How to Flip a House: With Hard Money Lenders, Texas Investors Prosper
December 8, 2015Danger Beware! Protect Your Investment With Hard Money Lenders in Texas
December 9, 2015sensationalized the rehab and flip business, making it seem like it’s easy cash
for anyone who jumps in. The truth is, you have to have a keen eye for
investing, and know how to evaluate the home before you get started, especially
when you’re using Texas hard money lenders.
Homes that have fallen into disrepair can be an investor’s dream. A seasoned pro can size up a home fairly quickly, and make an educated
assessment as to whether it will provide a solid return on investment after all
the work is complete. This evaluation is often the largest determining factor
in whether someone is successful in the fix-and-flip business, so it literally
pays to do the research ahead of time.
- Include any contract fees and the loan costs from your Texas hard money lenders in your total expense estimates.
- Consider what the repairs should cost. Some
investors swear by a $20 per square-foot rule when it comes to cosmetic
renovations. While this may be a good estimate, finding the right contractor and vendors can save you a lot of money. Also, think about things you may be able to do yourself or have a contact in the field already that can help you save money.
- Calculate what the home will be worth after repairs. To do this, you’ll need to research what comparable homes in the area have sold for over the past 90 to 120 days. They should be in a similar neighborhood, have the same number of bedrooms, bathrooms, and square footage, and also be about the same age. You can use apps like Zillow or check out a real estate website to find comparable homes.
How to Tell if a Flip Using Texas Hard Money Lenders will Be Successful
There are no guarantees when it comes to
real estate investing and flipping houses. Even experts in the industry get burned from
time to time, so you have to leave yourself wiggle
room. The amount you offer for the home should be enough that after you pay
fees, repay your Texas hard money lenders, and cover repairs, that there’s enough money left to reimburse you
for your efforts. You should try to build in a cushion when make an offer. Have fast access to cash through your Texas hard money lenders can give you room to negotiate.
You should only borrow from Texas hard money lenders if you’ve done the
research and you’re familiar with potential rehab pitfalls.
decision based on knowledge of the housing market, and in making repairs with
the hope to turn a profit. Not every rebab is worthwhile. If you’re just
starting out, choose the simplest projects, and include professional
contractors in your budget. You can test your knowledge in rehabs by scouring a
neighborhood, and making your own predictions of what houses will sell for once
they’ve undergone renovations.
Fix-and-flips aren’t for everyone, and getting started in the industry requires
real estate knowledge, as well as a solid background in home repair and
estimates. Texas hard money lenders
can provide the short-term cash you need to make a deal, but you’ll need to
have the knowledge to ensure you’re making a wise investment. If you have these
things in your own mental toolbox, fix-and-flips can be incredibly lucrative.
Dennis Dahlberg
Broker/RI/CEO/MLO
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
dennis@level4funding.com
www.Level4Funding.com
23335 N 18th Drive Suite 120
Phoenix AZ 85027
