Month: November 2022

Rehabbing a house is one of the most popular exit strategies in real estate investing. Real estate investors of all backgrounds and starting points have come to know the benefits of real estate rehabs. To start rehabbing houses, carefully lay out your goals and identify which rehab type best aligns with your situation. Learn the process before taking on your first project, and don’t be afraid to start small. In this article, we will go over some common problems buyers face when rehabbing a property.

1. Finding the right property

One of the biggest challenges real estate investors face when buying a property for rehab is finding the perfect real estate to invest in. A new investor will face several problems when starting, and lack of access to property listings is one such problem. When new to the market, you will most likely have no prior connections or networks in the real estate world, making it challenging to locate the best properties. Connect with renowned and verified real estate agents to learn about possible investment opportunities.

2. Inaccurately Calculating Project Costs

Poor estimations are typically the result of a lack of preparation and education. Investors are advised to conduct their due diligence to mitigate any risk of performing a wrong estimation. Impatient investors often need to accurately calculate repair costs before bidding on a house. Inaccurate repair costs may impact any ROI you hope to attain. As a rule of thumb, expect repairs to cost more and take longer than anticipated. It is essential to understand how much time and money you will need. 

3. Failing to maintain the property after the rehab

You have completed your rehab and are ready to sell it. All your hard work is about to pay off. However, it is not the time to let your guard down. There is still work to be done. Sometimes an adequately rehabbed property won’t last more than a couple of hours on the market. However, there is still a possibility of the home staying on the market for longer than expected. In this scenario, many investors make a common mistake- neglecting to maintain the property while it is up for sale. Over time, even the most excellent properties can begin to look uninviting. Maintaining curb appeal is just as important as creating it.

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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 with hard money loans is our business; it’s all we do. We offer several business real estate loan 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.

Fixing and flipping houses is a fascinating business. By establishing this new venture, you may be able to substantially increase your income-not to mention you’ll also develop investments that will allow you to reach financial freedom. By following this fix and flip guide, you may be able to engage in more effective investments.

1. Understand the Local Market

Knowing your local real estate market’s trends can help you make projections on its current state and how it will change. The market will give great insights into what features are worth improving on your investment property.

You will also know the market forces impacting your property and how they affect your business. Consider attending real estate seminars and networking with other investors to access reliable projections on what will likely happen in the property market.

2. Understand the Fix and Flip Process

• Being a flipper is about more than finding cheap properties and selling them for a profit later. It’s also about doing the necessary repairs on the property, finding contractors to help you with these repairs, and managing those contractors.

• Some investors may hire general contractors to fix the property, but others decide to do all the work themselves. Consider finding a business partner who knows the best methods for performing DIY renovations. You may find ways to save money on renovation supplies and other costs that come with house flipping.

• Find someone to help you manage the business at its early stage. The best option would be to find an experienced real estate professional who can help manage and maintain the property until you can sell it for a profit.

3. Have a Business Plan and Budget

Before spending money on the property:

• Prepare a detailed business plan.
• Make sure your plan is realistic and possible to achieve.
• Don’t make assumptions about the cost of repairs and other expenses.
• Take several quotes from real estate agents about similar properties in your area and use them to benchmark for future estimates.

Additionally, it would help if you listed all costs, including maintenance, taxes, and insurance payments. Once you have everything on paper, compare your income and see if you can make monthly payments without jeopardizing your financial situation.

4. Get a Private Money Loan

Once you’ve identified your property, have a business plan, and know your budget, it’s time to get the financing needed to complete the project. A private money loan may be the perfect financing option for fix and flip properties. The fix and flip loans usually come with the fastest turnaround time, and the money you get is pooled from private investors (not Wall St. or large banks).

Bottom Line

The decision to fix and flip a house can be an excellent opportunity for anyone looking to venture into real estate. Always understand that you may go up against other investors with more experience and capital as a beginner. However, it pays to heed the wisdom of experienced pros who may point you in the right direction when you need help. Finally, remember that there are benefits and risks in any investment. Always do your due diligence and take the time to learn from other investors who have been there before you. Don’t give up when you encounter problems in your first real estate deal; instead, learn from your mistakes and move on.

Disclaimer: The information provided is not investment, tax, financial or legal advice. Consult with a licensed professional.

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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 loan 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.