Private Hard Money Lender in California, Texas and Arizona: Commercial Real Estate: Fix and Flip Tips

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Friday, July 8, 2016

Commercial Real Estate: Fix and Flip Tips

The commercial real estate business has taken a lot of hits in recent years. Depending on the market or the city that you are working in you could go through a hundred different situations. Should you take on the business or you leave it to someone else?

From 2007 to 2009, the commercial real estate market took a huge hit due to the recession. While it is making a comeback it is still difficult to turn around a high yield. In 2007, the housing bubble burst to result in a $8 trillion loss. In turn, as we all know many people were laid off and consumer spending took a drastic decline.

Alas, the U.S. is a very resilient country and has come back very strong. The same can also be said for the commercial real estate business. Even with taking as big of a hit as it did the real estate business is slowly beginning to thrive again. That being said there still is a lot of work to do, and for some this field may not be the right choice.

One of the biggest roadblocks that investors run into is actually financing the property that they want to flip. When the bubble was increasing many lenders gave out no/low doc loans. Basically, potential buyers did not have to provide documentation of their income to the institution. After a while, the mortgages that were taken out were worth more than the value of the property and homeowners could not pay for them. Many first time home buyers and investors now have to deal with stringent credit standards that turn a lot of buyers away. A lot of lenders now are more cautious when it comes to lending a commercial real estate loan.

Financing the property is not the only thing you have worry about in the commercial real estate business.

When it comes to finding a vacant property or even finding someone that is willing to sell their home. When it comes to real estate right now the pickings are very slim. Finding the right property is a large part of the work that you have to put in. There are not many homes that are available for investors to attempt a flip.

Another problem that many investors have is finding the right cities that have an economy that is conducive for commercial real estate. A lot of the hot spots for flipping are in places like Los Angeles, Baltimore, Chicago and Detroit. It is not a requirement to be successful, but relocating your business could be a good idea.

With little options to choose from when it comes to property and vacant buildings competition is a very big part of the business now. If you are just starting out, you want to make sure that you are ready to battle at auctions. You have to be ready to jump on every possible buy that you feel as though you can make a profit on.

So should you join the commercial real estate business?

Short answer, if you can see yourself making a profit in the commercial real estate world then, yes. However, if you get in the business and find yourself barely breaking even or having a hard time finding buyers for a possible flip; you should try a new approach. You want to make sure you understand the market and how it works, as well. Go into partnership with another person to help you as well. Your connections are key in the commercial real estate business.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 

Texas Tel:      (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701    

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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.