Property Records of Maryland Lists How to Boost Cash Flow by Using Other People’s Money

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Property Records of Maryland is an online property history report business that details major changes on a home-like an added bedroom, expanding kitchen, renovation, and more. The easy-to-read property detail report lists what caused the property value to go up and when. This information is helpful to show the potential homebuyer if a property is worth buying for the asking price.

 

Property Records of Maryland helps the real estate market community by listing simple ways to make money, refinance, increase credit score, and much more. 

Use Other People’s Money to Finance Growth

One of our most trusted advisors, who happens to be an attorney, gives this advice to clients and will use and have used it with the tremendous outcome. There is no one way to fund growth, and whatever options someone decides on will likely depend on the source.

“If someone wants to get started by being very clear of the intent,” says, Jason R. Matthews a professor at John Hopkins University. Don’t tell anyone to run out and do this. In fact, this might not be the right strategy for anyone at all. Don’t try to give legal, tax, or investment advice. Simply by sharing with people what one should do and what others have seen sellers do, with some success. Leverage is key, but whenever someone uses it people are taking on additional risk, and that should be a consideration before implementing any new method.

If people currently have a rental portfolio there is a good chance someone has built up some equity over the last few years. People are absolutely amazed at the values in some neighborhoods where others own property. For example, Buyers might own a few properties in Northern Maryland, a starter home area with good rents. A few years ago people could easily find houses in this area for under $100,000. A few years before that, Buyers purchased two for under $70,000 each. By having an appraisal sitting on the desk right now for a client that is doing a flip in this area for $180,000.

Appraiser

This report is from an appraiser that has proven to be accurate over the years. If the values of these really are in the mid to high $100,000s, Sellers have some equity and some options to consider. Some people love equity and it makes them feel good to have it.  In fact, it is some people’s goal to actually pay off their houses. Sellers feel strongly that this is a poor growth strategy for most investors. When people have this conversation with them, they tell me the reasons they want to do that, which almost always includes increased cash flow.

Buyers will typically share their opinions and change the topic so that sellers remain friends. What almost all the conversations have in common is that the people who are trying to pay off their rentals agree that the equity in those houses is producing a zero percent return. The equity itself is not helping them accomplish their goals. Buyers understand the good feeling that comes with the low-risk approach of paying off the properties. If that is more important than growth, it is something buyers should do. With that said, if people have some risk tolerance and understand it, buyers may consider putting that equity to work.

There Are Two Ways to Access Equity

People can pull it out in the way of a loan and keep the property or are able to sell it. In a hot seller’s market, it might actually make sense to sell, so that is certainly a valid option. Whether someone decides to refinance it or sell it, what someone does with the money is vital to the decision. If buyers don’t have anything to do with the cash and plan to stick it in the bank, then don’t do anything. People need to have a plan and the ability to generate returns in excess of what someone can borrow. 

“Sellers don’t have a good reason for this, but whenever people leverage to create cash flow like this,” says Matthews.

Risks

The difference between what someone can earn and what others pay for the money needs to be significant enough to justify the additional risk. Let’s say someone purchased a property in Aurora North several years ago and owes less than $50,000 on it now. Let’s also assume that it is on a good street out there and that this appraisal on the desk is accurate, meaning that the house now might be worth $180,000. Let’s also say that someone can only borrow 70% of the value meaning the maximum loan is about $125,000. That gives someone $75,000 to put to work on this one property. Buyers don’t have a good reason for this, but whenever Buyers leverage to create cash flow like this people like to see a minimum of a 3% spread; anything less than that, and typically won’t work.

Many Investment Options Are Available

People have many investment options, but if someone wants to stay in real estate they will most likely either look for another rental property or get into private lending. Another rental is likely a fantastic option, but with it being so tough to find them, it might make sense to get into private lending now while everyone waits for the market to shift again. With private lending, the buyer should be able to earn 8% or more.

If someone is working with a professional, 8% is probably in the ballpark of what he or she should expect. Doing this alone, people should be able to get much higher than that. For this example let’s use an 8% return, knowing what should get at least that.

Media Contact
Company Name: Property Records of Maryland
Contact Person: Customer Service
Email: Send Email
Address:1783 Forest Dr. #252
City: Annapolis
State: MD 21401
Country: United States
Website: https://propertyrecordsofmaryland.com/

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