3 Useful Tips for Fix and Flip Loan Borrowers
If you are thinking of diving into the house-flipping business, now is a great time. More than 200,000 homes were renovated in 2018 with an average gross profit of $65,000 per property. Why? Because renovated homes fetch a better price than dilapidated ones.
The house-flipping trend has become a popular investment option for many. However, for people who want to fix and flip homes, the most challenging part is arranging the necessary funds for purchasing or repairing work.
Fortunately, several fix and flip loan lenders (also called hard money lenders) are ready to assist you financially. How can you pick out the best one?
Here are three valuable tips to help you choose a fix and flip lender that’s best suited for your project.
Tip 1. Examine the Property Thoroughly
Before acquiring the loan for renovation work, make sure you thoroughly scrutinize the property. If the property requires significant structural changes such as installing a new roof, electrical wiring or plumbing, or major foundation fixes, they will cost you much more to repair. It is best to look for another property with no major construction or repair faults.
A dilapidated property with several foundational issues will cost you more money than it’s worth. Also, a faulty property will take plenty of time to get renovated, therefore delaying how soon you can sell it. It is best to acquire a fix and flip loan for properties that mostly need cosmetic renovations such as false ceilings, repainting, new flooring, and carpeting. These renovations are usually quick and cheaper to take care of while still significantly increasing the property's value.
Tip 2. Develop a Winning Marketing Strategy
There are several properties available out there for people to buy. Amidst the fiery competition, how would you convince prospects to choose your property before the others? What makes your property stand out from the rest?
This is where effective marketing strategies come in. Before acquiring a loan to buy the property, make sure you examine it and prepare a list of all the features and amenities it has or needs work on. If you think the property has great features than other places, go for it. The more buyers you have, the more authority you have to play with the prices. This will increase your chances of getting a good return on your property investment loan.
Tip 3. Beware of Real-Estate Scammers
Desperate to make more money, some real-estate agents trick people into buying shambolic properties. These agents tend to disguise the flaws, exaggerate the property features and amenities, all so that they can sell it for more than its worth.
To avoid getting tricked by these real-estate scammers, make sure you research thoroughly and conduct an in-depth inspection before making any deal. It’s best to get a second opinion from an experienced realtor who will look for issues you may have overlooked. We recommend exploring the real estate industry and see it in action. Doing extensive research and exploring properties that get flipped are a good way to mitigate risks of failure.
Get Fix and Flip Loan
There are several risks involved in acquiring a fix and flip loan. Make sure you investigate the market thoroughly and make a shortlist of the best properties. Once you are satisfied that the place works for you, you can invest your money in them for generous rewards.
Feel free to contact us if you need a reliable commercial and residential lender. We are excited to learn about your project and help you fulfill your real estate dreams.