The In’s and Out’s of Due Diligence

The Importance of Due Diligence

When investing in real estate proper due diligence is one of the most important keys to success. There are many issues that can arrive after closing that could have been prevented with a little homework. Thankfully, many professional underwriters and lending companies will aide in this endeavor once a contract has been accepted.

The due diligence period generally refers to a set amount of time one has to investigate the aspects of the property after a contract is accepted and before closing. During this time the buyer may back out of the contract for any reason without repercussions. Generally, the length of time is pre-determined by either the state (usually 10-15+ days) or agreed upon in the contract and begins when escrow is opened.

Every lender and title company will have a set list of what they require to complete what they believe is proper due diligence on an investment. This not only protects them but you as the buyer. However, not everyone’s requirements and parameters are the same. A private individual lender may require very little due diligence to be done while the bank will have you jumping through hoops. Knowing what to look for and expect is crucial in this business regardless of if you are doing it all yourself or leveraging your team.

Buyer’s Due Diligence

  • Physical Inspection – plumbing, structural, roof, HVAC, pests, septic, well, etc.
  • Crime (including sex offender) statistics
  • Upcoming building plans in the neighboring area / Zoning
  • Talk with neighbors to get the inside scoop on the area
  • Median Household Income
  • Surrounding Rental Rates
  • School Rankings
  • Repair Quotes (if applicable)
  • Estimate your Debt to Service Coverage Ratio – DSCR (if applicable)
  • Review of Seller’s Disclosures
  • Property Rights
  • Submit all requested documents to lender
  • Review all legal documents for accuracy and understanding

Lender’s Due Diligence

  • Review of all documents for accuracy and suitability
  • Contract / Assignment – review terms and make sure the seller has the right to sell property etc.
  • Deed or Proof of Ownership – review chain of custody
  • Interior and Exterior Photos
  • Scope of Work / Lease Agreements
  • Bank Statements
  • Background Checks – this can include criminal, credit, tax liens, death index, bankruptcy, lawsuit history, etc.
  • Insurance Quotes – verify amount, terms, address, type (hazard, flood, windstorm, vacant, occupied, builder’s risk, commercial etc), and insured names
  • Flood Determination – what flood zone does the property lie in
  • Corporate Docs (if applicable)
    • Certificate of Formation
    • Certificate of Filing
    • Operating Agreements
    • Amendments
    • Resolutions
    • FEIN or W-9
  • Entity Search – verify the entity is active and managing members
  • Driver’s License (state ID’s) – citizenship
  • Social Security or W-9
  • Contact Information from borrower
  • Appraisal / Survey – Value of property and boundary lines
  • Permits
  • Homeowners Association (HOA) – restrictions and verify dues are up to date
  • Verify Taxes are Current and that there are no liens
  • Review of Title Commitment
    • Legal Descriptions
    • Policy Amount
    • Encroachments / Easements
    • Liens – Verify Clear Title / Judgements
  • Review of Loan Package and Closing Disclosure


  • Phase 1 Environmental (if applicable) and Phase 2 if needed
  • Proposed Plat Changes
  • Drawings / Spec’s
  • Executive Summary
  • Rent Roll
  • Feasibility Study
  • Pro-Forma P&L

Ready to Invest?

This list is in no way meant to be used as a complete guide to due diligence, but it aims to serve as a starting point. There are many things to consider when investing in real estate and are often driven by one’s school of thought. Asset based lenders vs. credit-based lenders will have varying requirements, as well those investors who invest in fix-n-flip, rental, and commercial loans. The bottom line here is to do your homework throughout the entire process. Make sure you ask lots of questions and that you understand the legal documentation you are signing. Consult with your lawyer or financial advisor if you have questions or are still unsure. Don’t be afraid to walk away from a deal if you find an issue during the due diligence period that the seller refuses to fix or can’t. Better to lose a small sum of cash than to get in over your head. Be sure to partner up with a lender that you can trust. Now that you are armed with this knowledge, get out there and find some deals!

Calculating DSCR

If you are a part of the real estate investing world, then you probably have heard that properly calculating a property’s debt to service coverage ratio (DSCR) is crucial. If you are newer to investing, you may wonder why it is so important. Lenders use this equation to determine if a rental investment property’s cash flow is enough to cover their borrower’s loan payment in addition to all re-occurring expenses. As a borrower, the DSCR can help you gauge the profitability of your project saving you time and money.

The formula is quite simple, but first you must learn another acronym, PITIA. PITIA stands for property, interest, taxes, insurance, and association (HOA). These are the most common re-occurring expenses taken into consideration by a lender.

To calculate the DSCR take your annual rental income (numerator) and divide it by the property’s annual PITIA (denominator). The result is your DSCR. Anything below a 1 means you have negative cash flow and would be an unlikely candidate for approval.

Be sure to check with your lender regarding their DSCR requirements. As a rule of thumb, shoot for a DSCR above a 1.25. Remember, the higher the number the better chance for profitability. You can also find a DSCR calculator online at

How to Add Value to Investment Properties

Everyone wants to get the most BANG for their buck when it comes to real estate investing, but where to start can be overwhelming. Luckily, there are a few simple things you can do to accomplish just that and increase the value of your fix and flip property.

Add a fresh coat of paint.

The older your property is the more likely it will need a new paint job inside and out. Stick to neutral colors, as the majority of people may not share the previous owners love of red walls. A dove, oatmeal, or cream color are great choices for inside as they go well with most décor. A lighter color will also make your interior rooms appear larger.

If your interior is covered in dark wood paneling, consider removing it. This trend went out in the 70’s and we can say, “good riddance!” Another option would be to paint over it. Many beautiful renovations choose a soft neutral white to brighten the space. Pair it with a light beige or gray on the walls and it will look beautiful, while staying within budget.

For the exterior, power washing can do wonders and remove years of dirt and grime. If a new paint job is in order, then do not hesitate. You can also consider replacing exterior doors and doing some simple landscaping – at the very least mow the yard. This will help your curb appeal and entice buyers.

Trash the carpet?

Flooring decisions should be based on the condition of the flooring, the price range of the home, and your budget. First, check under the carpet to make sure you do not already have wood floors. You may luck out. If you do, a quick refinish can save you a ton of money.

Consider keeping existing floors if they are in good condition and are consistent with what buyers expect and demand in that particular market and price range. If you do trash the carpet, be sure to select a flooring option that is within your budget and will add value to the property. For example, you don’t want to blow your budget and install premium hardwood floors in a home that you plan to sell for $100,000. Manufactured wood, tile and/or carpet may be the better option.

Upgrade light fixtures.

Outdated light fixtures can easily date your home.  Conduct a quick web search to find more appealing options that will modernize the space. This quick fix can change the entire tone of a room and is well worth it.

Also, consider changing out your light switch and outlet coverings. If your electrical allows for it see if you can install a dimmer.

Upgrade the appliances.

Stainless steel, matching, and energy efficient appliances can help increase the value of your property. If you find dents on the doors to your appliances consider replacing just the door. 

Consider bathroom upgrades.

If you can add another bathroom, do it. Even a half-bath can increase your home value by 10% +/- in some areas. If that is not in the cards, focus on updating the ones you have. Regrouting the tile, removing the tacky wallpaper and replacing old shower fixtures can do wonders for your space. Opt for a new vanity, frame the mirror, build a vanity – the options are endless and all will help the home show better.

Add a bedroom.

Another way to add value to the home is adding bedrooms. This may not always be an option, but there are ways to add bedrooms without adding square footage to the home. One idea is to turn an existing study into a bedroom by adding a closet. This can be an easy alternative that adds significant value to your investment without breaking the bank.

Don’t forget to deep clean.

This should be common sense and part of everyone’s rehab process. A little elbow grease never hurt anyone and if you simply just do not have the time, consider hiring professional cleaning service. Otherwise, a dirty home may be a red flag for prospective buyers who may assume that the home was not well taken care of. Be sure to remove stains from the carpet (if you decided to keep them), make sure your bathrooms are mold and mildew free, clean the baseboards, etc.

Upgrade the kitchen cabinets.

Depending on your budget and condition of your existing cabinets, you may not need to completely replace them. Consider splashing a new coat of paint on them and replacing the door pulls. This simple step will help to update your kitchen in a major way.

Replace windows.

Replacing older windows will give you the chance to update the look of your home. Be sure to opt for energy efficient options, as this will significantly add value to your investment project.

Remember that you do not have to do it all. Chances are you have some major big-ticket items that must be taken care of first.  When considering rehab, especially the cosmetic stuff, always consider your target buyer, location, and budget. If your rehab is in a lower income area you may want to skip the fancy modern light fixtures no matter how good of a deal you get on them. Prioritize and spend money on what matters.

Talk with industry professionals about the right updates for your project. Discussing these options with a hard money lender you can trust will help ensure you make choices that will increase the value of your real estate investment, without blowing the budget. Be sure to include a contingency in your scope of work to help cover unexpected expenses and stick to your budget. Many new flippers get wrapped up in the fun of cosmetic upgrades opting for unnecessary improvements and imposing their personal style preferences. Always remember that your fix and flip property is an investment, not your forever home. Focus on what matters and choose the best renovations for resale.   

Commercial Real Estate Terms Investors Should Know

Commercial real estate is in a league of its own when it comes to the real estate world. Evaluations, terminology, due diligence, and requirements all change when one ventures into this type of investment. Here are a few popular terms to help you feel more confident in this arena:

Real Estate Broker A licensed real estate agent/firm that has completed additional training and who negotiates deals between buyers and sellers serving as intermediaries.

Letter of Intent (LOI) – a pre-agreement between two parties to hold terms while due diligence is being conducted and finalized terms are being set.

Executive Summary – Summarization of the proposed business plan. Gives an outline of strategy, management, financial projections, exit plan, descriptions, property details, improvement, etc. This is usually the first document potential lenders/investors see and will determine whether they decide to move forward on a deal and learn more.

Building Classifications – Industry standard divides commercial buildings into three letter classifications to help investors better understand a potential investment.

(Classifications can be upgraded through renovations)

  • Class A: These are the best quality buildings in said market area. Rents are typically above average; buildings are newer with better amenities and fewer maintenance issues. Class A investments generally hold the least amount of risk.
  • Class B: These would be considered your “average” properties that command average market rents, have mid-grade cosmetics, show slight wear and tear and are usually a bit older than your Class A’s.
  • Class C: These properties tend to have the most maintenance issues but are the most affordable of all classes, so they are often in demand.

Net Operating Income (NOI) – A standard real estate formula, used by lenders and borrowers alike, to determine the potential profitability of a commercial property in relation to operating costs.  This is calculated by subtracting the operating expenses from the total income of the property.

Balance Sheet– a report which includes a list of a company’s assets, liabilities, equity capital and debt at a point in time.

Profit and Loss Statement (P&L) – is a record of revenue, cost, and expenses incurred by a business in a given period of time.

Pro Forma – A report that outlines a properties future projected potential cash flow. This can be found by subtracting the projected future expenses from the gross rental income minus vacancy rate.

Capitalization (CAP) Rate – A formula used to determine what a potential investor’s return will be on a property. Net Operating Income/Property Value = Cap Rate

Rent Roll – a document that shows rental income (present and historical) from a real estate asset. This information is then used in many formulas to determine profitability.

Debt Service Coverage Ratio (DSCR AKA DCR) – The annual net operating income from a property divided by the annual cost of debt service (Insurance, Taxes, HOA fees, etc). A DSCR below 1 means the property is generating insufficient clash flow to cover debt payments.

Scope of Work – a document that outlines work to be completed and estimated cost for materials and labor on a specific property. This document will be used to determine loan amounts and the After Repair Value (ARV)

Environmental Site Assessment (ESA) –  a report often required by  your state and or lender for commercial acquisitions that identifies  the existence or potential for environmental contamination liabilities.  This is one of the first steps in commercial due diligence. If contamination is found a Phase II assessment may be performed.

Easement – a legal right to use another person’s property for a specific public or private purpose written into public records.  Easements can be created for a variety of reasons. Common easements include driveways, fences, utility, etc. These should be listed in your title commitment.

Encroachment – The intrusion of a structure that extends, without permission, over a property line, easement boundary or set back line. This can be found out by conducting a survey.

Whether you’re looking to buy, sell or lease commercial real estate, knowing these commercial real estate terms will benefit your business. This knowledge will help you make informed decisions, like determining if a property is a good commercial real estate investment. It will also help you prepare for conversations you will have with potential lenders when looking at commercial real estate loans. Armed with the right knowledge and vocabulary, you will be ready to dive into the world of commercial real estate investing and have the important conversations needed to grow your investment portfolio.

How To Start Investing in Real Estate

Thinking of investing in real estate, but not sure how to begin? First and foremost, know that you are not alone. Real estate investing is a great way to build your wealth, but when you have little to no experience it can seem a bit overwhelming.

Do Your Research.

We have all heard the old adage that knowledge is power, and it still holds true today. One of the best pieces of advice one can be given is to do their research. In this day and age, there is no excuse not to. So much information is available to us instantaneously. Begin by learning popular real estate terms. So often I get asked the definition for “ARV” and “deed of trust”. Arming yourself with the basic understanding of the lingo is imperative.

Time is of the essence, and most people feel they do not have enough of it. However, if you are serious about real estate investing you will find time. Listen to a podcast, eBook, or real estate talk radio while you are driving in the car, working out, or as you drift off to sleep. This is a great way to get your head in the game and learn while doing it.

Grow Your Network.

Your network equals your net worth! Surround yourself with like-minded people. There are so many avenues one can pursue with real estate investing, but one thing is certain, you will need trustworthy, competent people at your side. Do your research and build your network. Most large cities have Real Estate Investment Association groups (REIA’s) which are great places to learn the industry while making contacts. Many teach classes on real estate investing, tell both success and horror stories, and introduce you to reputable industry professionals and investments. Lenders, title companies, contractors, CPA’s, real estate attorneys and real estate agents are all worth getting to know. Leverage the experience and the field of expertise of those around you.  These people will help you grow your business/investments setting you up for success.

Find a Mentor.

An ideal mentor is an experience investor with time and knowledge to share. They can help you stay on track, keep focused, and guide you in the right direction. Be sure to ask lots of questions. Find out what your mentor did to become successful and mimic it.

Assess Yourself.

Next, you will need to do an honest assessment of yourself and your situation. You do not always need a lot of cash on hand or a perfect credit score to take advantage real estate investments. However, knowing your limitations will help set you up for success. 

Other questions you will need to ask yourself is how much time you have to dedicate to your real estate investments. If you have a full-time job, volunteer three times a week, and must keep your schedule as well as your kids, you might be better suited for a passive investment. One that does not take a lot of your time. Therefore, a fix and flip project may not be best suited to your situation. Semi-passive to passive options like real estate notes might work best for you.

Decide on the amount of risk you are willing to take. Do you have extensive knowledge in the industry and a pool of cash for investments that would allow you to go after those high-risk high-reward opportunities? If so, commercial deals might be your niche. Are you close to retirement and principal preservation is imperative, consider funds or REIT’s? Do you need passive monthly income? Consider a rental property. There are both aggressive and conservative options out there and knowing which category you are comfortable in will help guide you to the right investment.

Additional items to consider are the type of funds you are looking to invest; cash or structured funds (IRA’s, 401K, etc). If you, will you be investing as an entity or as an individual and what the taxing consequences might be in direct correlation to your situation (seek the advice of a CPA). Look at state laws and how they might affect your investment. These questions can be deciding factors.

Find a Trustworthy Lender.

Most new investors have limited cash resources. If that is your situation, consider finding a lender who can help you. There are private lenders, banks, hard money lenders and others out there who can help you get started. Even seasoned investors often use outside financial resources to help them grow their investment portfolio. Be sure to do your research and ensure your lender is trustworthy and deserves your business. Ask for referrals or ask your real estate networking group if you are having trouble finding good lenders.

Make Your Dream a Reality.

Once you have done these things go out and find your investment, do the leg work, and make your dream a reality. Remember to be realistic in your expectations and set goals. Do not overextend yourself either mentally or financially. Keep your mentor close, leverage the experience of industry professionals and never forget that your knowledge and network are the two most important things in your arsenal. This is how you will set yourself up for success.

Questions Investors Should Ask Prospective Lenders

Hard money lending is a quick and easy financing solution to fund real estate investments, such as rental properties, rehab financing, fix and flips and even commercial bridge loans. Finding the right lender to meet your unique needs is not always easy. Here are some questions to ask when determining the right lender for you and your investment business.

1. How long will it take you to fund my loan after my application is complete?

Without a doubt, time is money in the real estate investment business. Hard money lenders should be able to approve and fund a hard money loan within 2 weeks. Sometimes lenders can fund deals within 3-5 days. It’s important to note here that it’s critical that you must have all the required documents and items in for your application to be complete. Lenders can get you funded more quickly if you stay on top of completing your application. It also can be helpful to use the same lender for multiple deals, especially if they offer technology and resources like a user loan portal to make the loan process more efficient for investors.

2. Will you provide a pre-approval letter I can use to submit with my offers?

Finding good deals for fix and flip properties is already tough and competitive. Buyers who don’t already have a property under contract and intend to begin making offers soon will have a greater chance of having their offers accepted if they also submit a pre-approval from an experienced hard money lender. It’s important to ask your potential lender if they provide pre-approval letters so you don’t miss out on a good property.

3. Will I work with someone who is knowledgeable about my business and projects?

Not all lenders have experience and knowledge in the game of real estate investing. Choosing a lender that has first-hand experience in the business of flipping homes and investing in real estate is a game changer. Investor Loan Source was created by real estate investors who know your unique needs and understand the market. 

4. Do you offer loan extensions? 

It’s important to understand if an extension would be available for your loan due to unforeseen circumstances. Establishing this with a lender before you need an extension can be less costly than needing to ask for one once you’ve taken out the loan.

5. Will there be a prepayment penalty if I pay my loan off before the full term is up?

It’s common for many lenders to have a small prepayment penalty when a minimum amount of interest must be paid on the loan. In many situations the prepayment penalty will not affect the borrower in any way. Find out if there are any pre-payment penalties and make sure it works for your proposed timeline.

6. What loan to value of the after repair value are you able to offer?

Hard money lenders loan out based on the after repair value (ARV) of the asset. The loan to value ratio (LTV) of the (ARV) is the loan amount the lender will allow based on the fixed up value of the property. This ratio can vary from lender to lender. The LTV/ARV percentage will also vary based on the property type and age. It’s essential that you find out the answer to this question early in the game to avoid big road blocks and ultimately having to find a different lender or rule out a property.

7. Do you work with customers with imperfect credit?

Many investors worry that they will not be able to qualify for a loan if they don’t have a high credit score. Hard money lenders usually lend based on the project and property itself vs. the buyers creditworthiness. They are a great resource for buyers who have had some hiccups in their credit history. It’s important for you to ask if they have a minimum credit score in the very beginning. Your rate and points charged may be effected some, but oftentimes hard money lenders will not turn you down based on your credit score alone.

8. Do you have any references?

A good, reliable hard money lender will be able to offer references from investors who have borrowed from them in the past. If the lender is unable to provide any positive references, they may not be the right lender for you.

9. What are your interest rates and how many points do you charge?

Points and interest rates vary across regions and by lender. The type of loan is an important determining factor. For instance, fix and flip loan interest rates are often higher than rates for purchasing a rental property to buy and hold. The riskiness of the project also affects the interest rate. In general, hard money loan rates are higher than traditional mortgage loans due to the risk involved.  In both traditional loans and hard money loans, interest rates and points charged vary based on a borrowers credit history.

10. What loan products do you offer?

Many investors have different types of properties in their real estate investment portfolio. It’s essential to find a lender that has unique products to fit your unique needs. At Investor Loan Source, we offer a wide variety of loans – fix and flip, rental, wrapable, one-time close fix to rent and commercial loans to help grow your business.

In order to be successful in investing it’s important to find the lender that is right for you and your business. If you’d like to learn more about Investor Loan Source or our products, visit, call us at 409-735-6267, or reach us via email at

ARV: What It Means and Why It’s Important

In real estate ARV is short for after repair value, or the estimate of a property’s value after all repairs and upgrades are completed. For real estate investors, especially those who flip houses, this number is important because it calculates the margin between the “as-is” value of the desired investment property and the value of a developed property that has been completely renovated.

ARV = Property’s Current Value + Value of Renovations

It is the basis of the property’s selling price, comprising the purchase price plus the total cost of repairs. The key to the profitability of property flipping is that repairs more than pay for themselves.

The after repair value will help you plan your strategy and also help determine which real estate financing choice is best. The ARV can provide investors a pretty good picture of what they can sell an investment property for.

In order for the ARV to be accurate, the investor will need to be able to get accurate repair estimates and insight into the local market. Seasoned investors that have been flipping homes for years can usually walk into a property and assign a value based on their knowledge and experience quickly. For newer investors, this will not be the case and it will take a good bit of time.

The ARV is a calculation of a snapshot in time – the value of the property under the current housing market conditions and the home’s state of repair at the time of calculation. This value can change daily throughout the renovation cycle of a home.

What Is the 70% Rule?

Maximum Purchase Target = (ARV x 70%) – Estimated Repairs

This rule is popular for real estate investors. It tells you the maximum you should spend on a flip property. However, it is only a general guidance and you should not consider it an ironclad rule.

After Repair Value (ARV) Limitations

The housing market can change, causing comparable home values to go up or down. Renovation costs can also vary and there may be hidden damage in the property.

In addition, an appraiser might value properties differently than a realtor or investor. Lenders use appraisals, which could lead to a lower pre-repair property value. Flippers must be good negotiators when they buy a distressed property and then sell it after repairs. A flipper good at estimating repairs but poor at negotiations may not receive the property’s ARV at sale time. 

Need Help Assessing Your Potential Property?

Investor Loan Source is not your everyday lender – we were created by real estate experts who know the markets and typical renovation costs well. If you need help assessing a property and determining if it is “a good deal,” or not, please reach out to us. We are committed to helping investors grow their wealth through real estate. Need a loan? We have a wide variety of products for your fix and flip and rental properties, as well as commercial and wrapable loans.

New Year’s Resolutions for Real Estate Investors

A new year is the perfect time to reflect on the past year and celebrate your achievements, identify areas with room for improvement, learn from the setbacks and move forward. It’s also the perfect time to set new goals and come up with attainable resolutions both personally and professionally. For real estate investors looking to grow their business and achieve financial success, setting new, tangible goals is imperative.

For many of us, 2020 seemed to drag on due to COVID scares and shut-downs. It came with many speed-bumps, hurdles and other uncertainties and discouraging events. Ready for 2021? We all are. Here are some useful resolution ideas to help this year be a more lucrative one for your real estate investment business.

  • Work to Increase Your Return on Investment

For new real estate investors, this means staying focused on finding opportunities with low risk and high profit. Looking at your expenditures, monthly and yearly costs to see if there are areas you could save money is critical for both seasoned and newer investors. One easy step is to ensure you aren’t overpaying for utility services. Another is to review rental rates on a regular basis to be sure you are charging rent consistent with the local market. Smart investors will also learn how to efficiently schedule contractors, pre-apply for permits, pre-order supplies and aggressively price and market their properties for quick sale. Each day saved equates to less money towed to your lender in interest. Evaluating the cash coming in and the amount of cash going out regularly will help you identify ways to increase your return on investment.

  • Mix Up Your Strategy to Find New Properties

Using MLS may be easy, but it won’t usually allow you to get ahead of your competition in finding hot investment properties first. Consider hitting the streets in your car to find for sale by owner signs this year. Focus on networking and growing your contact list. Be sure to include realtors, investors and contractors. A good contact list may help you learn about new foreclosures and opportunities before anyone else.

  • Improve Your Time Management

Improving your time management can help you both personally and professionally. Consider waking up an hour earlier each day and setting that time aside to answer emails and planning your daily list of items to get done that day. Stay focused on accomplishing that to-do list before you get sidetracked. You may find that you get more done in the day if you plan it out carefully. For those that simply don’t time for the more mundane tasks of answering emails and making phone calls, think about hiring a virtual assistant to help free up your time for tasks that could be used for making investment deals.

  • Improve Your Marketing Strategies

Thoroughly planned marketing improvements will generally lead to a more profitable investment business. If you are not on the social media bandwagon, hop on in 2021! If you already have a social media presence, set a goal of increasing your followers by 10% this year. Streamlining your websites, direct mail and mass email can all also help you grow your business.

  • Refine Your Investment Portfolio

Last year you may have found your niche. Now is the time evaluate your portfolio and identify properties that just don’t fit anymore. Or maybe you’d like to diversify your portfolio and invest in single family notes. Look over your portfolio and plan how you want your portfolio to grow this year. Decide which markets you’d like to explore. Carefully planning your strategy and talking with your investment advisor will help you refine your portfolio successfully.

  • Learn Something New

Personal growth can be achieved through learning something new and expanding your knowledge. Interested in learning more about commercial real estate investing? Join an in-person or online group or attend webinars. Take a course or read a book about something you’ve always wanted to learn. The possibilities are endless. Hopefully you’ll enjoy the process as well.

  • Improve Yourself

Need to drop 10 or 20 pounds? Want to exercise more? Stay committed by joining a health club, or sharing the goal with a friend or fitness group. Stay more organized this year by using a planner, app on your phone or cleaning out your office. Communicating proactively and more often is also a great resolution that will also help you as an investor. Improving yourself can reduce your stress level and lead to a more positive 2021. Decide what areas of your life are bringing you down or need the most improvement and focus on that. You will thank yourself later.

Most resolutions are easy to set and harder to keep. The key is making small improvements each day. Whatever went wrong in 2020, learn from that and move on. Don’t let the past hold you down. You have a cleaner slate and a fresh opportunity to build a better real estate investment business and ultimately a better you. Ready to dominate in 2021?

Having a great lender to partner with you in 2021 is essential. Let Investor Loan Source help you by walking you through our loan products. Contact us at 409-735-6267 if you have questions or email our loan specialists at for more information.

Hard Money Loans Made Easy

There are many financing options for real estate investors available today. One of the most popular options has become the hard money loan. A hard money loan is a loan collateralized by a hard asset (in most cases this would be real estate). One of the biggest differences between a hard money loan and a conventional loan is that hard money lenders use the value of the property versus the borrower’s creditworthiness to determine the loan.

Hard money loans tend to have terms of 12 months, but some can be extended to as long as two to five years. This works in favor of investors who plan to purchase a home in need of repairs, rehab it and sell it quickly for a profit

Advantages of Hard Money Loans

One of the biggest advantages is that there are less restrictions with hard money loans when comparing them to traditional loans. Lenders rely less on a borrower’s credit score and more on the value of the property itself. This allows borrowers with a less then perfect credit score to obtain a loan.

Another key benefit of hard money loans is that they can be acquired quickly. Loans from banks and traditional lenders often take up to 60 days to issue, while hard money loans can often fund in a week. This is especially important if investors hope to acquire properties with competing bids. Time is money in real estate and time is on your side with hard money.

Hard money loans also provide tremendous leverage for fix and flip and buy and hold investors. The investor can enter a project without putting their own money at risk and remaining liquidity. This is a huge reason real estate investors seek out hard money lenders in Florida.

An Easy Decision for Investors

Although many investors with imperfect credit scores find hard money loans easier to qualify for, because of the higher risk involved these loans often come with higher interest rates. Despite this, they are an integral part of the the real estate investing process and can be utilized when a traditional loan doesn’t make sense or is too difficult to get.

Hard money loans aren’t just for flippers. At Investor Loan Source, we offer loans for rental properties, as well as commercial investment projects. Be sure to ask one of our loan specialists about our exclusive wrapable loans, commercial and one-time close fix and rent options. We make hard money easy – the application process is fast and simple. Contact us at 833-457-2274, email us or apply online today.

Advantages of Investing in Rental Properties

There is no doubt that when done right, investing in real estate can be very lucrative. Whether you invest in fix and flip properties, notes, commercial or rental properties, the payoff can be huge. There are many advantages of investing in rental homes you should know about if you are considering becoming a landlord.


One important benefit to consider is leverage. You can use a small amount of your own money while borrowing and the rest. When investing in real estate, you don’t have to pay the full amount for the property. Instead, you are able to put a down payment (sometimes even as low as 0%) of your own money and get a loan from a bank, private lender or a hard money lender to fund the remaining. While you only put a small percentage of your own money down on the property, you are able to fully control the property and benefit from 100% of the appreciation.

Cash Flow

Any money left after paying your monthly expenses is money in your pocket. Buy smart and you can generate a monthly income from your tenants in the form of rent above and beyond what it costs to own the property. This is cash in your pocket that you can enjoy for as long as you own and rent out your property.


Over time rental properties tend to appreciate in value, which means while you are collecting money in the form of rent you can sit back and watch the value go up. You are able to profit from the passive income while paying off the mortgage, then later sell the property for a higher price and profit from it again. Score!

Tax Benefits

There are many tax advantages of investing in rental properties. If you receive a rental income from the rental there are numerous rental expenses you may deduct on your tax return. Expenses may include mortgage interest, property tax, operating expenses, depreciation and repair. There are quite a few tax benefits – be sure to consult with your tax professional to ensure you understand all tax implications prior to investing in real estate.

Security and Control

Another important benefit of rental property investments is that you are in control of what property to invest in, where it is located, who to rent to and what to charge for rent. You have very little control when investing in the stock market and many other investments. Investing in real estate is also considered one of the most secure investments you can make. Compared to the volatility of the stock market, real estate markets tend to be very stable. It is important to keep this in mind when choosing between investing in real estate versus stock.

Ready to purchase a rental property and need help with funding? Investor Loan Source has buy and hold loans that can help you grow your investment portfolio. Apply now or contact us at 409-735-6267 to get started and begin reaping the benefits that come with owning a rental property.