage of great deals
prior to finding an end-buyer for their investment property or while they are
arranging permanent financing to keep the property. It can also be used by
homeowners to help purchase a home while waiting for their current home to
sell. A third application is for a homeowner to borrow funds using the equity in
their home to fix it up for the purpose of getting it ready to be sold.
The Investor’s Source makes bridge loans for all of these purposes on both
investment properties and owner-occupied (primary) residences. We just need a
strong assurance that the property can be sold or refinanced within one year.
These loans, and using the equity in your primary residence for business purpose
loans, are the only loans we make that involve a Borrower’s primary residence.
Please talk to us for more details.
Reality TV shows have people believing that rehabbing a house involves
slapping on a new coat of paint, hammering in a nail or two and selling the
property for a profit. This misconception has people believing that anybody can
renovate a house without experience. These shows have lots of entertainment
and inspirational value but don’t be fooled. Find people who know the
business, enlist their help, and learn what you need to know before you take
7 Fundamental Tips for Becoming a Top-Notch Real Estate Investor
“It is more rewarding to watch money change the world than watch it accumulate.”
Skin in the Game
Although not always mandatory, most private lenders prefer to see some “skin in
the game” – the willingness to put some of your own money into the deal and
assume some of the financial risk. This goes a long way towards convincing the
lender of your commitment. Our goal, at The Investor’s Source, is to keep as much
money in your pocket as possible, while at the same time making the loan
attractive to our lenders. Though it would be great to provide 100% financing to
our Borrowers on all of their deals, the reality is that putting some of your own
money into a deal can sometimes be that little something extra needed to make
the loan work for everyone.
When in the process of fixing up your property—especially one with lots of
potential - it can be tempting to want to make it “a little nicer” with upgraded
materials and fixtures and other “extras.” Those extras can add up quickly.
Don’t improvise too much. Start with a solid plan and stick to it.
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“Coming together is a beginning; keeping together is progress; working together is success.”
“How fast can you close?” is a question we hear almost daily, as investors often
need to close quickly to get their offers accepted. Once we receive your
application, purchase contract, BPO or appraisal report, and supporting
documentation, we can close comfortably in 7 to 10 business days - depending on
our loan load - much quicker than a bank. We’ll do everything possible to get your
deal closed when you need it to fund!
Bridge Financing - Bridge financing allows investors to take advantage of great deals on a new
property while they are finding an end-buyer for their current property or while they are arranging
permanent financing to keep the new property. It can also be used by homeowners to help purchase
a home while waiting for their current home to sell.
This program is perfect for:
1. The investor who needs to close quickly in anticipation of selling the property soon
thereafter, such as when purchasing a short sale to flip, which in most cases must be held
for 30 days before reselling it.
2. The buy and hold investor or homeowner who needs time to improve their credit and secure
3. The homeowner who needs financing to purchase a new home while waiting for his current
home to sell, then using the proceeds to pay off the loan.
Investor’s Source bridge loans can be up to 1 year in term.
Check your comps. How long are houses sitting on the market in your area? If
the average home is taking 6, 9, or 12 months to sell, consider keeping the
property you’re planning to purchase for a rental instead of flipping it – or
simply pursuing deals in more active markets.
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Our 6-9 month Fix & Flip Loan allows investors to acquire, improve, and resell
a property for profit with potentially little or no money out of pocket.
The Investor's Source, LLC will oan up to 100% of the purchase price and repairs
as long as the loan amount is 70% or less of the appraised after-repair value (ARV).
One of our goals is to keep your out of pocket costs down to an absolute minimum -
so you can do more deals, make more money, and, of course, do more loans with us.
If your lender says “no” to funding your deal, they may have good reason.
At The Investor’s Source if our deal analysis demonstrates that the deal will
not be profitable for you, the investor – even though it may be for us -
we’ll encourage you to redirect your energy toward a better opportunity.
To obtain funding for a deal, our policy is that all deals must be win-win,
so if you won’t make money, we won’t do the deal. We’ve had many investors
thank us profusely for steering them away from deals which could have hurt their wallets – a lot!
5 things Private Money Lenders want to know before investing with you
“It's easy to make a buck. It's a lot tougher to make a difference.”
The Investor’s Source does. If you’re building a single-family or multi-family
residence, or you are a contractor constructing a custom-built or spec home, a
hard money loan can be a smart way to finance the construction. Additionally, if
you are adding square footage to a property - expanding the footprint or popping
the top – we can help with that as well.
When fixing up your rental properties, always choose functionality over style.
Most tenants just want a comfortable, well-maintained place to spend their
time and live their lives. Functional doesn’t have to mean boring – nice paint
colors and inexpensive but attractive light fixtures can make a place look
inviting, without over-extending your budget
The 7 Commandments of Choosing a Profitable House to Flip
“Success is where preparation and opportunity meet.”
Want the inside scoop on the latest hot deals? Go to our webpage and sign up
now to become a part of the IS Wholesale Deal Network. You’ll receive advance
notice of some of the best deals around from some Colorado’s most active real
estate wholesalers. If you need more deals, this is a network you’ll want to be
When looking for deals, keep your eye on areas with expanding potential.
Fountain, Colorado City, Grand Junction, Greeley, and other smaller
markets can be goldmines, with much less competitive.
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“Do what you love and the money will follow.”
We appreciate our borrowers’ loyalty and want to work with you for a long, long time.
So, as a number of our borrowers have discovered, we’ll work with you on interest rate and
points once we have a track record together. This can save you $$$ and make working together even more profitable for you!
Consider using our 2-year hard money loan if you think it will take a year or more to qualify for a bank loan on your rental property.
The single character trait that predicts who perseveres and who burns out in Real Estate
"What you do today can improve all your tomorrows."
Ever heard the term Flash Cash? When you are buying and then reselling a
property at the closing table (i.e. “double” or “simultaneous” closing), we can
provide the funds at a significantly reduced rate from our regular hard money
TIP: Not all title companies are created equal. Although most local title
companies are extremely professional and reliable, like any business,
some are more efficient and dependable. It’s always a good idea to ask for
references if you are part of the title selection process.
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“A bank is a place that will lend you money if you can prove that you
don't need it.” Bob Hope
If you need a Proof of Funds letter in order to make a quick offer, we can provide
that same day once we receive minimal documentation from you.
Tip: Don’t get caught up in over-analyzing a property and potentially losing a
deal. Have an “acid” formula to quickly asses its investment value. For
instance, when some investors purchase a rental property, they’ll pay up to
100 times the rent and no more. That usually works out pretty well!
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"Strive not to be a success, but rather to be of value."
Rental properties are great for those who are looking to build wealth slowly and
confidently over a long time span. Being able to understand the math behind a
rental property purchase is key to determining whether the property will be an
asset to your portfolio, or a drain on your account. The Investor’s Source LLC will
provide comprehensive deal analysis before you take the plunge – and our twoyear
Rental Property Wealth Builder Loan can provide you with the funding you
need to make it happen.
Tip: The difference between a private lender and a hard money lender? A
private lender lends his own money, while a hard money lender also raises
capital. Private lenders often offer more competitive rates than a hard
money lender. So why, then, consider a hard money lender? Funds
AVAILABILITY. Private lenders may eventually run out of funds to lend
while legitimate hard money lenders have additional sources of capital from
which to draw. In addition, private lenders may have very specific
parameters for the properties they’ll lend on; - single family, located in
Denver, etc, - while hard money lenders such as The Investor’s Source
have numerous potential lenders to fund almost every type of deal you can
bring to us.
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“Look for your choices, pick the best one, then go with it.”
Along with the funding of your purchase, The Investor’s Source will fund up to
100% of the repairs on your rental or fix-and-flip property. The funds are placed
in escrow and disbursed to you as you complete each phase. We make sure from
the start that you have the money you’ll need to work your magic!
TIP:Care, professionalism, ethics, attention to detail – these are some of the
words our customers have used to describe us – and we strive every day to
live up to the reputation we’ve worked hard to earn. Be impeccable in your
business dealings – your reputation is your fortune!
5 things Private Money Lenders want to know before investing with you
“A good financial plan is a road map that shows us exactly how the
choices we make today will affect our future.”
Alexa Van Todd
Think you’ve found a hot deal? If you need help valuating a property prior to
making an offer, we will be happy to provide you with the tax-assessed value of
any property you’re interested in. You might also want to google the property
address which will bring up real estate sites such as Zillow, Trulia, Realtor.com,
Movato and Redfin – all of which give automated estimates of a property’s value.
Another valuation site you might try, that we use, is www.totalviewrealestate.com/
.TIP: When getting your investment property ready to rent or sell, make sure the
front door projects a welcoming image. If the door looks dated, shabby, or
just plain ugly, it’s worth the price of replacement. First impressions do
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“Money won't create success, the freedom to make it will.”
Fear and stepping out of your comfort zone are common obstacles that prevent
many investors from becoming successful and achieving their goals. Having a
“support system” can help mitigate your anxieties. The Investor’s Source LLC
strives to provide the advice, encouragement, and care you may find yourself
needing during critical decision-making times.
Never underestimate curb appeal when getting ready to flip your property.
Power-washing the house, trimming the shrubs, and replacing a battered
mailbox with a new one are just a few inexpensive ways to freshen the
“Price is what you pay. Value is what you get.”
A hard money loan is not just for the credit challenged . . . .some of our best clients have the cash to purchase a property or two. . . then why hard money? Leverage! They can purchase 3 or 4 or 5 or 6 properties . . . .
TIP: Don’t be tempted to over-improve your property. Granite countertops, cherry cabinets and designer tile are desirable to many, but can be overkill if the other houses in the neighborhood are more modest.
Wednesday May 14, 2014
SIMULTANEOUS CLOSINGS - TITLE COMPANY "WILLS" AND "WON'TS" Contrary to conventional thought, many/most title companies will do double closings. There is really no reason they shouldn't, as it is merely two loan closings back to back vs. time passing between those closings. They follow the same procedures as far as recording the deeds of trust, releases, title insurance, etc. They just do it for two closings. And - they make more money. The more relevant question these days, is, whether they will do "dry" simultaneous closings... Read More