All Forum Posts by: Ryan Mapes

Quote from @Devin Peterson:

I would seek a private lender willing to bridge the gap for you short term while your cash is tied up in other deals, once you stabilize the property you can get cash out and pay them back.

 This is a good suggestion if you can a) find a private lender and b) make sure it pencils out.  We're seeing private lenders charging anywhere from 14-18%.  It varies by location, property type, borrower experience, etc.  But, this seems to generally be the average across the country from what we're seeing.

Once you have a few units under your belt, it's worth exploring revenue based financing (RBF) as a way to fund renovations or even a down payment on your next rental.  With RBF, you trade a portion of your future rental income (on your existing properties) in exchange for cash upfront.  It won't count as debt and typically works just fine even if you have an existing mortgage.  It also doesn't require you to give up any equity (many private investors require this).

Happy to chat if you're interested in this route. 

@Scott Swofford 

Once you acquire this fourplex, you might consider revenue based financing for your future renovation or down payment funding needs. This is ideal for those that already own 3+ long term rental units. 

With this approach, you'd trade a portion of your future rental income on your existing investment properties in exchange for upfront cash. Doesn't count as debt and you don't give up any equity. Funds are typically used for either renovations or for the downpayment on your next rental property. Duration is usually shorter term - 12 to 24 months.

Happy to chat if this looks like a good route for your situation now.

@Cian R.  Andrew provided some really great points above.  Another way to fund renovations is through revenue based financing.  This is ideal for those that already own 3+ long term rental units. Your original post is several years old at this point. So, it's quite possible (likely??) that you've grown your portfolio.  

With this approach, you'd trade a portion of your future rental income on your existing investment properties in exchange for upfront cash.  Doesn't count as debt and you don't give up any equity.  Funds are typically used for either renovations or for the downpayment on your next rental property.  Duration is usually shorter term - 12 to 24 months.  

Happy to chat if this looks like a good route for your situation now.  

As others have mentioned, HELOCs can be a great tool if you're sitting on meaningful equity in your primary home. In the current environment, it's quite challenging to get a HELOC on an investment property. So, you're basically looking at equity in your primary home.

Alternatively, if you own 3+ long term rental units, it's worth considering using revenue based financing.  In this scenario, you'd trade a portion of your rental income (from your existing portfolio) in exchange for upfront cash.  Typically, you'd use these funds to renovate your properties or as a down payment on your next rental property.

We can provide this type of funding in all 50 states.  Happy to chat and take a look at your particular scenario if interested.

@Jake Hill 

It's worth looking into using a modern banking platform - specifically, one built for rental property owners (e.g. Release).  This type of banking solution allows you to easily spin up sub-accounts by business entity, property, or even at the tenant level. 

Beyond basic banking features and low fees, it's important to consider what else you'd like to see from your banking partner. A few considerations:

1) Ability to quickly/easily obtain short term funding for renovations or a downpayment on your next rental property. Many banks are really slow or are super strict on their lending criteria forcing you to now work with multiple banks across your portfolio.

2) Ease of use - ability to sync your property management and accounting software so that you can see a wholistic picture of your financial performance across your portfolio. Virtually no traditional bank does this. You'd need to turn to a modern real estate finance platform like Release.

3) Flexibility - ability to open a new bank account at any time of day/or night online without having to walk into a branch. Sounds basic, but most financial institutions won't allow this (we're one of the few that do).

These are just a few examples of how a modern banking platform can actually be a competitive advantage to a rental property owner.  Beyond these benefits, what else would you like to see from your banking provider?

Sounds like it's time for you to upgrade to a modern banking platform - specifically, one built for rental property owners. As you pointed out, traditional banks in the US have largely been slow to adopt new technology. 

Beyond basic banking features and low fees, it's important to consider what else you'd like to see from your banking partner. A few considerations:

1) Ability to quickly/easily obtain short term funding for renovations or a downpayment on your next rental property. Many banks are really slow or are super strict on their lending criteria forcing you to now work with multiple banks across your portfolio.

2) Ease of use - ability to sync your property management and accounting software so that you can see a wholistic picture of your financial performance across your portfolio. Virtually no traditional bank does this. You'd need to turn to a modern real estate finance platform like Release.

3) Flexibility - ability to open a new bank account at any time of day/or night online without having to walk into a branch. Sounds basic, but most financial institutions won't allow this (we're one of the few that do).

Traditional banks/credit unions have remained largely unchanged. And, real estate investors have increasing demanded better solutions/experiences. I think we'll continue to see modern financial platforms fill this void at an even faster pace in the coming years.

As a rental property owner, what else would you like to see from your banking provider?

Has anybody come across a card that helps build business credit?  This potentially helps obtain a large line of credit from lenders down the road. 

@Bryan Greenwood As others have mentioned, most traditional banks now provide the ability to download statements and import them into QuickBooks.  Of course, fees and other functionality/offerings will vary quite a bit from bank to bank.  Banks have largely been slow to adopt new technology.  So, your online banking portal might look like something out of the early 2000s.  

Beyond basic banking features and low fees, it's important to consider what else you'd like to see from your banking partner.  A few considerations:

1) Ability to quickly/easily obtain short term funding for renovations or a downpayment on your next rental property.  Many banks are really slow or are super strict on their lending criteria forcing you to now work with multiple banks across your portfolio.

2) Ease of use - ability to sync your property management and accounting software so that you can see a wholistic picture of your financial performance across your portfolio.  Virtually no traditional bank does this.  You'd need to turn to a modern real estate finance platform. 

3) Flexibility - ability to open a new bank account at any time of day/or night online without having to walk into a branch.  Sounds basic, but most financial institutions won't allow this (we're one of the few that do).  

Traditional banks/credit unions have remained largely unchanged.  And, real estate investors have increasing demanded better solutions/experiences.  I think we'll continue to see modern financial platforms fill this void at an even faster pace in the coming years. 

Credit card companies earn revenue from a few primary sources, which is how they can afford to provide incentives (e.g. cash back).

1) Annual Fees
2) Finance Charges - late fees and interest on unpaid balances
3) Interchange Fees - they earn a percentage of all transactions executed on their card.  As cardholders, we're generally unaware of this component.  But, it's the reason your local convenience store has a "$5 minimum for credit card purchases".  So, even with low annual fees and finance charges, your credit card company still comes out on top.

Personally, I'd like to see one that offered the following:
1) Favorable terms - 0% interest for some period
2) Cash back incentives
3) Points or other rewards that are relevant to my real estate business and personal life (travel, etc).

Anything else that you'd want to see?