Hope Business Solutions Group Newsletter: March 2022
Start-Ups and Real Estate Investment
“Business opportunities are like buses, there’s always another one coming.” – Richard Branson
If you have dreams of running a successful business, and you want to do something you love, stop letting every bus drive past you! There are so many opportunities coming your way, it's just a matter of deciding which bus you want to get on. Today, we're going to dive into two hot topics that could turn into your next business opportunity: start-ups & real estate investment. Whether you are looking to start your very first business venture or you are a seasoned business owner looking to branch out, here are a few things you should know...
The Year of the Start-Up
Although 2020 seemed like a year of unprecedented instability in the business world, more than 4 million new business applications were filed last year - which was an increase by over 25% from 2019. These numbers reflect that many people are breaking away from the traditional move-up-the-ladder job path and instead are deciding to start their own business - AND taking advantage of new opportunities!
Even without the challenges presented last year, start-ups face several financial struggles. Those challenges are much greater now - with many lenders shying away from approving funding for start-ups due to the volatility of the business market. But don't worry - that's where we come in!
Getting funding for your start-up is critical for your business's success - one of the top reasons new businesses fail is due to lack of capital. Here are three of the best ways to get funding for a brand new business:
- Secured Loan: If you have good personal credit scores, collateral, or stable revenue, you can use any of those things (or a combination thereof) to secure a business loan. There are several lenders that offer these types of loans, with approval amounts between $5K-$100K or more!
- Credit Partner: A lot of start-ups don't consider this option - but it might be the best choice if you lack strong personal credit, consistent income, or face other approval obstacles. This can help you get access to funding, such as secured loans, via your credit partner!
- Business Credit: Last but certainly not least, business credit is a great option to fund your start-up! Building business credit will take longer than a traditional loan approval, but it will get you access to capital that is NOT tied to your personal credit. AND you can continue to use the credit lines / credit cards over and over again and get approved for more and more funds over time!
How to Fund Your Real Estate Investment Dreams in 2021
Even before the pandemic started last year, the real estate market was always changing. The key to being a successful investor is to be able to identify opportunity and adapt to the fluctuating market. Although a spike in foreclosures is expected through 2022, the unfaltering demand for housing is driving up property values - and the increase in value is expected to continue, albeit modestly, upward for the next few years. Investment properties to keep an eye on include rental properties, vacant commercial properties, and fix-n-flip opportunities.
Now, the most important part of an investment project is, of course, obtaining the money to complete the project! Let's look at some of the top options for covering your project's costs:
- Hard Money Loans: These loans are fast money and often used specifically for REI purposes. Hard money lenders usually don’t look at the real estate investor’s credit score – instead, they evaluate the value of the income property you’re planning on buying to decide whether or not to grant you the loan. Hard money loans are great for fix-n-flip projects; keep in mind, they are short-term (up to only 36 months!) and they come with higher interest rates (up to 10% higher than conventional mortgages).
- Conventional Mortgage: The process of obtaining conventional mortgage loans for investment properties can vary depending on the state, but there are some standard requirements for the real estate investor to qualify: property investors should expect lenders to require up to 20% of the income property’s purchase price as down payment, in addition to credit score requirements and occasionally cash reserve requirements. This option is good if you have stable income and are looking to invest in a residential rental property.
- Commercial Investment Loans: Commercial property investors need to have a solid business plan coupled with a good credit score. Lenders are concerned with the benefits and necessary work needed to improve the investment property in order to see cash flow. There are different types of commercial investment property loans, each with specific terms and qualifications that make them suitable for certain types of commercial properties. Commercial hard money loans are short-term loans to purchase and renovate an owner-occupied commercial property.
- Private Money: Private money lenders can be anyone; including family, friends, neighbors, co-workers, or even other property investors and people you’ve met through your real estate investing career. This type of loan is a go to for property investors who were turned down by banks. They come with fewer formalities due to the close relationship between the real estate investor and the lender. They don’t involve strict conditions, interest rates are typically lower, and the length of the loan is flexible and negotiable.
Remember, if you need to cover some of the cash-up-front costs involved in REI, there are several great options we can help you with to ensure you fund your project with 100% OPM (Other People's Money). If you have a project in mind but need funding, CLICK HERE to see what options we have for you.
Don't wait forever - this year could be YOUR year. Get started TODAY and build the business of your dreams. Here at Hope BSG, we want you to succeed!
Want to learn more about Business Credit?
We provide a comprehensive assessment and consultation to discuss your best path toward financial success for your business. Complete our Business Assessment today and get a jump start for your business! CLICK HERE to complete the assessment.
One more thing...
We deeply appreciate all of our clients and affiliates, it is our sincere pleasure to serve you and be able to interact with all of our prior class attendees, contacts, and clients. Please consider leaving us a review on Google if you have enjoyed our services or one of our classes.
Don't forget to check out our social media pages below to get free information and updates!!
