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These FAQ’s are some of the questions that we frequently get asked. The questions and answers are not intended to be exhaustive, nor do the questions and answers create any relationship or duty on our part to assist or lend to you. The information, however, is intended to be helpful and to assist you in determining if a hard money loan is a good fit for you. If we haven’t answered your question here, we encourage you to contact us to discuss your specific question or need.

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General Real Estate Questions (5)

If you are cash flowing, yes.

If you are in the deal for the appreciation and/or breaking even,  no.

Rentals should not be a headache if you are using a good property manager, training your tenants from the start, using correct documents for leases, move in check lists and setting expectations.

Oh yeah…and making sure the property is in good working order to begin with.

Mr Landlord, Jeffrey Taylor, calls his tenants, Residents.  His website is full of great information and tips on how to change your mindset about being a landlord. If you have a problem owning rentals, first look in the mirror, that may be your problem.

I believe that buy and hold is the best mode of building wealth because it meets several money saving and cash building options.

First of all, you should cash flow. This means your mortgage payment is lower than 75% of the monthly rent income. Second, you can deduct expenses, saving on taxes. Third, you can depreciate the house and everything in it. Fourth, interest payments are still deductible as a business expense. Fifth (these are in order) the house should appreciate over time.  I have that one last because you should never by a house based on appreciation, that is the cherry on top.

I would never reduce my rent to keep a tenant.  I would upgrade the house to attract a tenant (that is a tax deductible improvement) or to have them stay.  Rent should be increased every year like clock work even if it is just by $10.00.

First…What I tell investors who have one or two rental properties and have primarily used their cash to fund the purchases, is that their money is the most expensive money they can use. When you tie up all or most of your capital into one or two deals you have effectively prevented yourself from securing anymore deals.

If you have little or no cash on hand and an opportunity presents itself, you will need to borrow money to secure this new opportunity and most lenders will not lend to you with little or no liquid capital in your accounts.

Leverage is the name of the game when scaling just about anything. If you have capital locked up in one or a few assets you should look into refinancing them to open up liquidity to secure the ability to leverage those funds into the purchase of several more assets.

Example: You can buy one house with $100,000 or you can buy 5 houses with 20% down and leverage the other 80% from a lender. The debt owed is mitigated by the cash flow of the property, the depreciation you can claim on taxes and the appreciation you earn tax free as the market improves and the property values rise.

Secondly, meet as many wholesalers as you can and take care of them. They will bring you deals that no one else is seeing and you can get great rental properties this way. Also, don’t be afraid to buy a rental that needs more than paint and carpet – evaluate the work needed and the monthly lease differential between doing the work or not, a lot of times its worth the work.

Purchasing a property without proper Title Insurance and/or Property insurance; the potential for loss is theoretically unlimited if you do not secure your investment with proper insurance.

Fix & Flips (1)

Purchasing a property without proper Title Insurance and/or Property insurance; the potential for loss is theoretically unlimited if you do not secure your investment with proper insurance.

Rentals (5)

If you are cash flowing, yes.

If you are in the deal for the appreciation and/or breaking even,  no.

Rentals should not be a headache if you are using a good property manager, training your tenants from the start, using correct documents for leases, move in check lists and setting expectations.

Oh yeah…and making sure the property is in good working order to begin with.

Mr Landlord, Jeffrey Taylor, calls his tenants, Residents.  His website is full of great information and tips on how to change your mindset about being a landlord. If you have a problem owning rentals, first look in the mirror, that may be your problem.

I believe that buy and hold is the best mode of building wealth because it meets several money saving and cash building options.

First of all, you should cash flow. This means your mortgage payment is lower than 75% of the monthly rent income. Second, you can deduct expenses, saving on taxes. Third, you can depreciate the house and everything in it. Fourth, interest payments are still deductible as a business expense. Fifth (these are in order) the house should appreciate over time.  I have that one last because you should never by a house based on appreciation, that is the cherry on top.

I would never reduce my rent to keep a tenant.  I would upgrade the house to attract a tenant (that is a tax deductible improvement) or to have them stay.  Rent should be increased every year like clock work even if it is just by $10.00.

First…What I tell investors who have one or two rental properties and have primarily used their cash to fund the purchases, is that their money is the most expensive money they can use. When you tie up all or most of your capital into one or two deals you have effectively prevented yourself from securing anymore deals.

If you have little or no cash on hand and an opportunity presents itself, you will need to borrow money to secure this new opportunity and most lenders will not lend to you with little or no liquid capital in your accounts.

Leverage is the name of the game when scaling just about anything. If you have capital locked up in one or a few assets you should look into refinancing them to open up liquidity to secure the ability to leverage those funds into the purchase of several more assets.

Example: You can buy one house with $100,000 or you can buy 5 houses with 20% down and leverage the other 80% from a lender. The debt owed is mitigated by the cash flow of the property, the depreciation you can claim on taxes and the appreciation you earn tax free as the market improves and the property values rise.

Secondly, meet as many wholesalers as you can and take care of them. They will bring you deals that no one else is seeing and you can get great rental properties this way. Also, don’t be afraid to buy a rental that needs more than paint and carpet – evaluate the work needed and the monthly lease differential between doing the work or not, a lot of times its worth the work.

Purchasing a property without proper Title Insurance and/or Property insurance; the potential for loss is theoretically unlimited if you do not secure your investment with proper insurance.

All programs and guidelines are subject to changes, modifications, deletions and/or cancellations.

Carolina Capital Management, LLC
325 S. Oakland Ave. Rock Hill SC 29730
Phone: 803-831-2262 | Fax: 336-217-8432

Private Money Lender Servicing NC, SC, GA, TN, VA and parts of FL

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