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Fix and flip properties are becoming a very popular investment for people who want to take a little bit of a gamble, and hopefully make a lot of money in the process. However, fix and flips are much more complicated than they first appear. You need to renovate the property in order to get top dollar, but there is also such a thing as over-renovating. You need to make sure that you are only spending money on upgrades that actually add value.

Remember, your goal is to spend as little money as possible to make as much money as possible. Here are a few ways to make sure you that you are adding value to your fix and flip.

  1. Remember the golden rule. There are three things that determine the value of real estate: location, location and location. This has always been the rule and will always be the rule. If you buy in a good location, for a low price, you are already ahead of the curve, no matter what improvements you make. There is no better “value add” than a great location.
  2. Keep the comps in mind. It is really easy to over improve a property. You may spend all this money for higher end upgrades and end up with a home that is pretty, but overpriced given the neighborhood. This is not adding value, this is just spending money.
  3. Don’t limit your buyers. There are plenty of ways you can spend money in a home to add things, but in the meantime you may end up cutting out some of your potential buyers. If you really want to add value to the property, you need to make it appealing to as many people as possible. So, don’t be buyer specific with what you add.
  4. Make a strong first impression. Curb appeal is huge and it is worth spending money on the exterior of the home in order to have better curb appeal. Paint the front door a bright color and plant flowers and plants outdoors. Upgrade the exterior lighting and consider a new mailbox. However, this isn’t the only first impression. The interior of the home needs to make a strong first impression as well, so spend a little extra really sprucing up the entry way to give buyers a great first impression of the home.
  5. Kitchens and bathrooms sell houses. If there is anywhere in the home that you are going to spend money, it should be the kitchen or the bathroom. These are the two areas in the home that are going to be worth spending money in. They may be a lot of money up front, but they have a great return on investment.

Keep these tips in mind as you start to renovate your fix and flip and remember that you goal is always to add value with every dollar that you spend.

There is no denying that home flipping shows have made a huge impact on the reality TV market. And while it is important to remember that these shows aren’t necessarily a guidebook to fixing and flipping homes in the real world—they can provide you with some great inspiration if your are planning on investing in and flipping a property. If you are looking for an excuse to do some binge watching and want some TV shows that will get you in the mood to start flipping, here are some great ones to get you started.

  1. Flip or Flop- This is the original flipping show and one that has created several other spin offs. Tarek and Christina are a dynamic duo that renovate disastrous homes in California and sell them for top dollar.
  2. Flip or Flop Atlanta- The original Flip or Flop created several new spin-offs, but Flip or Flop Atlanta is one of the front-runners, with the booming Atlanta market at its center, this is one interesting area to flip homes in and a city that proves that location really is everything.
  3. Brother Vs. Brother- While it isn’t your typical fix and flip show, like Flip or Flop, Brother Vs. Brother is a fun program for home renovators to tune into. This show stars the infamous Property Brothers fixing up and flipping old homes.
  4. Texas Flip N’ Move- This HGTV staple has been on the station since 2014 and features tiny houses that are sure fun to watch being flipped.
  5. Fixer Upper- Perhaps the most popular home flipping show out there is Fixer Upper. While Chip and Joanna buy homes to flip for one buyer, they still have some great renovation ideas and are sure fun to watch. Unfortunately, the program ended this year, but there are still plenty of reruns to browse!
  6. First Time Flippers- As the name suggests, this show on the DIY Network is all about amateurs trying to break into the flipping business. It is both informational and very entertaining to see these newbies take their hand at renovations.
  7. Good Bones- We love this HGTV show because instead of featuring the normal husband and wife duo, it actually has a mom and daughter fixing and flipping their very own hometown.

Give these shows a try next time you are looking for a little flipping inspiration. They can be a great way to get your creative juices flowing and take a first step towards your next fix and flip investment.

So, you want to start flipping homes. It can be a great investment, but it is can require some serious money, meaning it can be a serious risk. There are so many people who want to flip homes but they just don’t know where to start when it comes to breaking into this competitive industry. If you think you have what it takes, here are a few steps you need to take to get your dream of fixing and flipping homes off the ground.

  1. Make a Business Plan- If you want to fix and flip homes and actually make money, you need to treat the process like the business that it is. Make a plan, and be realistic about your goals, your profit expectations and your exit strategies. You also nee to detail the geographic areas you will be focusing on, the type of properties you plan on buying and your expected return on investment.
  2. Hire the Right Flipping Professionals- You need a team on your side to really excel at flipping. This means a great accountant, real estate attorney, realtor and contractor. You will hire them per project, but you need to have experts you really feel like you can trust.
  3. Give Your House Flipping Business an Entity- You need to set yourself up as a LLC, S Corporation, DBA or sole proprietor. This is all for tax purposes. You can talk with your accountant about your best option. You also want to give your company a name to establish credibility and make sure that you register your flipping business.
  4. Figure Out Financing- You will want to open a business bank account and a business credit card for your home flipping business, but if you really want to get in this industry you will need lots of cash too. Look into private money or hard money loans to get a better understanding of the loan options that are out there for you. It takes a lot to buy a home and pay for renovations, and traditional mortgages aren’t always the best bet for fix and flips.
  5. Do Your Research on Neighborhoods- You need to have the right location to fix in so make sure that you do your homework. Essentially, you want to find the worst house in the best neighborhood and look for a home that you can buy low, spend minimal on in terms of renovations and ultimately sell high. Make sure that the ideal sell price is reasonable for the neighborhood and that you are familiar with the comps before you ever make an offer.

These steps are essential to helping get your fix and flip venture off the ground. If you are willing to do the work, make the financial commitment and take the risk, this can be a very exciting new adventure!

Autumn is right around the corner and as most real estate investors know, the fall is one of the biggest times of year for buying and selling homes. If you are looking to invest in a property in hopes of fixing and flipping that home, then you need to be aware of some of the biggest trends that are going on in the fix and flip industry. If you are looking to make money in 2018, here are some of the biggest trends that you should keep in mind.

Location Still Reigns Supreme

The old adage location, location, location still applies, so make sure to remember this with your fix and flip investments. This is still the one thing that you absolutely can’t change about a home. There are a few big things to remember about location in fix and flip homes. Walkability is a big factor with location, particularly with millennial buyers, so walkable locations are always going to sell. School districts are still another important factor, as is safety, in 2018 when it comes to scouting locations.

Flexible Spaces

When you are fixing up and flipping a home, it is important to remember that your home is supposed to appeal to a number of different buyers, not just you and not just one type of buyer. Consider making spaces that can be flexible and used for a variety of purposes, such as a multi-purpose rec room/office space/dining room/playroom instead of just being a space that is supposed to be a formal living room.

Open Concept

The open concept trend is one that isn’t going away any time soon. People are loving the idea of open concept homes, especially when they like to entertain, or if they have small children they want to keep an eye on at all times. This is another way to bring flexibility to your space.

Light Colored Floors

This is a new trend that is making its way to the real estate market. While dark floors had their moment, right now, light, bright and airy floors that really make smaller spaces look bigger. So, when it is time to pick your flooring options for your new homes. So, when it comes to finding new floors for your fix and flip, remember that neutral, light-colored floors are a great option right now.

Mixed Metals

It used to be all about keeping everything matchy-matchy, but right now, mixed metals are making a comeback. Adding different metals in the kitchen, with hardware, with light fixtures and other elements in the home is a great way to bring a sense of modern style to the space and add design features that really help your property pop. The best part is that many of these features can easily be changed if the buyer doesn’t love them, so they don’t have to commit to the trend of they don’t want to.

Keep all of these tips in mind if you are looking to have a fix and flip property in 2018. These are the types of trends that can help your property sell quick as you make certain you are making a smart investment with this exciting new venture.

A pretty african american business woman at her company

Considering investing in a fix and flip property? This can be a great project and an exciting investment that can help you make money in the process. However, the biggest question that people tend to have about fix and flip investments is how exactly to pay for the initial home investment. While most people would love to be able to pay cash for their loan, the average person simply does not have that much in their account. The good news is there are a number of different lending products out there that can help you finance these flips and get that initial money you need to get your investment off the ground.

However, before you apply for a loan, such as a hard money loan, there are a few things that you should do to help with the process and to make sure everything goes smoothly. Here are our biggest tips to preparing for your fix and flip loan.

  1. Make a Business Plan for Your Flip. It seems like these days everyone is looking to get into the fix and flip market. In order to show lenders that you are serious, you need to create a business plan. THs information will not only help lenders take you seriously, but help you make sure that you get a loan that will help you cover your costs. This should include some basic information on the property, such as:
    1. The location
    2. An analysis of the neighborhood and comps for the area
    3. Your strategy and timeline for the project, including the “scope of work” and financials
    4. Background information on the team who will be helping you with the project
    5. Back up plans in case your renovation doesn’t go as it is supposed to
    6. Current value of the property from an appraiser
  1. Get An Accurate Estimate for Renovations. Obviously one of the biggest expenses involved with a fix and flip is the actual flipping part. Renovations can be as much or even more than the initial property investment, so you need to have an accurate assumption of how much they are going to cost, so you can get enough to cover these expenses. Remember, it is always best to overestimate instead of underestimate on these expenses so you don’t end up in over your head. It’s always best to have a pro on your side to help you with these types of estimations
  1. Know Your LTVs and ARVs. Before you head into talk dollars and cents with a lender, it is important that you know your LTVs and your ARVs. A LTV is a comparison of your loan size to the value of the property. Typically, the absolute maximum LTV on a fix and flip loan is 90%, but most products are much less. This means, you will need to provide the remaining amount in cash as a down payment. The ARV on the other hand is the appraiser’s estimate of property’s value after the renovations are done. There are many lenders who will quote your loan based on the ARV.

Keep these tips in mind if you are considering a fix and flip loan. Being prepared when you apply for your loan can only help expedite the process and make certain that everything goes smoothly so you can make this exciting new investment opportunity a reality.

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.