fix and flip - Investor Loan Source

2022 Economic Update

Tom Berry, Co-Founder and CEO of Investor Loan Source, recently shared valuable information at the Wealth Club’s March Meeting. He shared his thoughts on what to expect with the recent changes in our economy and how those changes may affect real estate investors. Click the video below to view the entire presentation.

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.

How to Choose the Right Real Estate Investment Loan

Most successful real estate investors understand that it takes time to achieve a return on their investments. The world of real estate can be filled with many unexpected twists and turns. However, choosing the right real estate investment loan may improve the possibility of great profits. Patience is key when building a lucrative portfolio. Keep reading to learn how common mistakes can be avoided to achieve long-term success.

Be Sure to Run the Numbers

Before applying for a real estate loan, run the numbers to determine your profit margin. It is important to understand how much is needed to put into the property. For example, the property may stay on the market longer than anticipated. This could lead to a delay in paying off the loan. Many first-time investors may lose money on their investment because they didn’t prepare ahead of time. This could be avoided if an investor plans for this type of situation.

Have Enough Cash Reserves

Unforeseen expenses such as unplanned vacancies, make-ready costs, damages and maintenance are just a few of the unexpected costs to consider when investing in real estate. Ensuring that you have sufficient funds set aside for each property to cover these costs is one factor in being successful.

Research Your Lending Options

Many first-time real estate investors start their search for funding by applying for a loan from their bank or a traditional mortgage company. They may soon discover that the process may not be as easy as anticipated. Conventional lenders may view investment property real estate transactions as risky and there might be significant requirements in addition to a large down payment.

Private money lenders, like Investor Loan Source, understand real estate investing. Therefore, the funding may be quicker, and the rate of approval may be higher.

Closing Thoughts

Real estate investing offers the opportunity for sustainable growth and financial freedom. Starting small and starting with the right information could set you up for long-term success. A little research and planning can go a long way when working to achieve your real estate investment goals.

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

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.

How to Flip a House

House flipping sounds like an easy and straightforward concept. But there is much more to finding a cheap house, purchasing it, and selling it for a profit. If it were that easy, the market would be over-saturated with house flipping real estate investors. A great deal of work goes into successfully flipping houses. Here are a few tips to consider before getting started.

Research Your Local Real Estate Market

Before purchasing a property to flip, it is important to know if your property is in an area where people want to live. Is it in an up-and-coming neighborhood? Is it in an area where people want to live? Thinking about these factors could determine your success or failure. No fix and flip investor wants the burden of a property that doesn’t sell. The objective is to flip quickly and understanding the market is an important factor in making sure that happens.

Examine Your Options for Financing

After researching the market and finding a property, now it is time to finance the deal. There are many ways to finance a real estate project. If an investor has enough cash on hand, they may fund the deal themselves. Leveraging may be an option for an investor that has equity in a property that they already own. Additionally, a hard money loan can be a great option for someone who wishes to fix and flip a property.

Know the Cost

Depending on the property, the cost to repair a home for reselling can rise very quickly. One key factor to success can be knowing what repairs and improvements will add value to the property. Landscaping, upgrading appliances, and painting the exterior are just a few things to consider when preparing a fix and flip for reselling. Many real estate investors save money by making small repairs themselves while others prefer to hire contractors to do the work. Regardless of how the improvements are made, it is imperative that the work adds value.

Final Thoughts

Flipping houses does not come without risks. However, when informed decisions are made, the return on investment can be rewarding. Always perform due diligence and consult financial and legal professionals for sound advice.

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

Questions Every Real Estate Investor Must Ask Themselves!

When Socrates said, “Know thyself,” it is unlikely he was talking about real estate investing, but it is still good advice. Before considering any major investment, you need to make sure you know what you can or can’t do, what your goals are, and what you are comfortable with. Here are some questions to ask yourself, so you are prepared to seize a good investment opportunity when it presents itself.

Am I an Accredited Investor? Knowing your status is non-negotiable. Some investments are only available to accredited investors and knowing your status will help you to narrow your focus. An Accredited Investor is generally someone who has 1MM in net worth, not counting the value of their primary home.

Am I a conservative or aggressive investor? Do you like to play it safe with a lower steady fixed rate of return or are you someone who likes high risk, high reward situations? Risk tolerance, considering where you are in life, knowledge of the industry and the market cycle, should all play a part in this decision.

What type of investor am I, Passive or Active? Are you a hands-on type of investor who wants to be uber involved in your investments? If so, you may want to consider more active investments such as fix and flips, rentals, note buying, etc. Just remember that these types of investments take a lot of time and involvement.

If you are working full time or just starting out, something passive may be your best bet! Consider real estate investment funds and other low involvement opportunities.

What is my level of knowledge when it comes to RE investing?

Are you just starting out? Then you probably shouldn’t take on a 100K intensive rehab project for your first flip. No matter your investment decision, take time to learn and fully understand what you are doing.

Who is in my network that I can leverage for their talents/expertise?

We have all heard the quote “Your network is your net worth.” — Porter Gale. This is especially true in the real estate world. This industry is constantly evolving and having a strong network is a must. Every RE investor should have a good agent, lender, attorney, CPA, and contractor on their side with whom they can ask questions and brainstorm. Go to real estate club meetings, mixers, and conferences. Get to know people and surround yourself with like-minded individuals. Lean on the strength of others to compensate for your areas of weakness (we all have them) and you, too, can contribute your strengths to help others.

What type of funds am I using to fuel this investment? Analyze the effects of that choice.

There are many ways to fund your investments but sometimes that can come with certain restrictions, tax liabilities, etc. For instance, if you lend money on a fix and flip out of your IRA (structured funds) and the borrower defaults forcing you to foreclose, you need to be sure that you understand the foreclosure laws within an IRA as this would be handled differently than if you had lent the money with cash.

If you choose to invest as an individual, do you know how this investment might affect your taxes? Everyone’s situation is different, but these are the questions you want to know the answers to BEFORE you jump in.

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.

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.

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.

How to Add Curb Appeal

You only get one chance to make a first impression. Having good curb appeal is one of the most important factors in attracting buyers to sell your fix and flip homes quickly. If your curb appeal is lacking, the right buyers may never even set foot in your home.

Walk around your home and look for any neglected areas that might seem like “red flags” to buyers, such as missing roof shingles or rotted siding. Trim trees and shrubs if needed, and make sure your lawn and flower beds are well maintained. Add some colorful flowers to your front beds and/or flower boxes to brighten up your landscaping.

To bring your house to the next level and really make it stand out from the rest, you want to create some sort of focal piece. Some houses have pre-existing outdoor focal pieces that you can enhance and highlight. For example, a porch on its own is great, but you can make it amazing with some simple improvements like patio furniture or seating. Adding some Adirondack chairs on the front lawn can create a conversational space that buyers will be sure to remember.

Make sure the exterior of your home is as clean as the interior. This can often be accomplished with a simple garden hose. You may even want to rent a pressure washer if the siding, walkway or driveway is stained or dingy.

Thoroughly wash windows and screens, and remove and dark solar screens if you have them. Open shutters, curtains and blinds, to make your house look more inviting from the outside – it will also brighten the inside of the home as well.

Consider a fresh coat of paint on your front door, trim and shutters. Personalizing the home will make your home stand out. Try small, cosmetic improvements like new house numbers, a colorful wreath and a clean front doormat. These minor inexpensive changes can pay off in a big way and help you sell your flip quickly for top dollar.

Looking to buy a new fix and flip? Let Investor Loan Source help with your financing needs.