The Importance of Loan Planning for Real Estate Investors

08/25/23 • 28 min

Fullerton Real Estate Investing & Real Estate Financial Planning™ Podcast

Real estate investing is a little like the game of Chess. You can play the game with an elementary understanding of the basic rules. But, you soon learn that just knowing how the pieces move about the board are the table stakes for being able to sit at the game board.

If you want to do well, you need to start thinking about the consequences of your actions. And, not just the consequences of your actions for the immediate next move, but the consequences for moves multiple turns into the future.

The same applies to real estate investing... you need to be thinking not just about the deal analysis and loan of the property right in front of you; that’s table stakes. You need to be thinking about what the consequences are for that property far off into the future and, if you’re good, for multiple properties and multiple loans into the future.

That’s why loan planning is so important and why we’ll cover it in detail in this mini-class.

Check out the video from this class here:

The Importance of Loan Planning for Real Estate Investors - Video

In this class, James discusses:

The 10 loan limit from Fannie Mae and Freddie Mac for purchasing non-owner-occupant investment properties
Why are these loans important to real estate investors
What do you use after you reach the limit?
Why is it important to optimize these 10 loan spots?
What are some exceptions to the 10 loan rule?
A strategy to double your loan spots
The NomadTM preferred loan plan
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Fullerton real estate investor podcast? Book a free consultation to discuss.

The Importance of Loan Planning for Real Estate Investors

That’s why loan planning is so important and why we’ll cover it in detail in this mini-class.

Check out the video from this class here:

The Importance of Loan Planning for Real Estate Investors - Video

In this class, James discusses:

The 10 loan limit from Fannie Mae and Freddie Mac for purchasing non-owner-occupant investment properties
Why are these loans important to real estate investors
What do you use after you reach the limit?
Why is it important to optimize these 10 loan spots?
What are some exceptions to the 10 loan rule?
A strategy to double your loan spots
The NomadTM preferred loan plan
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Fullerton real estate investor podcast? Book a free consultation to discuss.

Previous Episode

Hard Money and Private Money for Real Estate Investors

Certain real estate investing strategies suggest certain types of financing. For example, most long-term buy-and-hold real estate investors purchasing non-owner-occupant properties will opt for 30-year fixed rate conventional financing or commercial loans. House hackers and NomadsTM will often seek out low or zero down VA, USDA, FHA, and conventional financing options.

However, sometimes the real estate investing strategy will lean toward utilizing hard money and private money loans. Some examples include utilizing the BRRRR strategy or doing fix-and-flips.

In this mini-class, James will go over the basics of hard money and private money loans.

Check out the video from this class here and access the downloads mentioned in the recording:

Hard Money and Private Money for Real Estate Investors - Video and Downloads

In this class, James discusses:

What is hard money? And, a deep dive into using it as a real estate investor.
The aspiration goal of becoming a hard money lender and two possible concerns
What is private money? And, a deep dive into using it as a real estate investor.
A warning about inadvertent ponzi schemes
A discussion about licensing required to raise private money and the license I got
Download a sample of my personal, 25-page Private Lender special report
Using a business card to raise private money (sample of mine)
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Fullerton real estate investor podcast? Book a free consultation to discuss.

Next Episode

Is it Better to Nomad™ or Buy Rentals All Cash?

Prices have gone up rapidly in the last few years. And, interest rates are much higher. And even though rents are up, they’re not up enough to counteract the much higher prices and much higher interest rates. That makes it harder to achieve good cash flow with a reasonable down payment.

One way to overcome the impact of higher interest rates is to not use loans to buy rental properties.

In this comparison mini-class James will compare the NomadTM real estate investing strategy to taking the significantly longer extra time to save up and buy rental properties for cash.

With the NomadTM strategy, James will have you put 5% down and buy an owner-occupant property that you live in for at least a year until you’ve saved up the next 5% down payment plus closing costs and reserves. Then, buy another 5% down payment owner-occupant property and move into the new property. Convert the previous property to a rental. Repeat this process until you’ve acquired 10 properties total—9 of them rental properties you purchased with 5% down payments.

When buying properties for cash, you’ll still buy your first property with 5% down payment and move in. But, after that, you’ll take the significantly longer time to save up 100% to buy a rental property all cash. And, free and clear properties without loans have much, much better cash flow than properties financing with 5% down. But, it takes a lot longer to save up to buy the first property. Keep saving until you buy up to 9 rentals all cash.

Which strategy will get you to financial independence fastest? Which will get you the highest net worth? Which is riskiest? We will analyze this comparison for 305 US cities.

Check out the video and interactive charts from this class here:

https://RealEstateFinancialPlanner.com/model/nomad-versus-1-oo-then-9-all-cash/

Or, see Fullerton specific, detailed analysis of a variety of strategies here:

https://RealEstateFinancialPlanner.com/model/CA/Fullerton/

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Fullerton real estate investor podcast? Book a free consultation to discuss.