3 Tips To Make Sure Your Next Home Flip Is A Success
Home flipping is one of the most popular forms of real estate investment in today’s market. Purchasing a home in need of repair, performing the necessary renovations and reselling for a profit can be a great way to earn some easy income. Of course, as with any type of investment, there is always risk involved and in order to ensure the best possible outcome of any flip you’ll want to proceed with caution.
Any fix & flip purchase is going to require some sort of financing and that means securing a loan. Since most banks and credit unions consider fix & flip investments too risky, a traditional loan may not be your best bet. In these cases, a hard money loan is the better option as hard money lenders are more likely to consider the potential return on investment and weigh it more heavily than the risk.
Before you choose to get in on the fix & flip trend, you’ll want to keep the following tips in mind to help you secure the hard money loan you need and turn that flip into a success:
Focus on Location–
It’s an old standard when it comes to any kind of real estate purchase: location, location, location. This is just as true for fix & flip investments and it can make all the difference when it comes to ensuring a successful outcome. When considering a property for a fix & flip, you want to focus on the worst property in a good neighborhood. You can improve the condition of a property but you can’t do anything about improving the location. No matter how much money you might put into a house, if it’s in a bad location, you’re not likely to get a good return on your investment. With a good location the chances of securing a successful flip and seeing a decent profit are much higher. Lenders realize this too and they’ll take the location of a property into consideration when deciding whether to approve your loan, especially if you’re using that property as collateral against the loan. For inspiration check out our recently funded hard money projects.
Check The Condition –
The success of a fix & flip deal is dependent on how well you can renovate the property. The last thing you want is to get in over your head with a property that has serious problems. Before making a purchase, you should always carefully check the condition of the home. Pay special attention to things like structural issues, roof damage, poor wiring or mold. These types of problems can cost a great deal of money to repair, which will chip away at the amount of your potential profit. Focus instead on properties that only require simple repairs such as refinishing kitchen cabinets, upgrading landscaping, painting and installing new carpeting. Also, don’t forget to factor in the cost of building permits when you’re figuring out your bottom line for repairs. The amount you spend on fixing the property is a major factor in determining the viability of a loan so you should never take it for granted.
Market Value –
The market value of a home can also factor heavily into the success of a fix & flip investment. You want to find a home that is priced below its value on the local market. As with location, you should focus on the worst property in a good neighborhood as its value can only improve. Also, when you consider renovation you should be careful not to invest too much. You want to renovate just enough to make a good profit and keep in line with the market value rather than trying to go overboard with upgrades.
Consider a Hard Money Loan To Fund Your Investment
Funding a fix & flip investment is all about moving quickly and securing the money you need to ensure success. In most cases, that means opting for a hard money loan. Lantzman Lending has over 50 years of experience as hard money lenders, much of it working with real estate investors on fix & flip properties in California, Texas and Nevada.
We use our own money to fund loans and don’t waste time going over your financial history or credit score so you can be sure to get the money you need as quickly as possible. Just fill out an application and we’ll give you a quote within 24 hours. In most cases we’ll have the loan secured within 4-5 days and in some circumstances we may even be able to get it done in as little as 3 days.
We understand what’s involved in a fix & flip investment and we’ll work with you to tailor your loan to fit your specific needs. Like you, our primary goal is ensuring that your deal is a success and that you get the best possible return on your investment.
There will always be risk involved in any real estate investing but that shouldn’t mean that a loan is out of your reach. When you need quick funding for a fix & flip property, Lantzman Lending is ready to help with a hassle free hard money loan. That way you can secure your purchase and focus on the renovations that will ultimately lead to success.
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