Fix and flip properties seem to be all of the rage right now. There are endless TV shows out there all about fix and flip properties and so many pros out there who swear by investing in fix and flips as the best way to make a serious return on investment.

There are many people out there, with a DVR full of HGTV shows who think that they too may be able to take on fix and flips. However, it isn’t always as simple as it seems on television. And it isn’t always a guarantee return on investment. In fact, a majority of people who try out fixing and flipping for the first time, end up losing their investment and losing their money.

If you are thinking about getting into the fix and flip market, you should consider asking yourself a few questions first, to determine if you are really ready to make the jump into fix and flips.

• What is your plan to find the best deals? It is always important to have a serious plan on how you are going to find potential properties and what your maximum budget is.
• Do you know what area you are planning on flipping in? It is always important to focus on location, location, location. Look for up and coming neighborhoods where flipped houses are being sold so you can buy low and sell big.
• Do you have a contractor? The right contractor is key to a successful fix and flip.
• Do you have a realtor or a realtor’s license? You should either plan on getting your own realtor’s license, or make sure you are factoring in a realtor fee.
• What is your minimum break-even amount? You need to realize how much you need to make from a fix and flip in order to pay your bills and make enough income to stay afloat.
• Do you have a backup plan? If things go south with your fix and flip and you aren’t able to return your initial investment? Is it going to crush you financially if you lose money on this deal? If you are, then it isn’t a smart option.
• How are you going to finance? When it comes to financing your fix and flip, remember there are other options than a traditional mortgage, because this isn’t a traditional real estate transaction. Consider whether you are going to borrow funds or use a popular loan option like a hard money loan.

Sit down and really ask yourself these questions. If you are confident in your answers, then you may be ready to get started with a real estate investment. However, keep in mind that your answers may highlight that you aren’t quite ready for this type of big commitment. Either way, you need to make sure that you really think about your decision before jumping into fix and flips.

If you are planning on investing in a fix and flip property—this can be a great way for you to make a substantial amount of money. Fix and flip real estate investments have a lot of potential to make you a lot of money. However, it all depends on how the process goes, how low you can keep your costs and of course, who you choose as your contractor.

The right contractor can make sure that your project goes as planned, that you stay on budget and that you end up with a quality finished product that will get you the most money possible when you go to sell that property. The wrong contractor, on the other hand, can end up costing you a lot of money and end up causing issues in your fix and flip that can prevent you from getting the most money possible on your investment.

Here are some tips on making sure that you find the right contractor for your property:

• Make sure you have a contractor that can work in your time frame. Most common financing options for fix and flips, such as hard money loans, are on a deadline—and it is important that you are working with someone that understands, respects and will work with you to meet your deadline. With fix and flips—time is money.
• Make sure to find a contractor who works on fix and flips specifically. Working on a fix and flip is very different than working with an individual who is renovating their personal home. You want to work with a contractor who specifically is well-versed in fix and flips and who knows how to work within a tight budget, a tight deadline and how to create properties that are universally appealing to buyers.
• Always use contractors that have references. You want to make sure that you can call a contractor’s references or see verified reviews from people who have worked with the contractor in the past to get a better idea of what working with this individual will be like.
• See their work in person. Any contractor that is willing to work for your business should be willing to show you examples of their work.
• Get everything in writing. Once you have everything written out compare bids line by line to make sure that you are making the best choice for your fix and flip.
• Know how they communicate. You want to find a contractor that is easy to communicate with—and one that will communicate with you in a way that you prefer—whether that is text, email or phone call. After all, communication is key with any contractor—investor relationship.

Keep these tips in mind if you are looking to hire a contractor for your upcoming fix and flip. Remember, while staying on budget is important, there is more to finding the right contractor than just finding the cheapest one out there. If you keep these tips in mind you can end up with a contractor that will help you make the most of your upcoming fix and flip.

If you are planning on investing in real estate and want to fix and flip a home in order to make a profit, chances are people are going to be telling you all types of things and giving you all types of tips on what you should do and how you should do it. Some of these tips will be great—others, not so much, but one of the many “rules” you will likely hear when it comes to making a profit with your investments is the “70 Percent Rule.”

This is one of the most important and universally agreed upon rules when it comes to fixing and flipping a property?

So, what is the 70 percent rule when applied to fix and flip properties and how can you use it to your advantage?

The 70 percent rule states that an investor should pay 70 percent of the ARV, or the After Repair Value, of a property, minus the repairs needed to get the home ready to sell. This ARV is what the home is worth after it is fully repaired and ready to be sold.

So, for example if a home’s ARV is $300,000 and it needs $50,000 in repairs, then the most you should pay for the home is $160,000. Sure, it may seem as though buying a house that cheap means that you are going to make a huge profit, but after you go through closing costs, unexpected expenses (and there will be some), staging and every other cost that unexpectedly comes your way—you want to have this much potential profit margin to make sure you even end up making money at all.

It can be so tempting to try and “cut it close” when buying a house to fix and flip, but if you are new at fixing and flipping and don’t really know what you are doing, you are going to be really happy you kept to this rule. Otherwise, you can end up losing money on your first flip and ending your fixing and flipping career before it ever really gets off the ground.

Remember, if you want to make sure you are making a small amount or breaking even on these first few fix and flips so that you have enough money to keep your efforts going and to keep fixing and flipping properties moving forward.

Keep the 70 percent rule in mind and do your math before you decide to invest in a property. Keeping this rule in mind as you make your financial decisions will only help you get off on the right foot when investing in any property that comes your way.

If you are getting ready to get into the fix and flip market, and are looking to make some serious money from your upcoming flip—then you need to take some extra steps to make certain your flip really stands out. If you are anything like us, then when you are planning on financing and selling a flip, there is nothing as fun as binge watching some HGTV to help you feel more inspired.

HGTV can be great, and a lot of fun to watch. However, sometimes HGTV sets some very unrealistic expectations for those who are interested in actually flipping a property to make money. There are many precautions you should take when turning to HGTV for advice—but there are also some great pieces of inspiration that you can take from HGTV.

Here are a few updates that you can actually take from HGTV, and inspiration from Love It or List It and other shows that will help your flip really stand out.

• Don’t underestimate a fresh coat of paint. If there is one thing that the teams on these HGTV shows always do, it is painting. A fresh coat of paint on the interior and exterior of the home can make a major difference in the way that property looks. Choose neutral colors and don’t underestimate hiring a professional in order to get a professional finish.
• Don’t forget windows and doors. Windows and doors are expensive to replace—there is no denying. But this is another one of those things that you will see the professional flippers always pay attention to. You won’t see a professional home renovator skip replacing windows and doors—so you shouldn’t either. It’s going to be worth the investment anyway and it is a great fact to include on your listing details.
• Refinishing hardwood floors. If you are restoring an old home (as many flippers do) then don’t get too replacement happy. You can restore old hardwood floors for a fraction of replacing them and many times buyers love historic restored floors even more than new tiles or laminate.
• Don’t forget about lighting. Light fixtures are like adding accessories to a great outfit, they can take a home up to the next level and really make it shine. You don’t have to spend thousands on expensive light fixtures, but putting a few statement making fixtures throughout the home can really help it stand out from other flips.
• Faucets can be fun. A new trend you are going to see right now in fix and flip properties is statement making faucets. Instead of buying a builder’s-grade faucet from Home Depot for $20, spend a little more and get a quality, statement-making faucet for say $70 to give the home a higher-end look. The extra $50 won’t break the bank, but it will help your home stand out.

So, next time you are binge-watching Flip or Flop or Fixer Upper, pay attention to the aforementioned tips if you really want to make your flip stand out so that it can sell quickly and help you earn a profit.

When it comes to investing in real estate, one of the first and biggest questions that people tend to have is how they are going to finance this endeavor. However, after the dollars and cents get all worked out, it is time to figure out where they are going to be putting that money.

There is some dispute among real estate investors on whether or not they should invest in real estate in smaller towns or in big cities. So, what is the right answer? Well, it may be more complicated than you think.

We are going to take a look at the difference between buying in big cities or small towns, so you can make the most of your real estate investment.

There are many people who think about investing in real estate in bigger cities, and ultimately this is usually the best answer, and for a simple reason. There is more opportunity for growth in larger markets. You want to invest in a property that has a high growth potential. You can’t invest a small amount and fix and flip a property for big gains in an area that doesn’t have a big growth potential.

However, that doesn’t mean that there aren’t smaller towns that have big growth potential. Smaller towns that are located in close proximity to large cities or those that have seen bigger businesses open locations within this community. Many times, large companies will open warehouses or factories in small towns—and if you can get in before these bigger businesses make their way to small towns, you can end up making a smart investment that will really pay off.

Another thing to keep in mind is that while big-city growth can be great for real estate investing—investing in big cities with big growth potential also means big competition. You are going to have to compete for affordable properties in up-and-coming neighborhoods, you may have to out-bid other investors and work to get the property, and you are likely going to pay more for contractors work as well.

So, while in most situations, you are better off investing in big cities, there are caveats to both big city and small-town investing. You need to be able to run the numbers, be patient and find the right property in the right location for you.

Now that you have a little more insight on the difference between investing in properties in big cities or small towns—you have the information that you need in order to make the best investment possible for you and your future.

There are many great reasons to turn to hard money loans, particularly when you need to fund a real estate venture, fix-and-flip or other short-term investment opportunity. However, while many people have great reason to start with hard money loans, this is also a popular place to turn when you cannot get funding from the bank.

Hard money loans are a great option for a number of different types of investors—and as most investors know, most banks’ lending practices have become stricter in recent years. This is particularly true for investment properties. Timing, income, sell potential and credit score can all cause a bank to turn someone down for a loan.

However, when banks say “no” you can still come to a hard money lender in order to get the money that you need. Many times, they are willing to say “yes” even when a bank says “no.” This is not the only perk of a private lender and of hard money loans. It is also a great option for those who need their funds quickly. While a bank may typically take around 90 days in order to get the lendee their funds—private funders and hard money loans can come within a couple of weeks, or less.

However, it doesn’t mean that everyone always gets approved for the hard money loan requests that they make. This is why there are a few different pitfalls that you will want to try to avoid when you turn to hard money loans after the bank.

• You don’t have any of your own money in the investment. If you don’t have any skin in the game—your hard money lender may be apprehensive about approving your loan. A loan that covers 100% of the property purchase can be a hard sell. Your lender will want to know that you are also putting some of your own money into the investment.
• You don’t have enough cash on hand. While you don’t need as much money up front with a hard-money lender, you do need to prove that you have the cash to make the monthly payments as you pay back the loan.
• You don’t have an exit strategy. Hand money loans are typically short-term and include a large payment at the end of the term, such as when you sell the investment property. While you are obviously going to have a detailed plan that you are intending on following—you should also explain a back-up plan or exit strategy to repay the loan. This can be refinancing, pulling money from a different source or selling the property.

Keeping these common pitfalls in mind can be very helpful when you go to get a hard money loan. Remember, it is a different process than going through the bank, but ultimately it may be the best and easiest way for you to get all the funding that you need.

If you are investing in a fix and flip property and are looking to make the most of your investment—then you need to do more than just make random home improvement projects. You need to make the right home improvement projects.

So, how do you know which ones to do, and which ones to pass on? Here are a few home improvements that pay off… and a few that don’t.  Use this guide to help you determine which home improvements you should consider and which ones you should pass on.

Invest In: Replacing the Front Door

First impressions are important and a new front door can make a major first impression. Replacing that old, dated, squeaky front door won’t just keep drafts out of your new fix and flip, but will give the exterior of the home a fresh, updated look.

Don’t Invest In: Expensive Landscaping

Adding a little curb appeal can really go a long way in helping your property make a good first impression. However, don’t over do it—particularly when it comes to landscaping. A few flowers and planting grass is great, but expensive landscaping isn’t going to help you recoup your investment. Simply put, most home buyers aren’t going to pay thousands more for a house just because it has a lot of expensive plants out front.

Invest In: Kitchens

The kitchen is the center of the home—and you need to be willing to put money into making the center of the home really shine. Invest in updating the kitchen, but remember that you need to keep the value of the home in mind. Don’t put $100,000 into a kitchen for a house that is only going to sell for $300,000.

Don’t Invest In: Swimming Pools

There is this major misconception that swimming pools add value to homes. This isn’t always the case. Don’t spend money on putting in a swimming pool—you can highlight yards that would be great for a swimming pool, but putting the money in yourself isn’t going to help you get your investment back.

Invest In: New Windows

It is a big investment, but upgrading your windows is a great payback—just like the front door. It can add curb appeal, improve your home and its insulation, save utility costs, is a great selling point—and it can make your home look better too!

Don’t Invest In: Room Additions

Room additions can be a huge undertaking, and in most situations it isn’t worth it. This is especially true if you are planning on adding a family room or other living space, then it’s going to be really hard to recoup your investment. The cost is high—and you’re going to have to deal with permits and major construction. Most lower cost improvements have better payback than major renovations.

Keep these home improvements in mind when you invest in your next fix and flip property. Remember, the key is to make sure that you keep your costs low and that you make renovations that will appeal to a multitude of different buyers. Keeping this in mind will only help you on your journey to making the most from your fix and flip.

If you have a senior loved one in your life who has lived in the same home for quite some time—you may want to consider a few senior-friendly home improvements for their home. As we age, we may still love our homes, but it doesn’t mean that our homes continue to work for us as we grow older.

The good news is, there are several quick and easy home improvements that can be done to a home that will help make it safer and better for seniors. If you are looking for some inspiration, here are a few home improvements that every senior should consider when they are looking to make the most of their home.

• New Door Knobs- Turning a door knob may not seem like a big task to the average adult, but for a senior with arthritis it can be a major task and one that can come with a lot of pain. This can be quite a chore if you have traditional round door knobs. Simply replace these knobs with lever style door knobs in order to make life easier.
• New Flooring- Slip and falls are very common among seniors, especially those who use walkers and other aids. Low-pile carpeting is a great option for seniors who use walkers as it won’t catch on deep pile but is still soft and plush should a senior fall. Vinyl planks are another popular option for seniors as they are durable, not too slick and walker-friendly.
• New Support Railings- Support railings should be installed in all of the bathrooms. Railings along the toilet and near the shower can help prevent falls in the bathroom—where they tend to happen most. It is important to install a railing that is specifically meant to support the full weight of an adult, otherwise it will come undone and detach from the wall.
• Stair Railings, Guides and Lights- Stairs are very common in the home, but they can also be quite dangerous. Not every senior needs to add an electric chair on their stairs—but there are ways to make stairs safer and less of a fall hazard. Nonslip stair mats on every stair can help, and new railings along both sides are important. Make sure to check existing railings to make certain they are installed properly. You may also want to consider adding motion-sensor lights to the staircase for seniors who tend to wander to the kitchen in the middle of the night.

The good news is, there are many contractors out there that specifically work with seniors and are dedicated to helping older adults make smart additions and changes to their homes. There are even certain cities that offer grants for older adults who make certain safety repairs to their homes as well—for those that qualify. Keep this list of ideas in mind, or start creating your own list of safety improvements for your senior-friendly home.

So, you need some money for a quick fix and flip? Many people looking to break into this business do and often struggle to determine what place is the right place to secure the financing that they need. The good news is, hard money lenders can help.

However, there are some people who have trepidation’s regarding hard money lenders. Perhaps they have heard a horror story in the past, perhaps it is the name “hard money” or perhaps it is the fact that they just don’t really understand what a hard money lender is.

The good news is, hard money lenders aren’t as scary as you think. In fact, they, in general, tend to make getting loans quite easy. Here’s what you need to know about hard money lenders and what they offer.

Why You Should Turn to Hard Money Lenders

Hard money lenders are private investors that are dedicated to helping people get short-term loans secured by real estate. These lenders specialize in short-term real estate investment opportunities such as fix and flips.

They typically give out loans for about 12 months, but they may lend longer, and they will ask you to provide monthly payments of interest or interest and some principal and at the end of the loan (when you sell your fix and flip) you will make a balloon payment for the remainder of the loan.

These lenders are going to work with you one-on-one and base their decisions on the deal they are presented with. They aren’t going to comb through your financial records. Instead, they are going to look at the potential for your fix and flip to earn money and base their loan terms on that.

What are the Pros of Hard Money Loans?

There are many pros of the hard money loans you can get from these lenders, this includes:

• Speed of Approval—you can typically get these loans secured very quickly compared to other mortgages, typically because the lender is mostly focused on collateral not all of the other financial documents that mortgage companies need from you.
• Flexibility—one of the biggest benefits of working with hard money lenders is that they can be more flexible than traditional loan officers. These lenders will evaluate each deal individually and are often more flexible with individuals than large companies are.
• More Approval Rates-with hard money loans, you can avoid issues with getting your loan approved. Credit issues, or bankruptcies aren’t going to prevent you from getting a loan approved in the way they would with other mortgages—hard money lenders are more focused on the deal.

So, if you have been apprehensive about hard money lenders in the past—now you know about just how helpful they can be when you need cash for your upcoming fix and flip. Keep this information in mind before you find the right financing for your investment property, as a hard money lender may be just the ticket to you getting the money you need to make your fix and flip dreams a reality.

There are so many ways to make money in real estate, especially if you are able to buy a house at a great price, make some valuable improvements and then sell that house for the right number. However, there is even more to do if you really want to make top dollar in real estate—and as every pro knows, it is all about the little extra things that you do to make that extra money and to really separate yourself from the crowd.

This is why we have curated a list of some practical, hard and fast tips to keep in mind so you can make sure you’re really earning your max potential.

1. Make sure you are investing in neighborhoods with future growth potential. You can also look to “next-wave” cities based on economic growth. You can access this information through your local government office.
2. Consider strategies to lessen your capital gains taxes on flips. If you live in the property for two of the five years before you sell—you can exclude a lot of your property gain. Make sure to read up on the rules, but being creative in this way with your fix and flip can really end up helping you make a great deal more.
3. Consider hard money lending. It is a great way to let your money work for you while you secure the funds you need in order to make your fix and flip a reality.
4. Educate yourself. There are programs such as those available on Real Estate Express that can help get you certified in things like home inspections, or appraisals—which can really help if you are planning on investing in a fix and flip.
5. Look for pre-foreclosures. Also known as lis pendens, these properties can be more difficult to track down, but they are some of the best deals out there, as you are able to secure a house on the cheap, while the seller can effectively avoid foreclosure proceedings.
6. Consider REO (real-estate owned) or bank-owned properties. The bank is going to do a lot of the dirty work for you, like evicting tenants and clearing any liens—so you can spend your time and money on getting it ready to make the big bucks.

It is easy to get caught up in all of the improvements, financing and other obstacles that come with fix and flip properties. However, it is important that you remember, you still need to keep these real estate essentials in mind during the process so that you can make the most of your investment and have the financing you need to move on to the next one!