Nate Armstrong is a Milwaukee-based entrepreneur and the co-founder of Home Invest. He is also the Investor Relations Chair for the company. Prior to establishing his own brand, he was a full-time real estate professional who operated in multiple states. This experience helped him attain many important skills that a successful businessman must have.
Now he works with students from all over the nation in order to transfer those skills. So far, Nate Armstrong of Home Invest has helped more than 800 people through his coaching. His other notable experience involves a management role with Target that he held for many years. Outside of his real estate ventures, he often spends time with his family.
Most recently, the co-founders of Home Invest, Nate Armstrong and Dragan Berger, have launched their scholarship initiative. Together, they hope to help post-secondary students with their pursuit of higher education.
How much financial involvement is necessary in order to establish a real estate career?
Well, real estate is a field that revolves around up-front capital and financing options. People who want to become real estate investors must be willing to spend money before they make any. You should be ready to give away some of your wealth in order to increase it. This, of course, can be done in reasonable increments. You don’t have to jump in headfirst and shoot for a large return. Instead, you can build your way up by starting small and increasing the inputs slowly.
A general rule of thumb is to start with a single, low-unit property. That way it won’t be as time consuming and you can learn the basics. From there, the skills you learn will be transferable to larger projects. Not to mention it’s much more bearable to make mistakes on small commitments rather than enormous ventures.
What are some financing options available to investors who work in real estate?
The most common financing options usually go back to traditional lending and portfolio-based loans. Traditional lending would be like a mortgage sold on the secondary market. Portfolio lenders hold their portfolio of loans in-house instead of passing them on to the secondary market. Although both of them have advantages, I personally prefer portfolio loans as they can be more flexible.
What are some advantages of portfolio loans?
In most situations, obtaining a portfolio loan will be easier. First, however, you must recognize the difference between a typical mortgage and this form of lending. Mortgages are issued by banks and are often sold in the secondary market so the banks can increase their revenues. In order to sell them, however, these loans must satisfy a series of strict rules.
For portfolio loans, there is no secondary market involved since the original lender assumes all the risk. Therefore, they don’t have to satisfy specific requirements about the borrower’s credit, assets, employment history, and so on. In fact, a portfolio loan can be issued based on completely different factors and inputs than any other loan. For real estate investors, this creates an opportunity to get funds regardless of their credit history or debt to income ratio.
Is it possible to be a real estate investor without a third-party supporter like a bank?
Well, almost anything is possible. A lot of investors spend decades working full-time jobs in other fields and saving money. Once they save enough capital, they make an aggressive transition into the real estate sphere. This, however, is certainly not the easiest way to go because it takes quite some time to save enough money to invest in real estate. Additionally, using banks allows people to work with professionals who have experience in the field.
What are some common mistakes that people make when obtaining loans for real estate ventures?
I think the most common mistake revolves around borrowing too much. Although portfolio loans or mortgages work on a principle of repayment, not every project will be profitable. Getting a loan for $100,000 and not making a solid return puts you in a delicate situation. To avoid this, people should start slowly. Meaning, their loans should not go above the monetary value that they can repay relatively fast.
Other frequent low-level mistakes include a lack of research, understanding, and awareness. For instance, you wouldn’t believe how many people settle for the very first loan they’re offered. Additionally, many of them may not even understand how lending works. The last group includes people who don’t follow current events. Think back to 2008 and the state of lending that led to a downturn in the economy. People need to pay attention to what’s going on so they can adjust their investment strategies accordingly.