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 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 LinkedInFacebook, 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. 


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 LinkedInFacebook, 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. 


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. 

Do you know the difference between a BPO, Appraisal, and Assessed Value?

Money and Home on Scale

Estimating the value of a property is an essential part of real estate investing. Depending on who you ask, why you ask, and for what purpose, you may get different answers. Whether your next purchase is for a fix-n-flip or a rental property, arm yourself with knowledge so you can be prepared to provide the valuation needed for your next deal!

Brokers Price Opinion (BPO) – Less expensive and comprehensive than an appraisal, and based primarily on predictive data. The BPO is a real estate broker or sale agent’s opinion of a property’s value and is often used to set the sale price of a property. It is rarely allowed as a substitute for an actual appraisal and can be thought of as more of a starting point.

Appraisals – An unbiased opinion of value given by a licensed or certified appraiser, and based on historical data. Mostly used to determine market value by verifying that an appropriate price is set given the condition, location, and features of a property. This is often required by the lender when a mortgage is involved to buy, sell, or refinance a property.

There are three basic approaches used in appraisals to determine a property’s value:

  1. Sales Comparison Approach: an estimate derived from similar properties, known as comparables or comps, that have been sold within the last year under typical market conditions and within a certain distance from the subject property. Typically, at least three or four examples must be used to give a good valuation.
  • Cost Approach: Based on an assumption that buyers will not pay more for a property than it will cost them to build a similar property from scratch. The property value is determined by:

Cost of Land + Cost of Construction – Depreciation

This is the most common valuation to determine the price for unique buildings such as churches and schools, and residential properties that do not generate income.

  • Income Capital Approach: Assigns a value based on the estimated returns of a property using the formula:

Market Value = Net Operating Income / Capitalization Rate

Assessed Value – The dollar value of a property, assigned by a municipal property assessor to determine property taxes.  Comparable home sales, location, square footage, quality, and market conditions, among many other factors, can heavily influence this determination. This assessment is usually calculated at a percentage of the Fair Market Value (FMV) which is updated periodically and may be disputed by the owner.

As you can see each valuation has its time and place. While the Brokers’ Price Opinion can be used to set the sale price on your home it should not be relied upon as a buyer of investment properties. Most lenders will require an appraisal to be done which is a much more in-depth estimate of value, while the assessed value should be considered when factoring your property taxes into the DSCR and cost analysis.

Finding a team of real estate professionals that you can lean on for guidance is essential to success starting with a lender you can trust. Discover the Investor Loan Source difference today!


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 LinkedInFacebook, and Twitter. To apply for a loan, click HERE.

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.

Common Myths Regarding Hard Money

There are many misconceptions regarding hard money lenders in the real estate industry today, and yet for those in the know, it continuously proves to be a real estate investor’s biggest asset. Do not be put off by the stigma surrounding the word “hard money” or by stories you’ve heard about a friend of a friend before learning more. Here are the top arguments I hear from naysayers on a continual basis and the reasons why they are simply not true!

Myth #1: Hard money is only for the desperate real estate investor.

This is the biggest myth of all. Many hard money lenders are privately funded, meaning they do not require bank financing to close a loan. Therefore, many hard money lenders can be more flexible than the bank when underwriting a loan if the deal makes sense. Hard money is great for those who are self-employed as they do not need to prove their income with a W-2, as well as immigrants, those with less than perfect credit scores, investors who work with properties that appear to be less than desirable, those investors who have reached their loan limit with their institution, and those investors who just need to close the deal fast. Hard money is for everyone!

Myth #2: Hard money loans are expensive.

While hard money loans tend to give most people “sticker shock” it is important to remember to look at the big picture. Most hard money lenders can lend a higher percentage of your project’s cost than some stringent traditional lenders, allowing you to bring less out of pocket funds to the closing table.

Hard money loans tend to have shorter repayment periods and prepayment penalty times. This means you can pay the loan off faster with less interest in total. Investor Loan Source, a national private lender, even has a one-time close feature allowing you to convert your short-term rehab project to a long-term rental without going back to the closing table. This allows you to avoid paying closing fees a second time.

In addition, because of the fast-closing times of most hard money lenders (who can often close within 10 business days or sooner) your potential for profit rises. After all – time is money. In an environment as hot as the current real estate market, the wait for a traditional bank loan can cost you opportunities.

When combining these perks your hard money loan tends to be a less expensive choice overall.

Myth #3: Hard money loans are risky.

This myth is almost laughable. Most of the time hard money lenders are lending out their own money and making a risky loan is not in anyone’s best interest. Hard money lenders often have a vast understanding of the real estate market and what is entailed for a project to be successful. It is not uncommon for lenders to be successful businesspeople who have the entrepreneurial spirit and a reputable background in real estate, investment banking, accounting, law, etc. If you choose an experienced hard money lender, this will ensure that proper due diligence and calculations are done to help determine whether an investment will be profitable for you, the borrower. They want you to be successful so that you will use them for your next real estate investment project.

Myth #4: Hard money lenders want to take your property.

Stop right there! Hard money lenders are in the lending business NOT the foreclosure business. They do not want to own your property. When a foreclosure is pursued, you can be sure it is because every other avenue was exhausted. Regardless of whether you go the traditional lending route or hard money, be sure that you understand your loan terms, have a solid exit plan in place and care apable of repaying your debt.

Truth: Hard money lenders are important resource.

Do not pass up the opportunity and benefits that come with taking out a hard money loan for your next real estate investment deal. It may make sense to use hard money based on your needs and the investment opportunity. Finding a lender you can trust is the single most important choice you can make. Looking for a hard money lender? Consider Investor Loan Source. Visit www.ils.cash to learn more.


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 LinkedInFacebook, and Twitter. To apply for a loan, click HERE.

What Investors Should Know About Title Commitments

What is a Title Commitment and Why Do Investors Need One?

The title commitment for insurance is the insurers promise to issue title insurance after closing and should be carefully reviewed and understood. It is essentially a disclosure document that outlines any issues/requirements that need to be addressed prior to closing as well as any liens, obligations, and defects affecting a property. This is a snapshot in time looking backwards. Your title commitment will not ensure any title issues that arise after this date (ex. liens put on the property after the commitment is issued, etc.) and expires six months from the effective date seen on Schedule A of the commitment. After closing, your title company will issue your official Title Insurance Policy using the commitment previously provided. This document is important as it protects you should any disputes arise regarding ownership and provides coverage against losses due to title defects.

Loan Policy and Owner’s Policy

There are two types of title policy’s: the loan policy and owner’s policy. The loan policy is usually a requirement of any lender and will protect their interest in the property they are loaning money on. This policy is usually written at the loan amount. It does NOT insure the owner should any title issues arise. A separate owner’s policy can be purchased that will insure you for the full amount of the property purchase price (not just the loan amount) and will remain in place as long as you have an interest in the property.

Title Commitment Sections

Each title commitment is made up of three parts: Schedule A which covers the basics of the transaction, Schedule B Section I which lists all requirements that must be addressed prior to closing, and Schedule B Section II which addresses exceptions to coverage.

How to Read a Title Commitment

Schedule A

This part of the Title Commitment covers the basics of your transaction. It is imperative that all information here is correct. You will want to check your effective date, the name of the person who currently holds title (verify that this is your seller), the legal description (title companies do not insure addresses only legal descriptions and it must be correct), the proposed buyer and sales price (coverage amount for the owners policy), and the name of the lender and loan amount (coverage amount for the loan policy). You will also want to check that the commitment is countersigned by the insurance company.

Schedule B Section I – Requirements

This section outlines requirements to be addressed prior to closing in order to obtain coverage. You can expect to find information regarding paying off the sellers existing mortgage/lien, obtaining release of liens on the title, recording new loan documents, Taxes and HOA dues past due and current, and correcting errors in title. Fulfilling these requirements are sometimes as simple as providing documentation to the title company.

Schedule B Section II – Exceptions

This section lists things that will not be covered under your policy such as HOA restrictions, mineral and water rights, utility and access easements, encroachments, plat restrictions, liens not found in public record, etc. Most things you will find here are pretty standard however, you must review this section carefully as it may impact the way you use your property and ownership.

Investing in real estate is an important decision. When choosing a lender, be sure to select an experienced one that will walk you through the process and answer any questions you may have. Investor Loan Source is happy to assist you along the the way.


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 LinkedInFacebook, and Twitter. To apply for a loan, click HERE.

Calculating DSCR

If you are a part of the real estate investing world, then you probably have heard that properly calculating a property’s debt to service coverage ratio (DSCR) is crucial. If you are newer to investing, you may wonder why it is so important. Lenders use this equation to determine if a rental investment property’s cash flow is enough to cover their borrower’s loan payment in addition to all re-occurring expenses. As a borrower, the DSCR can help you gauge the profitability of your project saving you time and money.

The formula is quite simple, but first you must learn another acronym, PITIA. PITIA stands for property, interest, taxes, insurance, and association (HOA). These are the most common re-occurring expenses taken into consideration by a lender.

To calculate the DSCR take your annual rental income (numerator) and divide it by the property’s annual PITIA (denominator). The result is your DSCR. Anything below a 1 means you have negative cash flow and would be an unlikely candidate for approval.

Be sure to check with your lender regarding their DSCR requirements. As a rule of thumb, shoot for a DSCR above a 1.25. Remember, the higher the number the better chance for profitability. You can also find a DSCR calculator online at https://ils.cash/resources/.


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 LinkedInFacebook, 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 info@ils.cash for more information.


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 LinkedInFacebook, 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!