If you have decided to invest in a fix and flip property, this can be a great investment for you and a great way to make some serious money. There are so many people today who have found success in this fix and flip market and who have been able to make money off of rehabbing these properties. Just look at popular television shows and you will see countless shows that are all about the individuals who are able to flip money for some major returns.

So, what exactly is their secret? Well the people that are able to make a lot of money off of these properties know some insider tips that can help them stand out from the crowd. Here are a few secrets to making your fix and flip a success.

  1. You need to buy the home at the right price. Finding the right fix and flip property isn’t as easy as it seems. You need to buy the initial home at the right price. Look at comps, set a budget and stick to that budget. If you buy for too much right away don’t expect to just make up for it with lower renovation costs—that never works out.
  2. You need to have cash on hand. The best way to get a good loan on a fix and flip property is to have some cash on hand for your first investment. You don’t need 100% cash to invest, but you will need to have some on hand.
  3. Consult a professional for estimates. You may think you know how much renovations cost, but if you aren’t a professional contractor, chances are you may be wrong. You always need to consult a professional for renovation estimates. Underestimating the cost of renovations is the number one reason that people fail to turn a profit on their fix and flips.
  4. Hire a good contractor. You need to find a reliable contractor to do the work for you. Ask for references, look at their past work and talk to them about their experiences with whole home flips. You want someone who knows what they are doing more than just finding the cheapest contractor.
  5. Buy in the right area. It is essential that you do your research on the neighborhood you are buying in. You want to find an up and coming neighborhood that is safe and where homes are selling fast. This can allow you to buy for cheap and sell for more. Another good rule of thumb is to look for neighborhoods where flips are already popular.
  6. The don’t over-do it. Once you get into fixing up a flip, it can be easy to go all out and start adding new and more expensive improvements. Don’t assume that just because you spend money on a renovation that you are going to get that money back. Know what homes in your area are selling for and stick to your budget. Not everyone wants, needs or can afford marble countertops.

Not everyone who invests in fix and flip properties is able to turn a profit. However, if you keep these insider secrets in mind, you have a much higher chance of making your fix and flip investment a profitable one.

If you are planning on  making a fix and flip investment, then one of the best things that you can do is to make sure you know a few insider secrets on what tends to make these investments a success. However, in addition to knowing the secrets on what to do, you also need to know what not to do when investing in one of these properties. The good news is, people have been fixing and flipping homes for some time now, meaning you can easily learn from their mistakes and avoid these mistakes when it is your turn.

  1. They don’t have enough money. Chances are, your fix and flip investment is going to be more expensive than you think. It is best to have too much money instead of not enough. You need to prepare for extra fees and for paying more in renovations than you originally planned.
  2. They only consider traditional mortgages. Sure, you can invest in a fix and flip using a traditional mortgage, but that isn’t always the best option and it isn’t always your only option. Instead of just considering a traditional mortgage, look into other lending options like hard money loans. Limiting your potential funding options is an easy mistake to avoid.
  3. They don’t plan for enough time. There are so many new investors that run the numbers and find they can make say $5,000 on their fix and flip property. This may sound like a great investment at first, but you need to think about how much time it will really take. One of the biggest mistakes that new investors tend to make is that they don’t give themselves enough time on their fix and flip. Most flips won’t be done in a matter of weeks. You need to think if that $5,000 profit will really be worth it if the flip takes 6 months.
  4. They don’t have the skills. If you aren’t a professional carpenter, contractor or plumber, chances are you don’t have the skills to make a fix and flip investment. Even if you are “handy” don’t assume you have what it takes to do the work on your own—you need a professional.
  5. They don’t know the neighborhood. Don’t invest in an area that you aren’t familiar with. You can think it looks promising or like the house seems like a good deal, but if you don’t know the neighborhood then you really don’t know anything.
  6. They are too trigger happy. If you are ready to invest in your first fix and flip, you need to be patient. So many first time investors get so excited that they don’t wait for the right property and they try to force a project that simply isn’t there. Take your time, it will be worth it in the end.

The more you know ahead of time when it comes to making your fix and flip investment, the better. You can never be too prepared to make a significant investment like this. Keep these tips in mind and you can make certain that your flip doesn’t turn into a flop.

If you are looking to invest in commercial real estate, then some of the biggest questions you will likely have are probably going to do with financing. The first thing that any commercial real estate developer will tell you is that when you invest in these types of properties, it is much different than investing in residential real estate. When you are looking to buy commercial real estate, you simply can’t go to the bank and get a traditional mortgage like you would for a home. This is why so many people turn to commercial hard money loans instead.

If you haven’t explored this financing solution yet, then you may want to look into commercial hard money loans. They are becoming an increasingly popular solution for commercial investors and come with a number of perks, including the following benefits:

  1. These Loans Are Flexible. Commercial hard money loans don’t need to go under the underwriting process of traditional loans. They assess every borrower individually. This means there is much more flexibility with the loan when compared to traditional loan products.
  2. The Approval Process is Fast. One of the biggest drawbacks of traditional loans is how long they take to get approved. With hard money loans, you can get approval fast as the lender is only really looking at the value of your property. This means your lender doesn’t have to look at credit scores, bank statements or income reports, they just have to make sure that the investment property meets the right Loan-To-Value ratio.
  3. There are no cash out limits. This is something that can help mitigate the risks involved with other loans, as you don’t have to worry about the commercial deal slipping out from under you if you were unable to get financing in time.
  4. People who don’t qualify for bank loans can get financing. Since the process is so streamlined and essentially operates under common sense guidelines, there are many people who don’t qualify for bank loans and are ultimately approved for commercial hard money loans. This means if a traditional financing institution has shut you down in the past, you may still be able to get the financing you need.

If you are entering into the world of commercial real estate investing for the first time, make sure to give hard money loans a chance. They may just be the key to making your deal a reality and for you to find the financial backing you need for your investment.

With so many reality shows capitalizing on the fun and drama that come with home flips and fixer-upper properties, there are now more people than ever looking into fix and flip projects. However, just wanting to do a fix and flip is only half the battle—you also need to know how to pay for that type of investment. While the payback is significant for many people who flip homes, it doesn’t mean that getting the initial backing you need for this investment is quite so easy.

The good news is, since fix and flips are typically fairly short-term, there is more flexibility for investors as it doesn’t mean you are locked into a loan for 15-30 years. If you are considering investing in a fix and flip, here are some different loan options you may want to consider. We have detailed each of these loan options along with what type of situation they are typically best for.

  1. Hard Money Loans- This loan is ideal for experienced investors who have completed a flip or two before, or novice investors who are planning on working with a contractor. This is one of the most common type of financing solutions.
  2. Cash Out Refinance Loan- Investors who already have an existing property with between 30-40% equity in it, can take cash out and refinance for their fix and flip investment.
  3. Bridge Loan- This is a loan for people who want to purchase a property fast without having to sell another property first.
  4. Investment Property Line of Credit- This lending solution is great for investors who have equity in their rental properties and who want to get cash out. Typically, this cash is used to rehabilitate a current property they already own or to buy a new one.
  5. Permanent Bank Loan and Online Mortgage- This solution is idea for “buy and hold” investors who want to purchase a property and flip it over a long period of time before selling. This isn’t for the fix and flippers who want in and out of the investment in 60 days.

When it comes to financing your upcoming fix and flip, remember the process is going to be quite different than securing a loan on a primary residence. Explore these different financing options to find the loan solution that works for you and you can quickly be on your way to making the most out of this unique type of real estate investment.

The HardMoneyHome.com Volunteerism and Entrepreneurship Scholarship winner for Fall 2018 has been chosen. Cheyenne Clopton, who is attending the University of Southern California, will receive a $1,000 scholarship for her volunteer experience and passion for entrepreneurship.

Cheyenne took on a very important role at her high school by volunteering to be the debate coach for a full year.  Her school was left without a debate coach and as a student, Cheyenne decided to step up and volunteer to teach and coach her fellow students so that they could learn and participate on the debate team that year.  Her actions were unprecedented and she took a huge risk since she had other duties as a student that year as well, but she picked up the responsibility of being the coach.  She communicated with administration and taught herself and other students debate materials.  Her fellow students were able to learn debate, and build relationships, knowledge, and confidence due to Cheyenne’s role.  Cheyenne said that she, “used to underestimate herself, but now she knows that if she puts her mind to anything she can definitely achieve it, and it’s not too early to start making change.”

Cheyenne is interested in becoming an entrepreneur by giving back to underprivileged communities.  She wants to start a non-profit aimed at younger people so that they can help realize their fullest potential.  Cheyenne is going to study Political Science, Social Change and Nonprofits in college.  Congratulations, Cheyenne!

See Cheyenne’s full scholarship submission video below.

There are so many different types of lending options out there and so many unique avenues to consider when looking for different loan options. One of the most popular types of lending products out there today are known as hard money loans and while they are not always the most appropriate type of lending option, they can be a valuable asset in a number of situations. If you aren’t already familiar with hard money loans and all that they can offer, here are some of the basics involved with these loans so that you can get a better understanding of what they are appropriate for and when and where you should use these loan options to meet your financial needs.

What Situations Are Ideal for Hard Money Loans?

There are many different situations where you could be using hard money loans. However, they are most commonly utilized in:

  • Home flips
  • Construction loans
  • Land loans
  • Situations where a property buyer has bad credit
  • When real estate investors need to move quickly

If you are in one of these situations, then a hard money loan can be a great option.

What Are the Benefits of Hard Money Loans?

So, why exactly do so many people like using hard money loans, especially in the aforementioned situations. Well, one of the biggest benefits is that hard money lenders are able to fund these loans quickly. There are many types of hard money loans that can be funded in as little as week. However, a traditional bank-funded loan can take much longer and typically takes between 30-45 days to get approval.

This is why hard money loans have become such a popular option for real estate investors who often find that time is of the essence when it comes to securing the funds they need. Hard money loans are often used in situations where a borrower has already been rejected by the bank for a conventional loan. This can be from credit issues, foreclosures, short sales or even insufficient income history.

Borrowing Requirements With Hard Money Loans

One of the most unique things about using a hard money loan instead of a conventional loan is that hard money lenders are typically primarily concerned with the amount of equity that the borrower has invested in the property—and how much the borrower has to use as collateral. This is the primary thing that hard money lenders will look at as opposed to the borrower’s credit rating. Most hard money lenders are willing to overlook things like foreclosures if the borrower has enough equity or capital to pay the interest on the loan.

Hard money lenders will also look for a plan from the borrower, and make sure that they have a plan for how to use the money and how to pay off the loan. Typically, this means property improvements that can improve the value of a home in the long-term.

These are some of the basic cornerstones of hard money loans and some essential facts that you need to know about these loans before you consider one moving forward. As you can see, there are many perks of these loans and many situations where they may be able to help you get the financing your are looking for.

Using a private lender or a hard money lender when looking to finance an investment property can be a great way to get the money that you are looking for. There is so much that goes into investing in real estate and it is important to note that if you are buying an investment property, it is typically different than the process involved with purchasing your normal primary residence. This is why so many people turn to private money lenders or hard money loans.

Typically speaking, these lending options offer more flexibility and they move much faster than using traditional financing. This is a major benefit in the quick-paced world of real estate investing. However, not all private lenders are created equal, so before you decide on who you will be using for your hard money loans, there are a few things that you should look for that will let you know you are making a smart choice.

  1. Great Communication

As you reach out to a lender and start to communicate with them, you want to make sure that you find someone that is super responsive to all of your communications. Whether this means answering a phone call or responding to questions over email—responsiveness is key. One of the main reasons why people work with private money lenders over traditional banks is that they allow deals to be closed quickly. Think days instead of months.

This is why you need someone in your corner who is super responsive and on top of things. After all, you don’t want that perfect investment property to slip through your fingers because you couldn’t get ahold of your lender. The lender should be very responsive but also quite transparent about everything that is happening along the way.

  1. Competitive Rates and Points

Of course, as you look for lenders, make sure that you are comparing rates and points. You want to keep an eye on every cent when it comes to investment properties. These lenders understand the importance of keeping rates low as they primarily work with real estate investors and those planning on flipping homes. However, it is important to remember that these are not traditional loans that you get from a large, national bank—so don’t try to compare these rates to those mortgage rates—they are not going to be the same.

  1. Funding

Look at how much money you are going to have to put forward. There are certain fees and down payments that are standard in this industry, but make sure that you are clear on how much you actually need to bring to the table and how much the lender expects you to come up with. Don’t be fooled by a lender that says that you need to pay a huge amount in “engagement fees” on top of your existing fees when getting a loan.

There is no denying that choosing the right lender can be tricky. However, if you take the time and do your due diligence you can end up with a quality lender that ensures all of your deals move swiftly and seamlessly—and that you are staying on top of your game with your financing as you venture into the world of real estate investments.

If you are thinking about making the jump into real estate investing, then this can be an exciting prospect for your future. There are many people who find a great deal of success with real estate investing and turn it into a long and profitable career. However, real estate investing also comes with a great deal of risk. This is why if you are considering a foray into the world of real estate investing you need to take a minute to really think about your decision and whether or not you are ready to enter into this market.

Here are five signs that you may not be ready to invest in real estate.

  1. You Haven’t Done Your Research

If you’ve never read an investing book, then you likely aren’t ready to start real estate investing. You need to be able to commit your time into learning more about real estate investing so you can actually understand the market you are about to get into. You need to read at least one book on real estate investing before you really consider a career in this field. In addition to reading an entire book, make sure you are constantly following real estate investing blogs, listening to podcasts and familiarizing yourself with this industry. If you aren’t really able to dive deep into this market, then you may not be ready to start real estate investing.

  1. You Haven’t Looked At Your Spending

Real estate investing is going to force you to look at your finances differently and to really hone in one your spending and the way you view money. If you want to be successful in this field, you are going to need to review your finances and start preparing yourself for an investing like this. It is always good to tighten everything up and have a larger cushion in place so before you start this career. You never know what unexpected costs are going to arise in the world of real estate investing so you need to be as prepared as you can be.

  1. You Are Thinking Too Much About Metrics

There is such as thing as analysis paralysis, especially in real estate investing. Instead of focusing on too many metrics at once, pick one and stick with it. Make sure that you know it well. If you find yourself exploring too many options right now, you may not be ready to make this type of plunge.

  1. You Haven’t Figured Out Financing

If you haven’t talked to a lender yet, then you likely aren’t ready to start investing in real estate. Unless you are planning on paying straight cash, you need to have your financing figured out. Whether this is a mortgage, hard money loan or anything in between, you need to have your financing options figured out before you start your career.

If you found that any of these things are true, then it may not be time for you to seriously start your new career in real estate investing. Remember, the more prepared you are before you start, the better off you will be.

So, you’ve invested in a piece of real estate. Perhaps you’ve flipped or at least repaired the property, and put a lot of thought and blood sweat and tears into this new venture. After all, real estate investing can be a huge undertaking. However, if you are choosing to manage this property on your own, instead of working with a management company, then your journey is only just beginning. The more you know about some of the difficulties associated with property management, the better prepared you will be to handle this responsibility.

Here are some hard lessons that only property managers know.

  1. Not All Tenants Are Great at Managing Their Money.

Chances are you will see this around the holidays, but it can happen all of the time. Rent day comes and goes and your tenant magically doesn’t have enough money to cover the cost of rent. Then, you may see them with a new iPhone or wearing some new expensive designer duds. You need to have a strict policy in place about late rent and covering late rent fees, or your tenants will come up with any excuse such as “I spent too much on Christmas gifts” to send in a late check.

  1. The “Friend’s” Dog Excuse.

So, you’ve put in a “no pet” policy, or decided to charge a pet fee. Great idea. However, there are many renters who love trying to get around this and sneak pets into their rental properties. Chances are, they will tell you its just their brother’s dog staying for the weekend or they are temporarily pet-sitting. Many times, this is a bit of a stretch, so be on the lookout for unapproved pets coming in and out of the property.

  1. Your Disappearing Social Life.

You may have decided to manage a property all on your own. However, while you may be saving in property management costs, you may be paying a lot extra when it comes to your social life. Be prepared for have tenants needing all types of repairs and help in the property and to call or email you around the clock. Guess when they are likely going to call? Yeah, on your precious weekends.

  1. The Hurricane Tenant Who Wants Their Deposit Back.

A security deposit is always a must when renting out a property. However, just because you have a security deposit it doesn’t mean that your rental is completely safe from a destructive tenant. Be prepared for backlash when it comes time for tenants to get that security deposit back. Nearly every property manager can tell you that the most destructive of tenants are going to want their whole security deposit back. So be prepared to handle situations where renters will destroy carpets, damage walls or leave behind giant messes, only to expect their entire deposit returned immediately.

  1. The Subletter.

This is a huge issue among many property managers and one you should be prepared for. There are many renters who will act as mini property managers of their own and sublet their apartments to others, without asking their property manager. Make sure you keep an eye out on this one. Subletting may seem innocent enough, but: a. it usually means your tenant is making money of you and b. it means someone you don’t know who you haven’t screened is living in your property.

Managing your own property can be a huge undertaking and it can come with a number of obstacles. However, the more prepared you are to handle these common issues, the better. Make sure you keep these lessons in mind so you can be more prepared to handle this new responsibility.

There are so many things that go into navigating the waters of today’s real estate investing world. It can be difficult and complicated to figure this market out, which is why so many new investors often make a number of mistakes. Sometimes these mistakes can be rather minimal, but other times they can be quite costly. Avoidable, expensive mistakes can really add up and really make an impact on your real estate career.

The more you know about these common and avoidable mistakes, the easier it will be to avoid these issues moving forward. Here are the most common mistakes that new investors make.

  1. Not Calculating Cash Flow- Calculating cash flow ahead of time can be a difficult undertaking. Unfortunately, many investors tend to ignore or underestimate the expenses that they will have when investing in real estate. However, taking the time to calculate expenses in detail and over-estimating most expenses can help get the cash flow right. Don’t forget about things like maintenance, repairs, property management fees and vacancy rates when making these estimates.
  2. Attempting to Time the Market- This is another mistake that so many new investors make. Everyone thinks that they can predict the market and how they can turn a little investment into a lot of cash—and very few people can actually do this. Even the best economists in the world can’t accurately predict the market. So, even if you’ve lucked out before with the timing of the market, don’t try to repeat this magic. Focus your efforts elsewhere, it will be a better use of your time.
  3. Not Building a Team- Real estate investing really is a group effort. No matter how independent you may think you are, you need to have reliable network of individuals to help you along your journey. This means a great realtor, home inspector, contractor, handyman and lender. Know who you can rely on and who you like working with so you can continue to count on these individuals with every investment you make in the future.
  4. Budgeting For the Unexpected- You need to have a cushion when budgeting for real estate investments. It can be easy to forget that you need to have a big cushion set aside and easy to be tempted to put it all towards your property. If you were planning on $15,000 worth of repairs and upgrades to your property, put $20,000 aside. You need to have a cushion. It is always better to budget too much than too little.

Have you made these real estate mistakes before? Hopefully you can learn these lessons the easy way and avoid them before they turn into an expensive mistake for your future.