All Forum Posts by: Jason Taken

Hi there,

Great question about financing options for your properties!

If you're looking to pull money out of 10 properties to make new investments, you have a couple of financing options to consider.

### Option 1: Single Loan Per Property

- **Pros**: Each property's loan is separate, so if one property has issues, it won't affect the others. This can also make it easier to manage and keep track of each loan.

- **Cons**: You'll have to deal with multiple loan applications, closing costs, and monthly payments, which can be more complicated and expensive.

### Option 2: Portfolio Loan

- **Pros**: A portfolio loan allows you to use multiple properties as collateral for a single loan. This can simplify your finances and potentially offer better terms since the lender has more collateral.

- **Cons**: If one property in the portfolio has issues, it could affect the entire loan. You'll also need to find a lender that offers portfolio loans, which might be less common.

### Other Considerations

- **HELOCs (Home Equity Lines of Credit)**: You can take out a HELOC on each property or on a few properties to pull out equity. This is like a credit card but tied to your property's equity.

- **Cash-Out Refinance**: You can refinance each property to pull out cash, but this involves new loan terms and closing costs for each property.

### Steps to Take

- **Research Lenders**: Look for lenders that specialize in real estate investors and offer portfolio loans or multiple HELOCs. (We personally do portfolio and single property loans and will be adding a HELOC product soon!)

Feel free to reach out if you need more specific guidance or have more questions Good luck with your investments.

Hi there! Great thinking about using a HELOC to help grow your investment portfolio. It's definitely an outside-the-box idea to transfer the property to an LLC before applying for the HELOC.

If you move the property to an LLC, lenders might see the transfer as a red flag. They may feel unsure about giving a HELOC right after the property's been moved. Many lenders see recent transfers as a risk, which could affect your terms or lead to a denial.

Regarding taxes, changing the property's ownership can have some effects. You might face transfer taxes or reset your property's tax basis. This means new taxes you didn't have before. It's a good idea to talk to a tax professional about this part.

Using an LLC can help build business credit over time, but make sure the immediate needs and potential costs are worth it. Sometimes, keeping things simple is better than making moves that are more complicated.

This is all over brother. We see probably 30-40 garbage scenarios submitted a week where the purchase price is WAY TOO HIGH. We've seen an increasing amount of investors goto the MLS where their margins get eaten alive.

I've been telling every borrower that does this to start finding off market. It's a lot easier than competing for profits against the other MLS shoppers.

 Are you sure it's going to cashflow if you get the downpayment financed?

 What market are you investing in? What resources have you used so far to start gaining knowledge? Any specific questions off the jump?

 We can help on the lending side - and also with agents/other investors. We're over in Chicago area but do a lot of business in your neck of the woods. Contact info in signature.

Are you struggling to break into real estate investments due to stringent credit requirements? Hard money lending can be a critical bridge when traditional financing falls short. At Jaken Finance Group, we understand the challenges new investors face and offer tailored hard money solutions to help you succeed in a competitive market.

Understanding Hard Money Loans

Hard money loans are asset-based financing options that prioritize the value of the property over the borrower's creditworthiness. This approach allows for faster approval and funding, sometimes within days, making it ideal for time-sensitive deals.

Advantages for New Investors:

1. Quick access to capital
2. Flexibility in loan terms
3. Less emphasis on credit history
4. Ability to seize time-sensitive opportunities

Potential Risks and Mitigation:

• Higher interest rates and shorter repayment periods
• Increased likelihood of default
• Impact on credit history if defaulted

To mitigate these risks, Jaken Finance Group recommends:

• Careful exit strategy planning
• Extensive due diligence on properties
• Realistic financial projections

Finding the Right Hard Money Lender

When choosing a lender like Jaken Finance Group, consider:

1. Reputation and experience in similar projects
2. Transparency in terms and fees
3. Speed of processing and funding
4. Flexibility in repayment schedules

Key questions to ask potential lenders:

• What are the down payment requirements?
• Are there prepayment penalties?
• How flexible are the repayment terms?

Comparing lenders is crucial. At Jaken Finance Group, we offer competitive loan-to-value (LTV) ratios and transparent fee structures to ensure our clients get the best possible terms for their investments.

Qualifying for a Hard Money Loan

Essential eligibility requirements:

1. Sufficient equity in the property
2. Clear financial documentation
3. Viable investment strategy

Preparing your financial documents:

• Organize cash flow statements
• Gather property sales contracts and current mortgage information
• Prepare detailed project plans and budgets

Tips to improve approval chances:

1. Present properties with strong appreciation potential
2. Ensure all legal aspects of the property are clear
3. Demonstrate stable income and good mortgage repayment history

Navigating the Application Process

Step-by-step guide:

1. Reach out to a specialist at Jaken Finance Group
2. Compile necessary financial documentation
3. Present a compelling case for your investment
4. Review and understand all loan terms and conditions
5. Avoid common application mistakes

Maximizing Your Investment

Strategies for successful fix-and-flip projects:

1. Conduct thorough market research
2. Focus on value-adding improvements
3. Budget effectively for materials and labor
4. Streamline the renovation process

Managing loan repayments:

• Consider refinancing options
• Set aside funds specifically for loan servicing
• Maintain open communication with your lender

Building long-term relationships with lenders like Jaken Finance Group can lead to:

• More personalized service
• Potentially more favorable terms
• Ongoing support for future projects

Best Practices and Tips

Avoid common pitfalls:

• Don't overlook lender credibility
• Beware of hidden fees or unfavorable terms
• Avoid rushing into deals without proper research

Leverage hard money loans for portfolio growth:

• Prioritize properties with rapid equity gain potential
• Utilize revolving credit for multiple projects
• Continuously assess market trends

Continue your education:

• Attend real estate workshops and networking events
• Stay updated on market dynamics and lending practices
• Leverage online resources and investment forums

Conclusion

Hard money loans from Jaken Finance Group offer new investors a powerful tool to enter the real estate market, providing quick and flexible financing options. While these loans come with higher costs and shorter terms, they can be invaluable for seizing opportunities in competitive markets. By understanding the intricacies of hard money lending, building strong relationships with reputable lenders like Jaken Finance Group, and committing to ongoing education, new investors can successfully leverage these loans to grow their real estate portfolios and achieve their investment goals.

Give me a buzz

We're doing DSCR loans if you want to go over options.

You've go the right idea. Do you want a DSCR loan (long term debt) or short term debt on the refi?