Real estate is one of the most profitable investment options out there right now, especially since we’re finally seeing healthy growth after last decade’s troubles in the housing market. There are a plethora of great opportunities out there, but regretfully it “takes money to make money”.
For someone new to buying and flipping real estate, the entire process can seem a little confusing. Sure, there are many important facets that need to be understood in order to be successful, but the overall concept really isn’t that hard to grasp. In fact, most of the knowledge that helps develop successful investors comes in the form of first-hand experience.
Keeping costs in line with the budget is vital to the financial success of any fix and flip investment property. One relatively common situation that can have a huge negative impact on your ability to do so is theft and vandalism. Even if you have an insurance policy that protects against these types of occurrences, the process to recoup your losses will still take time and can significantly add to your holding period. If you want to keep your investment safe and secure, here are some tips to deter criminals from targeting your property:
In real estate clubs and investment circles, talk about the benefits of hard money loans is commonplace. When it comes to the general public and new investors, however, there is a lot of confusion surrounding just how beneficial they are. For many people, a lack of understanding of this financing method has led to some untrue beliefs surrounding hard money.
Despite what you may have heard, here are five common myths about hard money loans that simply aren’t true:
When most people think about financing real estate, talking with a mortgage broker or going through a traditional lender are the first thoughts that comes to mind. Although these are great options for the normal consumer, they don’t always fit the needs of investors – especially those who focus on fixing and flipping properties. Instead, it’s not uncommon for them to avoid traditional financing altogether and opt instead for much more advantageous rehab loans.
It’s a fact that many new real estate investors purchase properties solely with cash. Commonly, this is because they have the money available and don’t want to deal with banks or other lenders. They think that getting a loan to purchase real estate comes with extra costs and restrictions, and while they’re kind of right, that doesn’t mean that this is a bad thing. There are costs involved with using loans for your real estate investments, but they are often greatly outweighed by the many other benefits of utilizing leverage.
When it comes to fixing and flipping real estate, there is no shortage of mistakes that can be made along the way. Compared to other types of real estate deals, fix and flip properties offer some of the largest returns but also come with some of the biggest risks. Too often, investors make errors in judgment that can cost them thousands or even tens of thousands of dollars. Luckily, by learning from the mistakes of other investors, you can improve your own real estate investment business.
Among serious real estate investors, hard money loans are one of the most commonly preferred methods for financing purchases. This is especially true with short-term investments like fix and flips. One thing that drives the popularity of hard money loans is the fact that they’re easy to get, provided you have found a bargain property. They’re approved based on the quality of your deal – not your credit score or other assets. Because of the local nature of hard money lenders, these loans are often approved quickly, too.
It’s not always easy to get investment real estate financed. This is especially true for investors looking to purchase properties that aren’t in the best condition, or for people who have trouble borrowing from traditional lenders. Luckily, conventional mortgages aren’t the only options – there are a number of other great financing sources that investors are using every single day to purchase real estate.