Real Estate Investors Association of Greater Cincinnati

In the world of real estate investing, finding the right financing option can be the key to success. One of the most effective loan products that has gained significant attention in recent years is the Debt Service Coverage Ratio (DSCR) loan. DSCR loans are especially popular among real estate investors due to their flexibility and streamlined approval process. These loans are tailored for investors seeking to maximize their portfolios without relying on personal income or traditional credit scores. Here’s why real estate investors should consider DSCR loans as a financing solution.

What is a DSCR Loan?

A DSCR loan is a type of financing where the lender evaluates the borrower’s ability to repay the loan based on the income generated by the property itself, rather than the borrower’s personal income or credit score. The debt service coverage ratio is a financial metric that compares the property’s net operating income (NOI) to the total debt obligations, typically the mortgage principal and interest, taxes, insurance, and any homeowner’s association fees. A DSCR ratio
Read More...

Real estate in a self-directed IRA (SDIRA) is the number one strategy of smart investors who choose their own investments to build retirement income. You can do this, too, if you use a self-directed retirement plan. You’ll become part of a growing class of individuals who control their retirement funds and invest in alternative assets to build wealth and diversify your portfolio.

4 Ways Real Estate in a Self-Directed IRA Earns Income

Building tax-sheltered retirement income with real estate in a self-directed IRA opens a considerable number of doors for investors. While the most common asset is an actual piece of property, there are a myriad of other holdings the average individual might not know about.

Investors who are familiar with the ins and outs of any strategy can put their knowledge to work and invest in those assets in an SDIRA to grow wealth for retirement in a few ways.

Property Appreciation

Typically, the value of a good piece of property appreciates over time. Your IRA can invest in different types of real esta
Read More...

Advanta IRA is one of the nation’s leading self-directed account administrators. We often encounter questions from people who want to know about self-directed investing. Below are 15 of the most frequently asked questions about how a self-directed IRA (SDIRA) works with alternative investments, including types of accounts, a list of common assets, and how to fund a new account.

Using alternative investments to build retirement wealth is a smart strategy in today’s economy—especially when combined with an erratic stock market. Alternative investments often have a low correlation with stock market performance and have the potential to produce positive returns even when the stock market is down and when inflation is high. This is why the SDIRA is becoming more popular with savvy retirement savers like you. 

Top 15 Frequently Asked Questions about a SDIRA

1. What is an SDIRA?
   Self-directed IRAs (SDIRAs) and solo 401(k)s work like their conventional counterparts with two powerful exceptions: 

• Self-directed plans allow alternative investments th
  Read More...

There are 3 figures that go hand-in-hand when trying to determine a commercial/apartment property's value. They are; Net Operating Income (NOI), Cap Rate (CR) and Asking Price or Purchase Price (PP). If you know 2 of the figures you can always figure out the third.

I will be talking about the NOI of a property. More specifically, how NOI is calculated as it relates to an apartment building.

We are going to start with a simplified version of how to arrive at the NOI of a property and then expand each category. Basically, the formula is: Income -Expenses (other than debt service) = Net Operating Income.

INCOME:

First thing, I determine the income generated by the property. I start with the Gross Potential Rental Income (GPI) or Scheduled Gross Rental Income (SGI). Both terms are used interchangeably within the industry. The GPI assumes that all apartments (100%) are rented at full market value even if some are actually vacant or discounted.

For our example, I will use a 30 unit apartment building that has all 2 bedroom, 1 bathroom units with market rents of $600 per month each. Th
Read More...

Let’s face it: making deals complicates our lives.  

When we first become involved in real estate, buying a property can be very anxiety-provoking: I mean, really, even though we’ve done all our due diligence and run the numbers 15 different ways and talked to our favorite mentor about it and it STILL looks like a great deal, how do we ever REALLY know? And this leads to self-esteem problems, as we’re constantly second-guessing ourselves and berating ourselves over our lack of confidence. 

And even for seasoned investors, taking on a new deal is stressful—an accepted offer means that we have to find a buyer, or start a rehab, or put an ad in the paper to get a tenant. Plus, there’s the additional bookkeeping when the checks roll in, and, of course, the taxes to pay on the profit at the end of the year… 

Since stress and anxiety lead to psychological and medical conditions, including high blood pressure, overeating, bad hair days, fear of success, and a whole host of others, making deals should obviously be avoided at any cost. So, I think it’s important, for th
Read More...

We all love control.

I have a six-year-old daughter who constantly pushes the boundaries of her world. Whether it’s brushing her teeth or buckling her car seat, she loves to feel in control.

Isn’t this the case with you, too?

Imagine you're right about to take out the garbage unprompted... and then your spouse tells you to take it out before you even get a chance to. Now you're dropping the trash bag on the floor and telling your spouse to do it because now it is no longer your idea... it’s theirs. 

How about when it comes to your money? Do you want to feel in control of your cash?

Every human has some emotional tie to money. It’s frustrating and stressful when it feels like your money goes in one door only to go right out that same door the next day. How about those gas prices, huh? Or, as a real estate investor, what about those interest rates? Completely out of your control.

Let me ask you this: when you jumped into real estate or entrepreneurship, did you say to yourself, “The money part will just work itself out as long as I keep b
Read More...

Many investors like buying rental properties to make passive income. Passive income is money you earn without having to work for it every day. Owning rental homes or apartments means you can collect rent payments each month without doing much active work.

Take the story of Jim and Cindy, for example. A few years ago, Jim inherited a small two-family home from his grandparents. At first, they weren't sure what to do with it. But after fixing it up, they decided to rent out both units. To their surprise, the rent covered the mortgage payments with some left over. They had stumbled into passive income!

Motivated by this experience, Jim and Cindy used their savings to purchase another rental property a year later. As the properties started building equity over time, they began exploring ways to diversify their investments and revenue streams.

If you already own a few rental properties like Jim and Cindy, you wonder - should I buy more properties, or try making passive income in other ways too? There are several options to consider beyond just more real estate.

Bu
Read More...

There’s a dark secret that many investors know but that no one seems to talk about much. It’s a secret that every full-time investor eventually discovers for himself or pays the consequences. 

To illustrate, let’s take 2 imaginary real estate entrepreneurs, Investor A and Investor B. For the sake of simplicity, let’s imagine that both investors start from the same place. Same income, same credit, same skill level. Then, both attend a real estate conference one weekend in hopes of finding a way to quit their jobs in short order and become full-time real estate entrepreneurs. 

The story of Investor A 
Investor A latches on to a landlording course. He’s attracted to the idea of building wealth and loves the tax-advantaged nature of rental properties. On Monday, he sets out to build a rental empire that will allow him to become financially independent in short order. 

“A” is very successful in finding under-priced rentals in his hometown. His typical deal looks like this: 

ARV:     
Read More...

O.K., so you have gotten it into your blood, mind, and soul that you want to be a Rehabber. Take that ugly, smelly eyesore and turn it into the gem of the neighborhood. No problem, right? After all, you’ve watched all the shows on HGTV. You know all about what countertops to choose…what color schemes will wow your buyers…and that bathroom layout you have etched into your mind is killer….

Well, there may be just a bit more to it than you think.

In this post, I want to address some of the areas you will want to start with before ever lifting a hammer or paintbrush. Some of the things that, if done correctly ahead of time, will make your project run infinitely smoother, save you time and money, and allow you to keep any hair you currently have.

What Needs to be Done?

Believe it or not, this is one of the areas where most of us…even experienced Rehabbers…have some of our biggest challenges. Do I replace the windows? What about the furnace? Should I use Home Depot countertops…Quartz…mid-range? There are a myriad of things to consider here,
Read More...

O.K., so you have gotten it into your blood, mind, and soul that you want to be a Rehabber. Take that ugly, smelly eyesore and turn it into the gem of the neighborhood. No problem, right? After all, you’ve watched all the shows on HGTV. You know all about what countertops to choose…what color schemes will wow your buyers…and that bathroom layout you have etched into your mind is killer….

Well, there may be just a bit more to it than you think.

In this post, I want to address some of the areas you will want to start with before ever lifting a hammer or paintbrush. Some of the things that, if done correctly ahead of time, will make your project run infinitely smoother, save you time and money, and allow you to keep any hair you currently have.

What Needs to be Done?

Believe it or not, this is one of the areas where most of us…even experienced Rehabbers…have some of our biggest challenges. Do I replace the windows? What about the furnace? Should I use Home Depot countertops…Quartz…mid-range? There are a myriad of things to consider here,
Read More...