The first step is finding the right property, in the right market and neighborhood. Often investors in this type of real estate will find properties at auctions as a result of a foreclosure or a short sale by a bank. The purchaser may try and sell the property “as-is” or try and improve the property and sell it. Renovating a property comes in many shades from renovating a home, major construction, or simply fixing up the cosmetics.
There are many facets to consider in order to be successful with the fix and flip investment model. It’s important to be knowledgeable about the market in order to secure a property at the right price. You must be able to secure comps of the neighborhood homes. Then, as a Construction Manager, you must assemble a team of sub-contractors that you can manage to execute the improvements on the property. Finally, you must secure a loan from a bank or hard money lender. Because of the paperwork involved as well as the time it takes to fund, a bank may not be the best way to secure a loan.
1. The purchaser is obtaining a highly sought after distressed property. Financing is needed right away in order to beat the competition, and the lengthy bank application process may take too long.
2. Traditional banks require your credit score to be examined carefully. If yours is less than stellar, a Hard Money Loan in Arizona will get your foot in the door of the fix-and-flip world.
3. The bank may be reluctant to lend money on a fix-and-flip model.
Bridge loans are a type of loan that fix-and-flip investors often turn to. Bridge loans are secured by the property and are short term in nature. If you have a need for timely capital for an investment that is fairly quick to completion, bridge loans may fill this need.
There are various projects that investors use Fix-and-Flip Loans in Arizona for. Some of them include the following:
· Purchase –You can purchase a property from a seller who is in need to sell quickly. These often come with deep discounts. With minor renovations, you put the property back on the market
· Renovation – An old single-family property comes onto the market. The property needs renovation to make it more appealing as well as painting and you put it back on the market quickly to sell it.
· Construction- There is a dilapidated single-family home on a piece of property that you have the opportunity to purchase. You demolish most of the existing structure and replace it with a 2-story residential house which you intend to sell.
· Collateral- The property, land, business, or even an existing home separate from the can act as collateral. In the case of a default, the lender will take ownership of the collateral.
· Duration- Fix-and-Flip Loans in Arizona are short term in nature, mainly 12-24 months.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
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.