Totally agree the refinancing (extracting cash / equity value) bit is the key to really unlocking the frameworks potential in our world, as there isn’t a mortgage instrument in play (aka a loan against your income, collateralized by the RE asset). One thing I’ve thought a lot about (though everyone knows most lenders, especially the SBA, don’t quite move at the speed required in our space) is using or diverting the free cash flow from asset #1 to cover the cash injection required for a loan on asset #2. In this way, you really only need the cash injection (typically ~20% of asset value) for the first deal. You then use a portion of those cash flows to finance asset #2 and on and on. Anyways, a few thoughts :)
Amazing piece of content, I was thinking the same about RE. Golden!
Appreciate you Vikas!!
What a piece of content! 💥
🙏
Totally agree the refinancing (extracting cash / equity value) bit is the key to really unlocking the frameworks potential in our world, as there isn’t a mortgage instrument in play (aka a loan against your income, collateralized by the RE asset). One thing I’ve thought a lot about (though everyone knows most lenders, especially the SBA, don’t quite move at the speed required in our space) is using or diverting the free cash flow from asset #1 to cover the cash injection required for a loan on asset #2. In this way, you really only need the cash injection (typically ~20% of asset value) for the first deal. You then use a portion of those cash flows to finance asset #2 and on and on. Anyways, a few thoughts :)
What you're describing is entirely possible because of the margins enabled by software. You have plenty leftover to service some debt. :)
Really great parallels between RE and SaaS. Started the opposite way with RE -> SaaS currently.
Curious about what Stripe products you're using that they offer you financing based on transactions? If you're willing to share, of course.
Thanks
Cheers Daniel! I’m referring to products with recurring + transactional fees.
Stripe sees all of that data and can crunch whether you are able to hold some debt so they happily provide you that option right from Stripe.
Not sure if one could reach out directly about it but probably!