Learn To Be A Fix & Flip Investor: hard money lender in Texas

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Tuesday, April 3, 2018

When is the right time to cut your losses in the real estate business?

The real estate industry can be extremely tumultuous under normal conditions. If you are doing it correctly, you will run into a few extra problems that come with investing. What separates the inexperienced investor from the pro is knowing when to throw in the towel. Now, we are not saying that as soon as you find a water leak in your property you should give up, but you need to be aware of your investment as all times.

For many investors, this means having a solid exit strategy before you are able to commit to a new project. A solid exit strategy allows you to drop one project and go after another within a few days. For some investors, this could be after a certain number of repairs exceed their comfort level. Along the lines of property renovation, an investor could have a financial cap set in place before they decide to pull out on their investment.

Research makes perfect in real estate

An experienced real estate investor takes their time to thoroughly vet a property and the geographic area before making an offer. They will most likely go through an extensive checklist before making a decision. Sometimes hard money lenders in Texas are able to help you with your research, however, most of the legwork is up to you.

Enough research can tell you the right amount of money you should put into the property. Often many investors bite off more than expected with a property. In the event that the repairs begin to outweigh the possible revenue that you are expecting you should begin implementing your exit strategy.

When is time to step away from your investment?

The moment you feel as though you are not going to make any profit on the property is the time you step away. Some investors will tell you to stick it out a little longer, while most will tell you to stick with it. In the long run, you must do what is right for you. Maybe you have expended all the money you set aside for the project.

Most of the time at this point other investors will not want to or be able to help you in your investment. One of the most important details that you want to remember about real estate is timing. Your timing is everything.

Say you ask your hard money lender in Texas for an additional loan from more construction, however, recently there has been a decline in the demand for homes. Now, you have a home that may not sell for the next two or three months. With a hard money lender, usually you will have a fairly short term loans this will not work.

With an exit strategy, you give yourself more options

Allowing yourself to leave your investment if you need to, till ultimately save you thousands of dollars in the end. It may seem like a loss at first, but a loss will hurt much worse if you are left with debt.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Sunday, April 1, 2018

Why some hard money lenders in Texas will turn you away

When Casey moved to Texas, he had dreams of making a name for himself in the real estate industry. He quickly realized it was not as easy as the shows on Bravo make it look. Hard money lenders in Texas are not the only ones that are on the chopping block when it comes to loaning money.

If you have been following Level 4 Funding for a while, you probably have read a few times that it is fairly easy to borrow a hard money loan. This is true, for the most part, when you are looking for a potential lender you are free to pick and choose who you want to borrow from. If a certain lender is offering an interest rate that is out of your range, then find another. If the lender you are talking to is not willing to lend you the money are seeking, you do not have to work with them.

For some borrowers, like Casey, the lender may turn you away if they feel the property is not going to return their money. There are usually certain standards that hard money lenders in Texas look for when they are considering lending someone money for a property.

Someone that is playing to win

The real estate business can be extremely unforgiving if you are not prepared and careful when you are looking at properties. Many lenders will not lend to you if you are not risking anything for the investment. Most lenders expect you to pay a large enough down payment on what you plan to purchase.

This is a sign of good faith that you are willing to stick your neck out for the property so you can recoup your money. In Casey’s situation, he was not willing to put a large enough amount that would suffice the risk that the lender was taking. He could have gotten another person to invest with him, but this was his first property. The down payment was the least of his problems.

When in doubt know, your way out

Most people that get into the business try to look for homes that will have a higher resale value during closing. When experienced investors are looking for a property they can flip for a profit, they make sure they have a plan to pay back the loan if all else fails. Hard money lenders in Texas look for borrowers that have an exit strategy if the property fails to make a positive return.

Casey did not think of this when he was planning on purchasing the derelict duplex in a fairly rough neighborhood. Since many people were moving out and Casey did not have enough money to buy the rest of the city block, it was unlikely the building would have a positive return.

Setting yourself up for success counts in real estate

Planning accordingly with allow you to seek out any lender you choose. For Casey being new to Texas and not knowing how things worked he ultimately failed. Take a page from Casey’s book and remember this: do not be like Casey. Take the extra hour to look up potential investors, and forget about being frugal when it comes to a down payment.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Wednesday, March 21, 2018

Tips for Landing Commercial Loans

Commercial loans are all about risk. Lenders are looking for some very specific criteria before they are willing to approve a loan application.

Commercial loans are more difficult to get than consumer loans because they are often for a much larger dollar amount. Lenders are in business to make money and that means that they must be very selective when lending a large sum of money. Understanding the criteria that lenders use to evaluate applicants and why they have these standards will help you to tailor your documentation to these criteria and show lenders all of the right information about your business.

Lenders are first and foremost concerned with your ability to repay the loan that you are requesting. They want to see long term documentation in the form of profit and loss statements, bank statements and tax returns to demonstrate that your business is financially stable. The might also want to see documentation about other credit which has been extended to your business. This could be in equipment rental, from a supplier of materials, from a property that has been leased or from a vendor. Lenders also favor a borrower who has some cash in savings to cover expenses in the event of a slowdown in business and revenue.

The next big interest for a lender is that the commercial property that you are purchasing has a value greater than the loan which you are requesting. This is because the property will serve as collateral for the loan. In the event that you default on the loan, the lender will take possession of the property and sell it to cover the outstanding balance of your loan. In most cases the loan will only be approved for about 80% of the property’s current value. This is due to the volatility of commercial property values. Having that instant equity in the property assures the lender that even if the property value drops, the loan will still be adequately secured.

Becoming a Personal Guarantor

In some cases a business entity does not have sufficient credit history to demonstrate financial stability. When that is the case commercial loans are secured by a personal guarantor which is normally the owner of the business. The owner needs to be able to demonstrate to the lender that their personal assets and money can be used to cover the loan payments. Again, the lender will need to see documents including bank statements, tax returns and personal net worth statements to verify the guarantor’s finances.

Understand the Lenders Goal

In almost every case, a lender is simply looking at numbers to determine if a loan applicant is a good risk. Knowing this information, it is critical that you show repeatedly that the business is financially stable, has a strong and steady stream of revenue and that you are also financially stable. In addition showing that the business has sufficient cash reserves to bridge a short term cash flow issue will give the lender added confidence in your ability to repay the loan that you are requesting. Approval for commercial loans is based on ability to repay the loan and the financial stability of the business in almost all cases.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Friday, March 17, 2017

What you need to start flipping homes in Texas

When you are beginning your career as real estate investor, flipping homes can be an extremely strenuous ordeal. The rehabbing process of a home in Texas could end up costing you a lot of time and money in the end. You can make a lot of money as long as you take the time out to properly prepare yourself for every investment. There are a few trade secrets that you should keep in mind when you begin.

Knowing how to or someone that is handy.

Rehabbing is not all about buying and selling homes. Sometimes a new or not so new home, calls for you to be able to get down and dirty. Being able to install a common toilet system or a being able to run a wire through a wall are great skills to have as an investor. Like we have stated before, depending on how you are buying a home, often you cannot tour the property prior to purchase. Being able to do certain small jobs on a property can take some of that apprehension away.

On the other hand, you also need to humble yourself, no one person can conquer the world. Play to your strengths and recognize your weaknesses. If you know you have no clue on filling holes in drywall, do yourself a favor and find someone that can do it for you. Having a home that looks nice to a potential buyer trumps any expenses you may incur during the rehabbing process.

Make yourself familiar with your work

When taking on the rehab business, you need to make sure you are always on your game. From what sports history tells us the most prepared player wins the most. If you are a hard money lender in Texas, you need to constantly check how the market is changing. If you are an investor, you need to know what you are looking for. Check the area that you are looking to purchase a home in. Make yourself familiar with the types of homes that are in your area, as well.

Surround yourself with a team of experts that know the business

While you should make sure you are familiar with the business, you should also make sure you have a solid team of experts around you. Should you be handy enough to fix certain small jobs in the home, however, you do need an expert that is able to do the bigger jobs. If you are not familiar with plumbing in the home do not take it on by yourself. You may feel as though you save money, in the long run, it could end up costing more if you happen to mess something up.

You might even think you should solely bankroll your investment by yourself. Having a solid hard money lender in Texas that can loan you the money you need. Give yourself a fighting chance when you start your real estate career. You will have a lot of competition, but if you follow these steps you will ensure your success.

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Thursday, March 16, 2017

Common setbacks new investors run into when buying real estate

There are certain careers that are deemed sexy. For the most part, they fall into two categories; it gives you freedom or you are in a position of power. As a real estate investor, you are able to go in between the two. Most of the time you are able to pick up and do it wherever you want, and likely you are your own boss. This makes real estate investment sexy to most people. It is also the reason many people jump into the real estate investment career path.

With so much competition in the real estate industry if you are not careful you could run into a few walls. In fact, in your first year, you may quit. So, here are a few setbacks you should avoid when you are taking on your first investment.

You want to have someone in your corner

For some people owning their own business is a top priority when entering the working world. For the most part, you are able to do this when working in real estate, but you have to start from the bottom first. It is safe to say that your father did not give you a small loan of $1 million to start your career, so to get ahead you will need a partner. Some newbies may need more than one partner to help them.

Not asking for help on a deal or for information on a new find is a huge mistake. Yes, there will be times when your colleagues in your radar will try to take care of the competition, but you will need those people, as well. It is the symbiotic relationship that you share with other investors that allow you to grow in the business.

Make sure you are getting out of your comfort zone. In California, there are conventions and conferences that you can attend to meet people. Hard money lenders in California frequent these places often. Since you will likely apply for loans this works to your benefit. Having multiple partners that specialize in different areas will help you build your company.

Overestimating the value of a property can cost you money

Once we complete a project it is common to be proud of what we did. It is expected. You spent hours planning on the different type of tile you want for the backsplash. You talked to at least ten hard money lenders in California trying to get a quick bridge loan for the property. Now, you want the recognition for the hard work you put into the home or property you bought. So, you decide to overprice the actual value of the home.

Many novice investors will do this, and it is understandable, but you must also realize the market does not always work the way you want it to. Just because you had to pay a large sum of money at auction does not mean you will get all your money back.

Depending on the economy, geography and a bevy of different factors you may need to lower your price to sell your property. No one said it would be easy, but you have to stick with it to win in this game.

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Some things to know buy a distressed property take a look at this

One of the most common, and most likely the most profitable, ways to make money in the real estate business is to buy older homes that have yet to be renovated. After you buy them you spend a few months, or with the help of T.V. magic, a few days, fixing the property up to drive its resale value. This is called “fixing and flipping.” Many investors start their career in this category since most of the time all you have to do is find and buy a home.

But, before you decide to take on the flipping market there are a few things that you need to acclimate yourself. For example, most of these homes are bought using bridge loan. Bridge loans are usually short term. Most are paid off at the conclusion of a sale, or a few months after the property is listed. Most hard money lenders in Texas will loan you more money if you need it, but for the most part, a bridge loan will suffice.

Now it is time for you to venture into the wild

After you have figured out where you will go to for your loan, there are some more things you need to make yourself aware of. For starters, when you begin looking for a fixer upper, one of the best places you can find a property that you can flip is an auction. Most of the time you will not have to pay an insane amount. Even though the homes may look like they survived a few wars, most investors will make great finds.

Most of these auctions are held during or after the homes have foreclosed. Often the auction is organized by a trustee. The trustee is the person that holds the note on the property; this could be someone that is related to the previous owner, or it could be a hard money lender in Texas. Some investors do have an easier time at these auctions since they automatically know what they are looking for.

If you are inexperienced with the auction platform you should go to a few dry runs before you start bidding. If you plan to go to an auction you should also note that you will not be able to go inside the property beforehand. This makes it a toss-up; you could find a diamond or a lump of coal.

If you want a better option you could try an REO

An REO, or real estate owned foreclosure, is like the nice twin of the two. Basically, it is like an auction, however, the lender actually owns the property. Say you have worked with a hard money lender in Texas for a few years and they recently acquired a new property. Depending on the strength of the relationship you could have a first look at the property.

With an REO, you are able to go through the property and look around. Usually, you would make an appointment with the lender and walkthrough. While this may seem like a better option you are essentially held over a barrel. Since the lender has some skin in the project you may have to pay full price. You should meet with your fellow investors before going through with either option.

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Wednesday, March 15, 2017

When is the right time to cut your losses in the real estate business?

Research makes perfect in real estate

An experienced real estate investor takes their time to thoroughly vet a property and the geographic area before making an offer. They will most likely go through an extensive checklist before making a decision. Sometimes hard money lenders in Texas are able to help you with your research, however, most of the legwork is up to you.

When is time to step away from your investment?

Say you ask your hard money lender in Texas for an additional loan from more construction, however, recently there has been a decline in the demand for homes. Now, you have a home that may not sell for the next two or three months. With a hard money lender, usually you will have a fairly short term loans this will not work.

With an exit strategy, you give yourself more options

Technorati Tags: hard money lender in texas,hard money lenders in texas

Why some hard money lenders in Texas will turn you away

When Casey moved to Texas, he had dreams of making a name for himself in the real estate industry. He quickly realized it was not as easy as the shows on Bravo make it look. Hard money lenders in Texas are not the only ones that are on the chopping block when it comes to loaning money.

For some borrowers, like Casey, the lender may turn you away if they feel the property is not going to return their money. There are usually certain standards that hard money lenders in Texas look for when they are considering lending someone money for a property.

Someone that is playing to win

When in doubt know, your way out

Setting yourself up for success counts in real estate

Technorati Tags: hard money lender in texas,hard money lenders in texas

Learn To Be A Fix & Flip Investor

Featured Post

The Big Show is Coming to Town.

Tuesday, April 3, 2018

When is the right time to cut your losses in the real estate business?

Sunday, April 1, 2018

Why some hard money lenders in Texas will turn you away

Someone that is playing to win

When in doubt know, your way out

Setting yourself up for success counts in real estate

Wednesday, March 21, 2018

Tips for Landing Commercial Loans

Becoming a Personal Guarantor

Understand the Lenders Goal

Friday, March 17, 2017

What you need to start flipping homes in Texas

Thursday, March 16, 2017

Common setbacks new investors run into when buying real estate

Some things to know buy a distressed property take a look at this

Wednesday, March 15, 2017

When is the right time to cut your losses in the real estate business?

Why some hard money lenders in Texas will turn you away

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