Ever tried to evaluate a house before taking out a Arizona Fix and Flip loan? If so you know it’s difficult, because all the considerations can be a bit overwhelming, but lucky for you this article will show you three things to look for when it comes to location, resale value, rehab planning and some other things you’ll need to consider to ensure your success when it comes to flipping houses with Arizona Fix and Flip loan.
Body, mind, spirit, father, son, Holy Ghost it seems that all things have three aspects and the same is true for house flips. No, this isn’t just a mystical principal. This so-called rule of threes has some very practical applications as we’ll see below.
Even if you see a promising listing online, you actually need to drive to the neighborhood and note the overall vibe in the area, considering:
• Noise levels
• And the overall feel of the place.
Houses next to airports, replete with ramshackle gang sings, or in areas where the façade of every house is girded by iron bars don’t sell, or at least they don’t sell for a lot of money. After finding a decent neighborhood you need to find three comps that have sold in three months and consider three things about each of them:
• Time it took to sell
• Initial list price
• Actual price sold for
Knowing these three crucial details about comps in the surrounding area will help you account for three things per your loan, how long it will take to sell the property, a good initial price to list it at, and what the potential returns could be. Once you’re satisfied that a potential flip will sell in short order and for a decent amount, you need to refer back to your three comps and consider three things when planning your rehab:
When planning your project, whatever you include concerning the above, should be in line with your three chosen comps. This will keep your plans grounded in the realities of the market so won’t end up adding an Olympic swimming pool in the middle of a working class neighborhood.
Simply knowing the neighborhood and having three comps in mind will give you a good sense of the resale value, and when the house will sell. In addition, by planning your project around your three comps you’ll also have an accurate sense of just how long rehab will take.
In the context of your loan, having these insights will tell you three crucial things:
1. Whether taking out a loan is worth it based on the resale value of your three comps.
2. How much money you’ll actually need to fix the house up to the standards of your three comps.
3. When your loan will actually get paid off based on the market history of your three comps.
When you apply the rule of threes, evaluating a potential flip before taking out financing becomes easy as well 1, 2, 3.
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.