September, 2022 - Investor Loan Source

Three Tips to Simplify the Due Diligence Process

Due diligence is an integral part of any real estate investment. Performing due diligence ensures real estate investors know exactly what they’re in for with a property. Buying a property can be costly. The correct information is essential when making an important decision. In simple form, due diligence involves the examination of every aspect of a property that could affect its suitability or value. In this article, we share three tips that may help real estate investors during the due diligence process.

Do a Title Review

Title reviews are fundamental to the due diligence process. A title review is like a background check for a property. When an investor is considering acquiring a property, the title review process confirms the seller owns the property and provides an overview of all rights affecting such property. Investors should also get a preliminary title report on any foreclosure property they’re interested in buying and look for any secondary liens or tax liens. This may help investors know that there are no hidden liens or encumbrances on the property that could turn into unpleasant surprises later.

Inspect the Investment Property

Property inspections are an important part of the due diligence process. Real estate investors may have a licensed professional inspector examine the house for structural defects, water damage, or other significant problems. Pest inspections are also reasonably standard for termite damage. Electrical inspections are suggested for older properties that may need rewiring after many years. Lastly, plumbing inspections will check for sewer leaks and drainage issues.

Analyze the Location of the Property

The location can significantly affect the value and desirability of the property. As such, due diligence includes looking at the environment and location of a home. Real estate investors may get to know the areas they’re considering buying in. Driving around the neighborhoods, looking at other houses and people who live there, and talking to residents may also help to understand if property values are going up or down. It’s also a good idea to check out crime rates in areas looking to buy. These factors can significantly impact which markets to buy and which to avoid. These tasks are part of the due diligence, even before making an offer on a property.

Investor Loan Source, a private money lending company, provides high-quality investment property loans to private real estate investors at the lowest costs possible. Our process for providing real estate investors with private lending is unique. We place emphasis on the hard asset and value of the collateral (property) and less on the borrower. Our asset-based real estate investment loan model means we can provide more money lending to more investors than is available from standard bank loan models. At Investor Loan Source, providing real estate investors hard money loans is our business; it’s all we do. We offer several business real estate loans products designed to serve a variety of investors and property profiles, including private money lending for properties to sell on owner finance.

To learn more about Investor Loan Source, visit our website or follow us on LinkedIn, Facebook, and Twitter. To apply for a loan, click HERE.

The Power of Self-Discipline

Tom Berry, Co-Founder and CEO of Investor Loan Source, recently shared his thoughts on the power of self-discipline. He shares tips and stories to help real estate investors make better decisions when it comes to purchasing investment properties. Click the video below to view the entire presentation.

To learn more about Investor Loan Source, visit our website or follow us on LinkedIn, Facebook, and Twitter. To apply for a loan, click HERE.

Using a Contractor to Rehab a Flip

A knowledgeable contractor’s help can enormously help organize a flipping project and provide insight into what is possible with a property. A contractor may guide real estate investors with what type of changes they want to make and if they will be helpful or damaging. Additionally, a contractor will help investors oversee the home renovation project and keep the process moving. This is especially helpful if the house flip is a side job rather than a primary occupation. The contractor should also help real estate investors with financial planning. They should be able to tell how long the job will take, when the draws are needed, and how much the material and labor will cost the investor.

Furthermore, a contractor should also manage getting permits and inform how long the permitting process will take. They will also know what work can be done without permits and which jobs will require them.

Using a contractor will cost more money than doing the project themselves, but it will save real estate investors time and money throughout the project. While owning the property, investors will pay several monthly costs, including real estate taxes, utilities, insurance, and maintenance. On top of the monthly interest from the loan, these costs all add up to significant numbers that can be the difference between the project’s success or failure. A job completed correctly is less likely fail an inspection and incur fines. Hiring an organized contractor will keep the real estate project moving, effectively reducing costs over the project period.

Ultimately, investors can split the work with a contractor. They might be good at painting walls but not good at laying tile. Real estate investors might consider splitting the work with a contractor. Explain from the beginning what they can do and what they expect from the contractor. Real estate investor should make sure they have that in writing and spell out each party’s responsibilities clearly, so there are no misunderstandings.

To learn more about Investor Loan Source, visit our website or follow us on LinkedIn, Facebook, and Twitter. To apply for a loan, click HERE.

Evaluating a House to Flip

Finding house to flip can be difficult. But that doesn’t mean you should jump at the first opportunity you come across. An investor needs to know how to choose the right property. In this article, we will explain a three steps that may be used to evaluate a fix-and-flip project.

Evaluating a Home’s Interior

Walk into the space and look at the floors. Are there any stains or tears in the carpets? Will they need to be replaced? How are the walls? Are they damaged or in need of painting? Each of these problems can be an indication of water or structural damage. You should also investigate the kitchen. Are there any tears, stains, or cracks in the tile? Do the floors need to be replaced? Can the cabinets and countertops be salvaged, or is time to upgrade them?

Many real estate investors spend most of their budget in the kitchen. It may be the most expensive room in a house to remodel. If done right, the kitchen may also give you the most return for your buck.

Evaluating a Home’s Exterior

Excitement can sometimes lead you to overlook important details when evaluating your potential fix-and-flip deal. Take the time to inspect the entire exterior and yard thoroughly, even if the interior is in good shape. While inspecting the exterior, look for cracks and sagging windows or doors. These could be signs of settling in the foundation and could be the source of a significant and costly problem.

Evaluating a Home’s Mechanical Systems

You must always inspect the basic mechanical systems, including the heating, cooling, plumbing, and electrical systems. Some properties may also have swimming pools, fireplaces, and septic systems. Make sure to inspect all of them thoroughly. When possible, have professionals inspects the property’s mechanical systems. While it may cost you a few hundred dollars today, it may save you thousands down the road.

To learn more about Investor Loan Source, visit our website or follow us on LinkedIn, Facebook, and Twitter. To apply for a loan, click HERE.