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Questions Investors Should Ask Prospective Lenders

Hard money lending is a quick and easy financing solution to fund real estate investments, such as rental properties, rehab financing, fix and flips and even commercial bridge loans. Finding the right lender to meet your unique needs is not always easy. Here are some questions to ask when determining the right lender for you and your investment business.

1. How long will it take you to fund my loan after my application is complete?

Without a doubt, time is money in the real estate investment business. Hard money lenders should be able to approve and fund a hard money loan within 2 weeks. Sometimes lenders can fund deals within 3-5 days. It’s important to note here that it’s critical that you must have all the required documents and items in for your application to be complete. Lenders can get you funded more quickly if you stay on top of completing your application. It also can be helpful to use the same lender for multiple deals, especially if they offer technology and resources like a user loan portal to make the loan process more efficient for investors.

2. Will you provide a pre-approval letter I can use to submit with my offers?

Finding good deals for fix and flip properties is already tough and competitive. Buyers who don’t already have a property under contract and intend to begin making offers soon will have a greater chance of having their offers accepted if they also submit a pre-approval from an experienced hard money lender. It’s important to ask your potential lender if they provide pre-approval letters so you don’t miss out on a good property.

3. Will I work with someone who is knowledgeable about my business and projects?

Not all lenders have experience and knowledge in the game of real estate investing. Choosing a lender that has first-hand experience in the business of flipping homes and investing in real estate is a game changer. Investor Loan Source was created by real estate investors who know your unique needs and understand the market.

4. Do you offer loan extensions?

It’s important to understand if an extension would be available for your loan due to unforeseen circumstances. Establishing this with a lender before you need an extension can be less costly than needing to ask for one once you’ve taken out the loan.

5. Will there be a prepayment penalty if I pay my loan off before the full term is up?

It’s common for many lenders to have a small prepayment penalty when a minimum amount of interest must be paid on the loan. In many situations the prepayment penalty will not affect the borrower in any way. Find out if there are any pre-payment penalties and make sure it works for your proposed timeline.

6. What loan to value of the after repair value are you able to offer?

Hard money lenders loan out based on the after repair value (ARV) of the asset. The loan to value ratio (LTV) of the (ARV) is the loan amount the lender will allow based on the fixed up value of the property. This ratio can vary from lender to lender. The LTV/ARV percentage will also vary based on the property type and age. It’s essential that you find out the answer to this question early in the game to avoid big road blocks and ultimately having to find a different lender or rule out a property.

7. Do you work with customers with imperfect credit?

Many investors worry that they will not be able to qualify for a loan if they don’t have a high credit score. Hard money lenders usually lend based on the project and property itself vs. the buyers creditworthiness. They are a great resource for buyers who have had some hiccups in their credit history. It’s important for you to ask if they have a minimum credit score in the very beginning. Your rate and points charged may be effected some, but oftentimes hard money lenders will not turn you down based on your credit score alone.

8. Do you have any references?

A good, reliable hard money lender will be able to offer references from investors who have borrowed from them in the past. If the lender is unable to provide any positive references, they may not be the right lender for you.

9. What are your interest rates and how many points do you charge?

Points and interest rates vary across regions and by lender. The type of loan is an important determining factor. For instance, fix and flip loan interest rates are often higher than rates for purchasing a rental property to buy and hold. The riskiness of the project also affects the interest rate. In general, hard money loan rates are higher than traditional mortgage loans due to the risk involved. In both traditional loans and hard money loans, interest rates and points charged vary based on a borrowers credit history.

10. What loan products do you offer?

Many investors have different types of properties in their real estate investment portfolio. It’s essential to find a lender that has unique products to fit your unique needs. At Investor Loan Source, we offer a wide variety of loans – fix and flip, rental, wrapable, one-time close fix to rent and commercial loans to help grow your business.

In order to be successful in investing it’s important to find the lender that is right for you and your business. If you’d like to learn more about Investor Loan Source or our products, visit www.ils.cash, call us at 409-735-6267, or reach us via email at [email protected].

Investor Loan Source, a hard 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 hard 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.

ARV: What It Means and Why It’s Important

In real estate ARV is short for after repair value, or the estimate of a property’s value after all repairs and upgrades are completed. For real estate investors, especially those who flip houses, this number is important because it calculates the margin between the “as-is” value of the desired investment property and the value of a developed property that has been completely renovated.

ARV = Property’s Current Value + Value of Renovations

It is the basis of the property’s selling price, comprising the purchase price plus the total cost of repairs. The key to the profitability of property flipping is that repairs more than pay for themselves.

The after repair value will help you plan your strategy and also help determine which real estate financing choice is best. The ARV can provide investors a pretty good picture of what they can sell an investment property for.

In order for the ARV to be accurate, the investor will need to be able to get accurate repair estimates and insight into the local market. Seasoned investors that have been flipping homes for years can usually walk into a property and assign a value based on their knowledge and experience quickly. For newer investors, this will not be the case and it will take a good bit of time.

The ARV is a calculation of a snapshot in time – the value of the property under the current housing market conditions and the home’s state of repair at the time of calculation. This value can change daily throughout the renovation cycle of a home.

What Is the 70% Rule?

Maximum Purchase Target = (ARV x 70%) – Estimated Repairs

This rule is popular for real estate investors. It tells you the maximum you should spend on a flip property. However, it is only a general guidance and you should not consider it an ironclad rule.

After Repair Value (ARV) Limitations

The housing market can change, causing comparable home values to go up or down. Renovation costs can also vary and there may be hidden damage in the property.

In addition, an appraiser might value properties differently than a realtor or investor. Lenders use appraisals, which could lead to a lower pre-repair property value. Flippers must be good negotiators when they buy a distressed property and then sell it after repairs. A flipper good at estimating repairs but poor at negotiations may not receive the property’s ARV at sale time.

Need Help Assessing Your Potential Property?

Investor Loan Source is not your everyday lender – we were created by real estate experts who know the markets and typical renovation costs well. If you need help assessing a property and determining if it is “a good deal,” or not, please reach out to us. We are committed to helping investors grow their wealth through real estate. Need a loan? We have a wide variety of products for your fix and flip and rental properties, as well as commercial and wrapable loans.

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.

New Year’s Resolutions for Real Estate Investors

A new year is the perfect time to reflect on the past year and celebrate your achievements, identify areas with room for improvement, learn from the setbacks and move forward. It’s also the perfect time to set new goals and come up with attainable resolutions both personally and professionally. For real estate investors looking to grow their business and achieve financial success, setting new, tangible goals is imperative.

For many of us, 2020 seemed to drag on due to COVID scares and shut-downs. It came with many speed-bumps, hurdles and other uncertainties and discouraging events. Ready for 2021? We all are. Here are some useful resolution ideas to help this year be a more lucrative one for your real estate investment business.

Work to Increase Your Return on Investment

For new real estate investors, this means staying focused on finding opportunities with low risk and high profit. Looking at your expenditures, monthly and yearly costs to see if there are areas you could save money is critical for both seasoned and newer investors. One easy step is to ensure you aren’t overpaying for utility services. Another is to review rental rates on a regular basis to be sure you are charging rent consistent with the local market. Smart investors will also learn how to efficiently schedule contractors, pre-apply for permits, pre-order supplies and aggressively price and market their properties for quick sale. Each day saved equates to less money towed to your lender in interest. Evaluating the cash coming in and the amount of cash going out regularly will help you identify ways to increase your return on investment.

Mix Up Your Strategy to Find New Properties

Using MLS may be easy, but it won’t usually allow you to get ahead of your competition in finding hot investment properties first. Consider hitting the streets in your car to find for sale by owner signs this year. Focus on networking and growing your contact list. Be sure to include realtors, investors and contractors. A good contact list may help you learn about new foreclosures and opportunities before anyone else.

Improve Your Time Management

Improving your time management can help you both personally and professionally. Consider waking up an hour earlier each day and setting that time aside to answer emails and planning your daily list of items to get done that day. Stay focused on accomplishing that to-do list before you get sidetracked. You may find that you get more done in the day if you plan it out carefully. For those that simply don’t time for the more mundane tasks of answering emails and making phone calls, think about hiring a virtual assistant to help free up your time for tasks that could be used for making investment deals.

Improve Your Marketing Strategies

Thoroughly planned marketing improvements will generally lead to a more profitable investment business. If you are not on the social media bandwagon, hop on in 2021! If you already have a social media presence, set a goal of increasing your followers by 10% this year. Streamlining your websites, direct mail and mass email can all also help you grow your business.

Refine Your Investment Portfolio

Last year you may have found your niche. Now is the time evaluate your portfolio and identify properties that just don’t fit anymore. Or maybe you’d like to diversify your portfolio and invest in single family notes. Look over your portfolio and plan how you want your portfolio to grow this year. Decide which markets you’d like to explore. Carefully planning your strategy and talking with your investment advisor will help you refine your portfolio successfully.

Learn Something New

Personal growth can be achieved through learning something new and expanding your knowledge. Interested in learning more about commercial real estate investing? Join an in-person or online group or attend webinars. Take a course or read a book about something you’ve always wanted to learn. The possibilities are endless. Hopefully you’ll enjoy the process as well.

Improve Yourself

Need to drop 10 or 20 pounds? Want to exercise more? Stay committed by joining a health club, or sharing the goal with a friend or fitness group. Stay more organized this year by using a planner, app on your phone or cleaning out your office. Communicating proactively and more often is also a great resolution that will also help you as an investor. Improving yourself can reduce your stress level and lead to a more positive 2021. Decide what areas of your life are bringing you down or need the most improvement and focus on that. You will thank yourself later.

Most resolutions are easy to set and harder to keep. The key is making small improvements each day. Whatever went wrong in 2020, learn from that and move on. Don’t let the past hold you down. You have a cleaner slate and a fresh opportunity to build a better real estate investment business and ultimately a better you. Ready to dominate in 2021?

Having a great lender to partner with you in 2021 is essential. Let Investor Loan Source help you by walking you through our loan products. Contact us at 409-735-6267 if you have questions or email our loan specialists at [email protected] for more information.

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.

Hard Money Loans Made Easy

There are many financing options for real estate investors available today. One of the most popular options has become the hard money loan. A hard money loan is a loan collateralized by a hard asset (in most cases this would be real estate). One of the biggest differences between a hard money loan and a conventional loan is that hard money lenders use the value of the property versus the borrower’s creditworthiness to determine the loan.

Hard money loans tend to have terms of 12 months, but some can be extended to as long as two to five years. This works in favor of investors who plan to purchase a home in need of repairs, rehab it and sell it quickly for a profit

Advantages of Hard Money Loans

One of the biggest advantages is that there are less restrictions with hard money loans when comparing them to traditional loans. Lenders rely less on a borrower’s credit score and more on the value of the property itself. This allows borrowers with a less then perfect credit score to obtain a loan.

Another key benefit of hard money loans is that they can be acquired quickly. Loans from banks and traditional lenders often take up to 60 days to issue, while hard money loans can often fund in a week. This is especially important if investors hope to acquire properties with competing bids. Time is money in real estate and time is on your side with hard money.

Hard money loans also provide tremendous leverage for fix and flip and buy and hold investors. The investor can enter a project without putting their own money at risk and remaining liquidity. This is a huge reason real estate investors seek out hard money lenders in Florida.

An Easy Decision for Investors

Although many investors with imperfect credit scores find hard money loans easier to qualify for, because of the higher risk involved these loans often come with higher interest rates. Despite this, they are an integral part of the the real estate investing process and can be utilized when a traditional loan doesn’t make sense or is too difficult to get.

Hard money loans aren’t just for flippers. At Investor Loan Source, we offer loans for rental properties, as well as commercial investment projects. Be sure to ask one of our loan specialists about our exclusive wrapable loans, commercial and one-time close fix and rent options. We make hard money easy – the application process is fast and simple. Contact us at 833-457-2274, email us or apply online today.

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.

Advantages of Investing in Rental Properties

There is no doubt that when done right, investing in real estate can be very lucrative. Whether you invest in fix and flip properties, notes, commercial or rental properties, the payoff can be huge. There are many advantages of investing in rental homes you should know about if you are considering becoming a landlord.

Leverage

One important benefit to consider is leverage. You can use a small amount of your own money while borrowing and the rest. When investing in real estate, you don’t have to pay the full amount for the property. Instead, you are able to put a down payment (sometimes even as low as 0%) of your own money and get a loan from a bank, private lender or a hard money lender to fund the remaining. While you only put a small percentage of your own money down on the property, you are able to fully control the property and benefit from 100% of the appreciation.

Cash Flow

Any money left after paying your monthly expenses is money in your pocket. Buy smart and you can generate a monthly income from your tenants in the form of rent above and beyond what it costs to own the property. This is cash in your pocket that you can enjoy for as long as you own and rent out your property.

Appreciation

Over time rental properties tend to appreciate in value, which means while you are collecting money in the form of rent you can sit back and watch the value go up. You are able to profit from the passive income while paying off the mortgage, then later sell the property for a higher price and profit from it again. Score!

Tax Benefits

There are many tax advantages of investing in rental properties. If you receive a rental income from the rental there are numerous rental expenses you may deduct on your tax return. Expenses may include mortgage interest, property tax, operating expenses, depreciation and repair. There are quite a few tax benefits – be sure to consult with your tax professional to ensure you understand all tax implications prior to investing in real estate.

Security and Control

Another important benefit of rental property investments is that you are in control of what property to invest in, where it is located, who to rent to and what to charge for rent. You have very little control when investing in the stock market and many other investments. Investing in real estate is also considered one of the most secure investments you can make. Compared to the volatility of the stock market, real estate markets tend to be very stable. It is important to keep this in mind when choosing between investing in real estate versus stock.

Ready to purchase a rental property and need help with funding? Investor Loan Source has buy and hold loans that can help you grow your investment portfolio. Apply now or contact us at 409-735-6267 to get started and begin reaping the benefits that come with owning a rental property.

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.

House Flipping 101

Whether you’re looking for a new career or just a way to make money on the side, flipping houses can be profitable and rewarding if done right. In 2019 approximately 245,864 homes were flipped in the United States. The median gross flipping profit on home flips in the fourth quarter of 2019 was $62,500. Sounds like a great way to make money, right? You’ve seen it on tv shows, but there is more to learn and understand.

What exactly is house flipping?

Flipping houses is when an investor purchases a property with the intention of fixing it up and quickly reselling it. Most homebuyers want a move-in ready home, so flippers often buy properties that most buyers aren’t able or willing to renovate. The key is finding the right property and flipping it fast.

It can also refer to purchasing and reselling properties in a market where home values are on the rise. In this case, a real estate investor may spot a foreclosure or low-priced home, purchase it and wait a few months until home prices increase. They will then re-list it at a higher price and sell it for a profit.

Ready to get started? Read on to learn about the important steps to take when starting out.

1. Research a range of markets.

How much money will you have to work with? $20,000 will not help you invest in areas with an average sales price of $800,000. Your budget will help you narrow your options. If your hometown is outrageously expensive, consider investing in areas further away, especially ones with rising home prices and strong demand.

2. Set a budget and a business plan.

Every good entrepreneur needs a plan. What amount are you comfortable investing? How big of a renovation project are you up for? All of these things need to be considered when making your plan.

3. Line up your financing BEFORE you need it.

The best deals out there will be snatched up quickly. Make sure you are already pre-approved and have a lender lined up who can finance your deal before you look at properties. You don’t want to miss out on a hot property with huge profit potential. Investor Loan Source can help you with a fix and flip loan. Visit us online to learn more or better yet, apply online today!

4. Build your network of contractors.

It is important to have a team of contractors that you can depend on. You will likely need general contractors, electricians, roofers, plumbers, painters, HVAC experts and well-rounded handymen at some point while flipping houses. Begin building your network ahead of time to avoid stress and delays – time is money in this business.

5. Find a house to flip.

One of the most important aspects of flipping houses is being able to find good deals. It is important to find homes that are not only priced below value, but with wide enough margins to cover your many expenses. For help finding on-market deals you can work with a realtor. For help finding off-market deals you may want to consider working with wholesalers or beginning a direct mail campaign. Patience is often key when finding houses to flip.

6. Buy the house.

As soon as your contract is accepted, you will want to hire a home inspector to ensure the home is structurally sound and the mechanical systems are in good working order. A thorough home inspection will likely take several hours and is critical in ensuring the home will not come with expensive surprises. After the inspection, walk the home with your chosen contractors so you can properly prepare for the next important step.

7. Renovate the property.

Every month that goes by comes with interest and carrying costs – utilities, taxes, insurance and other expenses. The faster you can complete renovations, the faster you can sell it! Be sure to make repairs and upgrades to the home that will add value to the property. Don’t overdo it. Adding high-end, expensive countertops to an $80,000 property is probably not necessary and could eat away your profits. Stick to your budget and timeline.

8. Sell it!

This step is often the easiest if you’ve made the right renovations and priced the home correctly. It’s also the funnest as it entails reaping the profits of your hard work and planning!

Learning how to flip houses can be overwhelming. Lean on experts – your lender, contractors, home inspectors and realtors. Network with other house flippers. Most experienced house flippers have learned from their mistakes and will be happy to share tips on what to do and what to avoid when investing in homes in need of repairs. Building a strong network and planning ahead will help you set yourself up for success.

Need a fix and flip loan for your investment property? Contact Investor Loan Source at 409-735-6267 or visit our website and get pre-approved today!

Different Types of Investment Loans for Real Estate Property

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.

Determining Fair Market Rent for Your Rental Property

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.

Home Staging Tips for Fix and Flip Properties

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.

Money Maker or Money Pit?

Red Flags to Look for Before Buying Your Next Fix and Flip Property

For fix and flip real estate investors, there’s nothing better than finding that perfect “diamond in the rough” property. It’s like a dream come true. It’s in the perfect location at the right price, but is what we like to call “an ugly duckling.” It has an overgrown lawn, outdated light fixtures, horrible paint colors and lots of small cosmetic items that scare off most buyers. It is by far the ugliest home on the block. With a fresh coat of paint, a little bit of work and some new light fixtures this house could generate some big profits. It may be tempting to make your move right away, but before you do, be sure to do your due diligence. Look for these red flags that could turn your next real estate investment flip into a big flop.

1. Too Long On The Market

If the home has been sitting for too many months (or even years) on MLS, this could be a sign that something is wrong with the property. Be especially cautious if it is showing pending sales that fell through. This could indicate that previous homebuyers or real estate investors noticed serious problems with the home during inspections.

2. Foundation Problems

Major foundation issues can scare off potential buyers and cost thousands of dollars to repair. Look for cracks in the bricks, walls, flooring, foundation, sidewalk and driveway, as they could indicate some foundation problems. Uneven floors are also tale-tell signs that the home might require foundation repair.

3. Sewage and Draining Issues

Sewage and drainage problems can quickly turn into a bad situation for flippers. Drive by the house after a rain before buying the home. If you see puddles of standing water, the yard may have a drainage issue. Puddles near the foundation are especially concerning. Standing water in the yard and heaved walkways may also be signs of a blockage or break in the underground sewer line.

4. Roof Damage

Replacing a roof is expensive. A new roof can cost anywhere between $6,000 to $20,000 or more depending on the size of the roof and type of roofing materials. It pays to check out the roof carefully. Shingles that curl up at the corners, missing shingles, cracked shingles and exposed nail heads are all signs that the roof may need to be replaced.

5. Mold

Moisture leads to mold, which is the bane of every homeowner and real estate investor. Not only can it cause health issues and respiratory problems, but It can be costly to remove. Some mold growth is obvious, but it can also be lurking out of site and be more difficult to detect. When checking for mold in the home, look for water stains on the ceiling, walls and floors – including in the attic and basement. Dark, fuzzy stains and musty smells can indicate there might be a mold problem in the home and should not be ignored when inspecting the home and estimating repair costs. There’s a chance of it returning if the initial work wasn’t done right. Mold elimination should also include fixing the water source.

For many real estate investors, flipping homes can be an enjoyable experience. It can also be very lucrative. Keep in mind that due diligence is one of the most important things to master when it comes to real estate investing. There are hidden costs you need to take into consideration when deciding if a home is a good investment. Some repair costs are manageable, while others may exceed your budget. The next time you are looking at investing in a fix and flip property, be aware of the red flags that can help you distinguish the money makers from the money pits.

Ready to purchase your next fix and flip property? Investor Loan Source, a private lender based out of Texas, is here to help. Visit ILS.cash to learn more or apply now to get started.