April 17, 2024
Something I’m Reading
Just finished "Rules For A Knight” by Ethan Hawke. It’s super short, but really good.
Something I Photographed
Something I’m Excited About
I’m excited to be back on Financial Freedom Hour this week! I was supposed to host last week but I was selected for jury duty which was a unique and fun experience. It was my first time in 38 years so I can’t complain.
This week I’m going to be teaching “How to Invest in Real Estate with with $700, $7,000, $70,000, and $700,000.” I’ve been really excited about this topic since I came up with it so we’ll be exploring all four scenarios this Thursday at 7pm ET. Don’t miss it!
Something I Can Answer
I’ll be answering two questions asked by a BTB subscriber. Have a question you want me to answer? Reply to this text with your question!
Question: "What's your greatest achievement?”
Easy- I got Heather. When I first met her, I knew from the second I saw her on the grass outside my dorm window that she was the woman I was meant to marry - even before I said a word to her. But it wasn't easy - I had to woo her, charm her, annoy her, and ask FOUR times before she finally relented and gave me a shot. Even then, it wasn't a guarantee. But in the end, I got an incredible wife and an incredible partner.
Question: "'Do you follow the 1% rule for multi-family assets? (The monthly rent from a property should be equal to or greater than 1% of its purchase price)?”
Yes and no… Yes, in that, I DO look at price-to-rent ratio when I'm trying to ballpark whether or not a property or a neighborhood is worth investigating further. (The 1% rule says that a property should rent for at least 1% of the purchase price per month. So, a $200,000 small multifamily should rent for $2,000 per month and it, therefore, should cash flow.). But rules-of-thumb like the 1% rule (or the 50% rule or the 2% rule or whatever) should only be used in that case - a quick and dirty way to decide if its worth further investigation. I'll give you a real life example: let's say someone sends me an off-market lead for a triplex. The price is $400,000 and it would rent for $1,000 per month total. As most of you have probably assumed, there's almost no way that would cash flow because the expenses (especially the loan payment) would eclipse that $1,000 rent.
That is how I would quickly use the 1% rule: as a quick tool to decide if it's worth diving in deeper.
This Week In Lending
This week I want to share the top 5 frequently asked questions we get over at BetterLife Real Estate Funding.
Q: Do you have a minimum loan amount?
A: Yes, for our Fix and Flip loans, we're looking at a minimum loan amount of $100,000. For the rental property loan (DSCR) the minimum is $75,000.
Q: Is there a minimum credit score for qualifying?
A: Yes, minimum score is 680, but the higher the better in terms of opening the opportunity for the best rates and leverage.
Q: Is there an ideal property or location for these loans?
A: Yes, we fund primarily urban properties with some exceptions on the DSCR loans we will go suburban. We do not fund in rural areas.
Q: What's the typical leverage for your products?
A: For the Fix and Flip we fund 80-90% of the total cost. This is 65-75% of the purchase price up front with all renovations funded up to 100% on a reimbursement-draw basis. For the DSCR we lend between 70-80% LTV.
Q: What is one thing that separates you from other companies?
A: Actually there are two big ones. First, our system/portal for deal submission/management is incredible. If you're doing deals on a regular basis, you will love this feature! Secondly, our team is very quick to act.
Do you have a question? We will get you a fast answer. Do you need a deal done faster than normal? Our team will really push for you to make sure you succeed.
If you have a question that's not listed here, email me at Brandon@betterliferef.com. I will provide an answer to you as soon as I can!
Something I Recommend
I was always envious of the people who are “ON” 100% of the time. The people who don’t deal with low motivation, doubt, fear of failure, or those endless days of thinking your whole entrepreneurial journey is about to blow up in your face. These people were running circles around me in business and real estate and when I finally figured out what they had that I didn’t – It all made sense.
These people were using a Mindset Coach to keep their eye on the prize and expose them to a higher level of thinking every single day. So when I went to find one of these coaches specifically for real estate investors, all roads lead to Jason Drees. Jason has been coaching me for nearly a decade at this point and has supported my growth from a small time investor to someone with nearly $1B worth of assets under management.
If you’re looking for an edge to accelerate your growth, talk to Jason. You can get a FREE coaching session through this link.
For my health-conscious friends (or those trying to be healthier), I’ve been using MyBodyTutor for years for accountability on my fitness and diet. These guys assign you a coach to hold you accountable, track your food, suggest exercises etc. You can check them out here.
Disclosure: “Some of the links in this post are affiliate links, which means I may earn a commission if you click on the link and make a purchase. However, please note that all opinions expressed here are my own and I only recommend products or services that I have personally used and found valuable."
Your Friend,
P.S. Comment below and let me know your thoughts on this week’s BTB! Please be friendly :)