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Do you know the different real estate investment loans? Learn more from Investor Loan Source, a top investment property lender offering loans nationwide.

Are you planning on investing in real estate? There are primarily two ways to do this, either with cash or with an investment loan. Not all real estate investors have cash on hand when starting out. Therefore, most will choose an investment loan product to fund their purchase. If you’re researching investor loans for the first time, here is a brief overview of what loans might be available to you.

Commercial Loans

These loans are available for purchase, refinance, and cash-out purposes. They are used by investors to purchase all kinds of commercial properties up to $10 mil, in most cases. Commercial loans are great for investors who qualify for traditional loans, but can also provide creative solutions for investors who need less traditional loan options. These loans are a good option for specialized land loans.

Hard Money Loans

Have you considered a conventional mortgage, but you didn’t want the typical duration that comes with a traditional mortgage product? Hard money loans work well for private real estate investors who need short-term loans. Short-term hard money loans require pay-off within 36 months, and they have generous credit score requirements. In fact, many hard money loans have no credit requirements at all. However, before going with this investment loan product, it’s important to know that the interest rates are quite a bit more to the tune of 10% more than traditional mortgage products.

Fix-and-Flip Loans

Investors who need to close fast and need private lenders for real estate investors might choose a fix-and-flip loan. These are investor loans that offer flexible solutions to fit your needs and help you make strategic purchases. Some of the advantages of these loans are they can cover up to 100% of the property purchase amount and 100% financing on rehab costs. Most fix-and-flip loans are available for single-family homes and 2-4-unit multi-family complexes. There are typically no loan minimums with a maximum loan amount of one million dollars.

FHA and VA Investment Loans

Not everyone is eligible for these investor real estate loans, but if you are, these loans are a great way to secure a rental property. FHA loan-funded properties do have strict occupancy requirements such as they must be owner-occupied the first year, and can only be rented out the following year. What makes these investments loans so attractive is their low down payments, making it easier for first-time investors to get into the market.

Rental Loans

If you don’t qualify for FHA and VA investment loans, a private rental loan is another option for investors. These loans offer the following benefits:

• Close in as little as 10 days
• Up to 75% LTV
• 100% LTC
• 5, 20, and 30-year loan options
• Ideal for non-owner-occupied residences
• 600 minimum credit score requirements
• Available for 2-4 multi-unit rentals and single-family properties
• Wrap-around loans

Novice investors often haven’t heard of this investment loan type, but it’s a great way to get a lower interest rate on an existing mortgage with a higher yield for the investor. Wrap-around loans are transactions where the lender assumes responsibility for an existing mortgage, allowing you – the investor- to sell a property on owner-finance terms while wrapping that note around the one you have with your lender. The process is often confusing to new investors, so it’s important to work with lenders who do these loans often.

If you’re looking for an investment property lender, contact Investor Loan Source today at https://ils.cash/ to learn more about available programs for seasoned and first-time investors.

At Investor Loan Source, we’re here to help you get the funds you need to invest in real estate. Rental properties can be an excellent source of income, and our real estate investor funding is a great way to get one or more rental properties under your belt so that you can begin collecting rent. But exactly how much should you be charging for rent anyways? This blog will help you learn how to calculate a fair rate for your rental property.

Why It’s Important to Know the FMR

The fair market rent (or FMR) is an essential piece of knowledge to have, whether you’re looking for a rental to buy, listing a vacant rental property, or adjusting your current rent charges. Ensuring that you’re charging a fair rate for rent will help you to fill your property quickly, help you keep good tenants for longer, and help you to calculate if a property is a good investment.

When listing a property, you want to ensure that the monthly rent you list is competitive. If your rent is too high, you’ll have a hard time filling the property, which means you’re left paying the expenses on a vacant property. If your rent is too low, you may fill the space quickly, but you’ll likely end up making very little on the property—if you make anything at all. The same applies to adjusting your current rent charges.

If you’re looking for a property to invest in, knowing the FMR for such a property can help you to calculate whether or not the property is a smart investment. If the FMR for that area is less than what it will cost you to run the property, it might be a good idea to invest somewhere else.

What Factors Will Impact FMR?

The FMR for any given property is impacted by many of the same factors that would impact the purchase price of the property. These include:

• How desirable the area is to live in
• Square footage
• Number of bedrooms and bathrooms
• The type of property (single-family home, townhome, apartment, etc.)
• Age of property
• Condition of property
• Any additional amenities that improve the property’s desirability

Now that you have a basic understanding of what will impact your property’s FMR, let’s get into how to calculate it.

How to Calculate FMR

The first and best step to take when trying to calculate FMR is to look at comparable properties in your area to see what other landlords are charging. You should aim to find at least three properties that are as similar as possible to your own, but the more comps you find, the more accurate your rental calculation will be.

When looking at comps, keep the factors listed above in mind. If the other properties you’re looking at have additional amenities that yours doesn’t—such as being recently updated—or if they have less square footage than yours, you’ll need to adjust your calculations accordingly.

If you’re looking to invest in rental properties, contact Investor Loan Source to get a real estate investment loan. We’ll help you get the funds you need to purchase rental properties that will be a smart investment for your future.

You’ve worked hard getting your fix and flip renovations done so you can get your investment property on the market. But before you begin showing your flip, there is one important step you may not want to skip that can maximize your return on investment – staging the home. Many studies show that not only does home staging decrease time on the market, but it can also encourage potential buyers to offer a higher purchase price. If you are worried that staging the home will be too expensive, check out these tips for staging your investment property on a budget.

Curb Appeal is Key

First impressions are everything. The world of real estate investing is no exception. From the moment they drive up to the property, potential homebuyers will already begin developing an opinion about the property. Good curb appeal is essential to making sure that their first opinion is a positive one. Make sure that the lawn is clean, mowed and free of clutter. An inexpensive way to add curb appeal can be as simple as giving the front door a fresh coat of paint. Adding a new doormat is a great way to welcome buyers and add to that first impression. Plant some fresh flowers in the flowerbeds to improving the landscaping and will give the yard a nice punch of color.

Tidy Up

Renovations and repairs often leave behind a lot of dust. Cleaning the property from top to bottom is essential. Thoroughly dust the home, clean the windows and wipe down all cabinets and baseboards. Consider power-washing the driveway, sidewalks and patio to leave the interior and exterior of the home sparkling clean. A little bit of elbow grease is a cheap way to get your flip ready to sell for top dollar.

Furnish Economically

Placing furniture in the home is an important aspect of home-staging, as it helps buyers get a good vision of the space and how their own furniture will fit in each room. Consider renting or leasing furniture to stay within budget. You may also find gently used furniture for great prices at secondhand stores or neighborhood garage sales.

Accessorize for Impact

While you purchased the property as investment, potential buyers are looking for a home to live in. They want to feel emotionally connected to their home. Help homebuyers feel more at home by adding some accessories throughout the rooms. Place a vase of flowers on the kitchen table to warm up the space. Adding rugs to hardwood floors, accent pillows on the couch and draping a soft throw blanket over a chair will make the spaces more inviting. Framed art on the walls and books in the built-ins are great ways to build character. Stay within budget by looking for decorative items at estate sales and resale shops.

Light Up the Space

Bringing in as much light as possible is an important way for buyers to see all of the hard work that you’ve done in the home. Whether it’s natural light or artificial light, a bright, well-lit spaces are essential to staging the home properly. Maximize the home’s natural light by cleaning the windows, dusting the blinds and opening all of the shades and  drapes. Turn on all lights and light fixtures in the home to avoid dark rooms. No potential homebuyer will enjoy having to fumble for light switches while looking at the property. Use table and floor lights to add to ambient lighting. Lighting is one step you will not want to skip.

Focus On Certain Rooms

Minimize your staging costs by focusing on the most important rooms in the home. Kitchens, family rooms and master bedrooms are usually the rooms that sell homes. It makes sense to spend the majority of your staging dollars on these rooms. Decorate the master bedroom gender neutral to appeal to the majority of buyers. Make sure that the room feels large by using a queen bed vs. a king-sized better in a smaller master bedroom. Consider swapping out kitchen hardware and purchasing stainless steel appliances to get top dollar in the kitchen. Updating the fireplace in the family room is a great way of updating the home and creating a focal point in the room.

Use Space Wisely

How you arrange the furniture can determine if a home feel spacious or cramped. Arrange furniture carefully to make the space feel larger. In small rooms consider pushing furniture up against the wall. In large rooms arrange furniture to create several conversation areas. Buyers also can be turned off by what they see as wasted space. A great way to minimize wasted space under the stairs is by creating a fun reading nook. Be careful to choose furniture that fits the space. In other words, don’t put oversized couches in a small family room. You also should avoid putting furniture in an area that would block the flow of traffic. Whatever you do to show off the space, use the space wisely so that buyers can envision themselves living there.

Keep It Simple

Have you ever heard that less is more? It’s true in the case of staging fix and flips. Don’t go overboard with accessories, artwork and furniture. Too many accessories will make the home feel cluttered. Be careful to keep it simple in terms of your color palette as well. You may love dark purple, but avoid painting walls in dark or bright colors. Consider sticking with a neutral palette to appeal to more buyers whenever possible. Artwork and flowers are ways to add color.

It may be tempting to skip staging the home when you are anxious to sell your fix and flip real estate investment property. But don’t skimp on the accessories and your staging efforts to save a few bucks. Staging the home has the potential to deliver a powerful return on your investment for every dollar you spend.

Do you need financing for your next house flip? Let Investor Loan Source help. We’d love to talk with you about your next real estate investment property.

Do you ever watch reality tv house flipping shows and dream about making a big profit in weeks?

Real estate investors that purchase homes in need of repairs and cosmetic work can earn huge returns in a relatively short period of time. It’s important to keep in mind that house flipping involves work and careful planning in order to be lucrative.

There are financial risks involved as well, but if you follow the key steps outlined in this article, flipping homes can be an excellent way to make money quickly.

What is House Flipping?
Flipping houses involves buying a property, renovating it and selling it for a profit. In order for a home to be considered a flip, it must be purchased with the intent of selling it in a short period of time.

Step 1: Know Your Market
Getting familiar with the real estate market in your area is critical to the success of your flip. It will help you recognize undervalued homes with profit potential and ensure you don’t overpay for a property. It will also help you determine the price you should be able to list the home when you sell it.

Step 2: Set a Budget
How much do you have to invest? How much money will you need to borrow? There are excellent private lenders out there willing to finance your next real estate deal. Do not assume not having enough cash resources will rule out a possible investment. Learn more about fix and flip loans here.

Make a list of repairs needed and get quotes from contractors while setting your budget plan to ensure you will be able to profit after selling the property.

Step 3: Line Up Your Financing
When you find an ideal property for flipping, you will need to be ready to act fast. Talk to lenders BEFORE you are ready to purchase the home to ensure you don’t miss out on opportunities. Investor Loan Source specializes in short-term fix and flip loans and are able to get you pre-approved quickly. Having your financing available before you discover your dream fix and flip property will help you beat out other investors looking in your market at investment properties. If you are already considering purchasing a real estate investment property, consider getting pre-approved today.  

Step 4: Establish Your Team
You need to start building relationships with contractors before you buy your first flip. Begin asking for quotes and estimates immediately after purchasing your property, or even better before.

Part of learning how to flip a house is building a strong network of contractors you trust and can depend on –  general contractors, electricians, roofers, plumbers, painters, HVAC experts. Get to know several lower-cost, well-rounded handymen as well.

Unless you plan on doing the work yourself, your team of contractors are essential to the success of your flipping business. It is helpful to ask for references and to contact them ahead of time to ensure you are hiring a trustworthy contractor.

Step 5: Locate and Identify Your Property
Learning how to find good deals is critical. That means not only buying below market value, but with wide enough margins to cover your expenses.

There are many strategies to find below-market deals on homes to flip. You could work with a realtor to find on-market deals, work with wholesalers to find off-market deals, build a direct mail marketing campaign and so on.

Part of finding a good deal as a home flipper is patience. It may be tempting to act quickly on a property that is not ideal, but if the numbers don’t work or if the repairs involve more work, time and money than what you are comfortable with, it is best to keep looking. Be ready to act quickly on properties that are ideal, but be ready to walk away from properties that simply aren’t good deals.

Step 6: Buy the Property
Got a contract accepted? Wonderful! Now consider hiring a home inspector. The home inspector will help you ensure the property is structurally sound and that the mechanical systems are in good working order. You don’t want any expensive, unpleasant surprises.

Contact your team of contractors for quotes. Choose a contractor and schedule them to start work on the same day you settle on the property if at all possible.

Step 7: Renovate
Get to work! Time is money, so the faster you can complete the renovation project, the faster you can sell the property and pay off your loan.

Step 8: Sell It!
The final step of flipping homes is usually the simplest – selling it! You can usually lean on a realtor, but ultimately, you’re the one responsible for pricing properly; your profits depend on it. Make sure you understand the fundamentals of real estate pricing, before buying your first investment property to flip.

Once you sell the property, you can celebrate and enjoy the financial rewards of being a successful house flipper!

The real estate business isn’t easy to deal with, especially if you’re new to the industry. You may have to double your efforts to keep up with veterans and larger players in the field. You can contact money lenders who can help you with financing a real estate investment. And, during the lockdown, it’s best to use the time you have to be more productive using these suggestions:

Refresh Your Mind and Establish Clear Goals

Spend a chunk of your time during the lockdown freshening up your mind and reminding yourself why you’re in the real estate business. Take this opportunity to establish your goals. Try to look 5 or 6 years ahead. Picture what you want to be doing by then. If you’re having a hard time thinking of a set of objectives, it can help if you ask yourself these questions:

• “How many properties do I want to acquire in the next few years?”
• “Do I settle for becoming a landlord, or do I venture into other opportunities the industry offers?”
• “How old do I have to be before I start planning for my retirement?”
• “Should I join investment groups and let them manage some of my rental properties?”
• “Will I get by if I acquire numerous rental property loans?”

Self-reflection sets up a clearer path for you. Once you have a better idea of what you’d like to achieve in the industry, you can devise several plans for how to realize them. If your Plan A doesn’t work, you can proceed with Plan B or C or even D and E. Multiple options will keep you from getting discouraged if you don’t succeed the first time.

Get Review Pointers From Current Clients

If you have some commercial and residential properties leased, phone some of your tenants. Start by asking them about their status during the lockdown. Once you’ve confirmed that it’s a good time for a long and fruitful talk, let them know why you called. Tell them that you want to get some review pointers that you can use to improve your services as a landlord.

It’s a win-win situation for both parties. You’ll primarily benefit by learning how the way you run your properties can affect your tenants. And, they’ll tell you if they have any grievances that you need to hear. It can be about damage in the unit or your management as a whole.

If you have more time, you can send your tenants a handwritten letter of appreciation. The goal isn’t just to acknowledge their review pointers but to thank them for the trust that they give you as their property manager. No matter how short, a simple expression of gratitude can make them feel less alone while they’re in quarantine.

Watch Documentaries, Read Books, and Join Online Groups

Another way to spend your time during the lockdown is to broaden your cultural knowledge. Go online to view industry-related documentaries. Watching them can offer something beyond temporary entertainment while you’re staying at home. They can also help you gain essential information about the field and understand past and current trends that affect the real estate trade.

It’s also a great idea to study books that can help you become a better investor. Search online recommendations and browse through reviews. Then, you can buy an electronic copy of the publication and read it while you’re at home.

You can also join online groups and forums. This lets you meet and converse with other industry players, both newbies and veterans. It’s a great idea to open a discussion thread by asking a situational question about something that can happen to any investor. Then, let other participants and members tell you what they would do if they found themselves in that position.

Are you encountering different issues as a newbie investor? Get in touch with Investor Loan Source today. They’re a company that can help you if you need hard money lending services or other financial solutions.

In the real estate industry, having skills in math is a must, especially when there’s profit involved. According to investment lenders, by estimating the potential cash flow, seasoned investors can tell if the multi-family rental property on the table is worth the time and money or not.

The good news is, you don’t have to be a math whiz to do it. All that’s needed are some simple equations to get a ballpark estimate of your potential profit. Once you have a better idea if the multi-family rental property you’re eyeing is worth it, that’s when you can perform your due diligence in researching and doing thorough analyses.

To help you out, here’s what you need to know about estimating the cash flow of a multi-family rental property.

Understanding the 50% Rule

One trick that expert investors use to get a quick ballpark estimate is the 50% rule. Here, always keep in mind that the expenses of a property are around half of its potential revenue.

While it’s true that in most cases the actual amount of the expenses can exceed more than half of the revenue, the rough estimate is still useful. For one, the figure will help you gauge if the property is overvalued or if it has the potential for profit. Also, you can use the number as the base for other computations.

Breaking Down the Cash Flow

To help you use the 50% rule, here’s a breakdown for cash flow in the simplest equation possible:

Total Income – Total Expenses = Cash Flow

What you’ll do is take the overall monthly rent amount as the income, then divide it in half and assume that’s your expenses. Subtract the expenses from the income and you’ll get the cash flow for that month.

Example

So, say the real estate is a 5-unit multi-family property where each tenant pays $800 in rent each month. By following the breakdown, the overall income would be $4000, which is 800 x 5 (rent multiplied by the number of tenants). And, by applying the 50% rule, you get $2000 for the expenses (overall income divided by 2).

At this point, you can add the mortgage of the property to have a more accurate estimate of your expenses. For simplicity’s sake, say you’re paying $1,300 in investment property loans. In the end, the total amount is $3,300 (expenses + mortgage).

Using the numbers from that example, here’s what you’ll get:

$4000 (income) – $3,300 (expenses + mortgage) = Cash Flow

$700 = Cash Flow

By following the 50% rule in ballpark estimation, you’ll have $700 for your monthly cash flow, or $8,400 annually from the property.

Expenses by the Numbers

To have a more realistic cash flow, you can adjust the value of the expenses where different factors are taken into account. Aside from the mortgage, here are what you should include in the equation:

• Insurance
• Home Owners Association Fees
• Taxes
• Maintenance and Upkeep
• Capital Expenditures
• Management Expenses
• Vacancies
• Marketing

For this part, since these factors can change depending on the situation, their actual figures are almost impossible to get. So, you’ll have to do your research and make a few phone calls to have a more accurate estimate of the expenses.

If you have experience in the industry and are familiar with the local market, you might already have a rough figure of some factors. But, if you’re new to this, the best thing to do is to talk with property managers, realtors, and other entrepreneurs in the business and ask for their advice. Contact Investor Loan Source to learn more about ballpark estimating and for assistance in investor real estate loans.