General Investing

by Tim Herriage Tim Herriage 1 Comment

Change, Growth, and Focus

It’s been three years since I left B2R. It’s been five years since I sold the REI Expo. The last three years have been fun. They’ve been tough. They’ve been great. They’ve been horrible. So goes the life of an entrepreneur. I find this is a little more true in real estate investing. The daily swings of being a small business owner are wild.

Change is scary

2020 REI was founded in 2015 to help create a place where real estate investors could go to for help. Not the kind of help that they were accustomed to either. The type of help we wanted to provide was different. We wanted it to be more about service. We wanted the customer to come first. I think we’ve done that, and am proud we did. Some things we tried were stupid. Some things we tried were great. Some things we tried were fun but just didn’t make good business sense.

I tell you all of this because the company has yet again changed direction.

Through a series of strategic relationships and partnerships, we’ve either spun off, sold or dissolved all of the companies that form the Group, making the group no longer necessary. It’s akin to what I’m doing now with my oldest son, who turns 18 Monday. We’ve set these companies up for success, and now it is time to send them on their way.

So, effective February 28th, you’ll see the following changes:

H&R Acquisitions
This is my house buying arm. It will be re-branded as DFW Investors. The real focus is on conveying that we buy houses across the metroplex, and have for years.

Investable Realty
You may not be aware, but we closed the real estate brokerage in September of 2018. This was a decision that was difficult. The business made money, but not enough to justify the expenses and time. We are in the process of selling the name and assets. We’ll announce it when the transaction is finished.

Consulting and Training
We no longer offer any consulting or training services.

Events
We really enjoy running events, but they are a headache. We are launching a new website, www.REIEvents.com later this month. This new site will be focused on creating a nationwide directory of real estate investor related events. We’ll still host an event or two every year, but for now we’re going to focus on making the site helpful.

Fund Management
We’ll be closing out the Elevate SFI Fund this year, and do not anticipate raising any additional capital at this time. The fund was a success, but George and I have decided not to take on any more partners in our development ventures.

Financing
We’ve began a transaction to sell our lending company. This transaction will be really good for all investors. We’ll become a direct lender, with access to a large amount of capital. Check out www.3LFinance.com for more information.

Insurance
Our insurance division (REI Choice) will begin the process to become it’s own entity in the near future. It has experienced tremendous growth in the past 12 months, and I’m excited about the possibilities it brings. We’ve now insured over $100,000,000 worth of assets in twelve short months. This company will begin to get a lot more organized by standing up on it’s own. The beginning of it is at www.REIChoice.com

Wholesale Properties
We will still offer wholesale properties from time to time. Those will be offered through InstantEquity.com. Instant Equity is an online listing engine for discounted properties. It is a free directory to post and browse properties.

Real Estate Investor Directory
We launched BestHomeBuyers.com last year to offer a directory service for real estate investors. This concept needs developing, but I am excited about the possibilities. Listings are free to post, and we do not charge the viewer.

by Tim Herriage Tim Herriage No Comments

APARTMENT INVESTING IN 2019: WILL THE GOOD TIMES CONTINUE?

A growing trend among investors is to diversify by getting into multifamily. I know plenty of investors that have made a lot of money in multifamily, but it can be just as dangerous as rewarding. I’ve known Brad Sumrok for more than a decade now. I do not know anyone that has more multimillionaire apartment investors swear by them than I do Brad. Brad’s team are excited to cover the information below, and more.

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by Tim Herriage Tim Herriage No Comments

Robert Greenberg to Share Market Intelligence

I’m not sure I was ever as connected to the real estate investor space as I was when I ran B2R Finance. When you engage with so many borrowers on a daily basis, you really stay connected locally from a national position.

My friend Robert is the Chief Marketing Officer for Patch Of Land. Robert is one of the most capable marketers I’ve met. At Patch Of Land, he is always trying to understand what challenges the customers have and looking for ways to address them. Robert will be speaking about several different topics at the Annual Summit.

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by Tim Herriage Tim Herriage No Comments

The Big Bang – Scott Horne’s Real Estate Journey

Very few people have impacted my real estate career like Scott Horne. Scott has been an active real estate investor for decades. He has weathered the market swings, and helped countless entrepreneurs get their start. I am lucky to be in that group. At the Annual Summit this year, Scott is going to be discussing:

  • What happened in 1986 and in 2008 (the big ones)
  • The other economic bumps along the way
  • What happened to him and his companies
  • How he navigated the changes that occurred
  • Lessons learned
  • Things to consider today since the market will change (it always does)
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by Tim Herriage Tim Herriage No Comments

Featured Speaker: Nick Fortune

We’re pleased to announce that our friend, Nick Fortune, and his company Fortune DNA have agreed to present at the Annual Summit and are now the host sponsor.

Nick Fortune

Nick has been highly praised by many of our customers as being a wealth of knowledge and providing the exact services they’ve been looking for.

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by Tim Herriage Tim Herriage No Comments

Timing your investment property refinance

Leverage is one of those things that can make or break your real estate investment portfolio.  The proper use of leverage can minimize your tax burden, fuel portfolio growth and accelerate returns.  The improper use of leverage can wipe away gains and bankrupt a company.  We believe the US economy has cooled, home prices are peaking, and interest rates will continue to rise.  These factors coupled together have formed our conclusion that now could be the best time in the market cycle to leverage your assets utilizing fixed debt.

Many real estate investors have enjoyed growth in the last five years fueled by loose purse strings at local banks and regional lenders.  Even the GSEs have dipped their toes in the water.  Large national firms like Blackstone’s B2R Finance (Now Finance of America Commercial) and Colony American Finance (Now CoreVest) offered five and ten year balloon notes on portfolios beginning in late 2013.  Now, we find ourselves five years later, and what does the next five years look like?

Below are our forecasts and recommendations with regards to leverage and your real estate investment portfolio:

  • Identify dates:  Many of the “community bank” loans have renewal and adjustment provisions.  Most real estate investors we talk to have no idea that most of these loans can be called due in full at the same time as they are supposed to “reset”.  If you have any loans that are due to reset, adjust, mature, or renew in the next five years, now is the time to address those loans.
  • Lock in rates:  Many real estate investor simply cannot remember when a 9% interest rate on rental property from a bank was a good deal.  Rates are still very low throughout the industry.  We believe the best choice for most real estate investors right now is to lock in as much 10 year or longer sub 7% money they can get.  The next five to seven years should see interest rates rise and fall several times.  We are still in a very low comparative rate environment, so it is best to make sure any debt that might need to be addressed within the next decade be done so now.
  • Cash Out:  Many investors aspire to pay off their rental portfolio.  While this is a noble idea, most real estate billionaires believe in the opposite.  The ability to responsibly borrow tax free money (that your tenants will pay back) which you can use as reserve funds or even growth capital is something that powers real estate investing at all levels.  We have clients that live virtually tax free by refinancing their rental portfolios routinely.  With the introduction of cash flow based cash, out refinances; investors now have an avenue to systematically re leverage their portfolios.

In short, we think:

  • Property Values are high (which helps LTV limits on loans)
  • Rates are still low (historically)
  • There are market shifts coming (which is why you don’t want exposure to adjustments, renewals, and loan maturity)

These factors make use believe now may be the perfect time to stabilize the debt on your rental portfolio.  Reach out to our team of real estate investment loan specialists today to have a conversation about your needs.

Want to call us?  Call 972-737-1850

Want to email?  Click Here

Have questions or comments?  Let have a conversation below.  Find this article helpful or thought provoking?  Share it please.

by Tim Herriage Tim Herriage No Comments

Liability – The unpredictable killer of assets

By Andrew G. Costlow

Many people wonder about insurance. We think we know what it is for, but why does it cost so much? How can we reduce expenditures on the “insurance tab” on our spreadsheets?

Of course we can shop property rates etc… but the one thing you want to really make sure you are “squared away” on is Liability. Why is this and why is liability the unpredictable killer of assets? How can I protect myself from liability? General Liability Insurance as stated by a Google search page:

General liability insurance (GL), often referred to as business liability insurance, is coverage that can protect you from a variety of claims including bodily injury, property damage, personal injury and others that can arise from your business operations.

Google knows everything right? Well, in this case they do a decent job. But look at the definition and you come to the conclusion that General Liability (GL) is a very broad term. What does it cover? “and others”? What is that? Indeed, it is “General” Liability.

The majority of claims that come out of GL are of the Bodily Injury and Property Damage type. If you hurt someone or damage their stuff, that is what we are talking about here. But why is it the unpredictable killer of assets? To understand that as investors, we have to think about the other side of the insurance coin and that is property insurance. Property insurance is predictable in most cases. Let’s say there is a $100,000 house and it is insured to value. It burns to the ground in a total loss. The insurance carrier knows it has to pay $100K. The investor knows they are going to be paid $100K. Everybody knows within a predictable certainty what that claim is about and how much is going to be paid. Now, let’s think about GL. Here is the scenario… an investor is flipping a house and it is vacant. A couple of teenage kids are playing around in the vacant dwelling (we hope there isn’t a vacancy clause exclusion…) and one kid falls and breaks their arm. This claim can go so many ways. Will the parents just take him to the ER and put it in a cast and be done with it using their own medical insurance or will they take him to the ER, not having medical insurance and then start getting bills from the hospital? If it is the latter, how are they going to pay? Do they have the money? Will they sue the Landlord? For what expenses will they sue? Was there negligence involved? If so, how much negligence was there and how does that translate into dollars? This is why Liability can be the unpredictable killer of assets and why General Liability Insurance is so important. There are just so many variables.

In most cases, liability claims are pretty straightforward. But, some can be very complex and very expensive. That is the crux of the matter. They are unpredictable. Thankfully though, they are pretty rare for the residential investor. Thus, General Liability is a pretty good bargain in the SFR investor industry and is something the SFR investor should be “squared away” on to protect their portfolio.

Andrew G. Costlow
REI Choice Insurance
Executive Vice President
2020 REI Group | REI Choice Insurance
Direct/Cell: 214.280.9575 | Office: 214-247-7727
8330 LBJ Freeway
Suite B855
Dallas, TX 75243
andy@2020rei.com

by Tim Herriage Tim Herriage No Comments

Stated income, no doc, rental and fix and flip loans

Our finance team has been hard at work over the past few months! We’ve secured several new loan options that can meet almost any investors needs. We work offer over 50 different loan products, so let’s connect today, to see which one is right for you.

WE ARE REBATING ALL APPRAISAL FEES AT CLOSING FOR ALL APPLICATIONS RECEIVED BEFORE OCT 1

RENTAL LOANS

  • 30 year fixed or a combination of ARM options (IO too!)
  • Property Cash flow financing (not personal DTI)
  • Rates as low as 5.5%
  • FICO as low as 600
  • CASH OUT with 30 days seasoning
  • STATED income and asset loans

FIX AND FLIP

  • No appraisal options
  • Quick close (48 hours) options
  • Origination between 1.5% and 2.5%
  • Rates as low as 8%
  • Some no credit check options

We specialize in finding the right loan for your project and the right timing for your needs. Depending on your timeline, liquidity, and mid-fico score; some products may not be available at certain times. Instead of telling you NO, we find you the best option available.

Use this link to fill out a contact form

OR

Call 972-737-1850

OR

Email loans@2020rei.com

No brokers, please.

by Tim Herriage Tim Herriage No Comments

Quick Close Loan in AZ, CO, TX, TN, and NC

Real Estate Investment Financing Program Overview

This quick close loan product is only available in Arizona, Colorado, North Carolina, Tennessee, and Texas.  We generally limit it to non-rural areas with a population of at least 20,000 people within the county where the property is located.  The interest rate on these loans is 12%.  The origination is as follows:

  • Arizona: $1,500
  • Colorado: 2%
  • North Carolina: 2%
  • Tennessee: 3%
  • Texas: 2%

Loan Type:  Fix & Flip, Buy & Hold, Rehab, Cash Out, Refinance, Construction, Transactional Funding, and Bridge Financing

Property Type:  Single Family Residential and Multi-Family (non-owner occupied); limited commercial

Loan Size:  $50,000 to $2,500,000

Loan-to-Value (LTV):  Up to 70% of after-repair value (ARV)

Loan-to-Cost (LTC):  Up to 90% of purchase price (rehab financing up to 100% available subject to borrower qualification)

Loan Term:  6 months with option to extend

Lien Position:  First position

Borrower Qualification:  No income requirements. No credit check. No minimum FICO scores.

Borrower Type:  Business / Entity

Prepayment:  No prepayment penalty

Closing Speed:  24 – 48 hours. Minimal paperwork*

Other:

  • Appraisal not required*
  • Credit score not required*
  • No “junk” fees*

REAL ESTATE FINANCING IS STRICTLY FOR BUSINESS AND/OR INVESTMENT PURPOSES ONLY (I.E. NON-CONSUMER)

*majority of loans

Jennifer, Lisa, and Patricia are our amazing representatives for our loan products.  You can fill out the form below, email loans@2020rei.com,  or call 972-737-1850 today to speak to them.

FILL OUT THIS FORM TO GET STARTED

by Tim Herriage Tim Herriage No Comments

The Power of 1031 Exchanges

This month, Lu Ann Blough will present “The Power of 1031 Exchanges – Multiply your dollars” as the June Continuing Education (CE) for Texas real estate agents.  Agents receive complimentary CE, but everyone can attend this session.  The course will cover: Identify those real estate transactions which are eligible for IRC 1031 consideration. List and understand the six (6) basic components. Identify the statutory requirements for a Qualified investment(QI). List and describe the specific functions and role of a QI. Recognize that 1031 Tax Deferred exchanges need to be a part of a client’s tax planning strategies. Taught by Lu Ann Blough with ERG. 1hr MCE. Course number: 30958

CLICK HERE TO REGISTER FOR THE FREE MONTHLY DFW INVESTORS MEETING ON JUNE 7TH NOW

In this class you will learn how to:
1. Identify those real estate transactions which are eligible for IRC 1031 Exchanges.
2. List and understand the six basic requirements for a 1031 Exchange
3. Identify and understand what to look for when choosing a qualified Intermediary
4. Recognize that a 1031 Exchange should be part of an investor’s retirement planning strategy.

MORE ABOUT LU ANN:  Lu Ann Blough brings 20+ years experience in the title industry, reinsurance and real estate industries to the Exchange Resource Group team and acts as Regional Development Manager. She is the proud mother of three sons, Matt, Daniel and David. Matt currently works in the insurance industry, Daniel works for a commercial real estate company and David is currently attending Purdue University and plays quarterback for the Boilermakers. Lu Ann grew up in Deerfield, IL attending Deerfield High School. She spent her undergraduate years at Vanderbilt University in Nashville, TN where she received a Bachelor of Science in Psychology. She began her career working in London for a Lloyds of London Insurance Broker.

Lu Ann Blough || direct 972-863-1031 || LuAnn@erg1031.com
Regional Development Director || Exchange Resource Group || www.erg1031.com

MORE ABOUT ERG:  ERG is a nationwide qualified intermediary (QI) specializing exclusively in all types of 1031 tax deferred exchanges, including complex reverse, construction, and improvement Exchanges. The principals of the company have a combined 50+ years facilitating 1031 Exchanges.

1031 Exchange Services – Texas – Exchange Resource Group, LLC is a qualified intermediary (QI) handling all types of 1031 exchanges in Texas, including reverse, construction, and real property exchanges. We provide 24/7 support so you can ask us questions anytime.

We provide educational and transaction support to investors, buyers, sellers, CPAs, attorneys, brokers, real estate agents, banking and title professionals to ensure that clients are comfortable (and even excited!) using a 1031 exchange to defer paying taxes on even the most complex deals.

ERG Provides:

Education
Document Preparation
Secure Holding of Funds
Timeline Tracking
Transaction Support
With 40 years of experience and 12,500+ transactions behind us, you’ll get expertise that saves closings and keeps deals from falling apart.

Our team prepares and reviews the documents necessary to complete your exchange and properly comply with current Section 1031 tax law offering you the protection and assurance you need to complete an exchange.

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