Learn To Be A Fix & Flip Investor

Wednesday, March 29, 2017

3 Things to Keep In Mind While Taking a Commercial Loan

Congratulations! You are one of the few entrepreneurs who has successfully started their business. However, to succeed and sustain in this extremely competitive market, you will need a smooth stream of capital. Thus, before you start looking for commercial lending options, make sure to keep your future growth and ROI in mind.

With a new business venture, the primary goal is to make sales, generate revenues, and make a healthy profit. The issue with businesses is that the market is volatile with several opportunities that need to be cashed. Looking and seizing the right opportunity can thus take your business a long way.

Before approaching a firm for commercial real estate loans, here are three things which you should keep in mind:

· Look at the bigger picture

If you are new in the business fraternity, it is easy to sit back, relax, and rationalize the future once the money starts flowing in. You could be thinking of a company who would grant you commercial loans to grow bigger and faster. The task seems easy, but the bad news is that it is not.

Before reaching this point, you should think if you are ready for all this. Things might be smooth for the time being but always look at the bigger picture. You should plan a few months ahead, look at finances carefully, and then plan your next move.

· Find the right option

Once you have decided to escalate things and approach a commercial lending company, make sure that you are open to sharing everything with the concerned party. The commercial loan option will be interested in having a look at your business finances and a few other things to evaluate the condition.

· Hit the bull's eye: Go ONLINE

In the present era, everything you desire is easily accessible online. Hence, there are high chances that you will be looking for the right commercial loans options online. So why not try one that will cater to your commercial lending requirements.

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 lending,commercial loans,commercial loan,commercial real estate loans,commercial real estate loan

Self-assessing your needs for Commercial lending- 5 questions that should be answered.

You have a feeling that your business calls for expansion but you are not sure if it is feasible! Do you really think it’s time for getting some loan?

Commercial lending or loans often face challenges of immediate approval. Imagine you are an artist who sells small sculptures online. Now your clientele is big enough that you might need a shop or commercial space to setup your business. For that you need to get a real estate commercial loan to buy or rent the space. Here are 5 questions you should expect from the lender when you are applying for commercial loans:

How much investment you require? If you thought figuring out the required investment was easy, think again. It’s not just a number but a thorough working is required. From the rent of space to cost of equipment; from furnishing to buying raw material, all details matter. So before you get stuck with the wrong loan amount do your research.

Why do you need it? Evaluate each and every detail. If you think you have enough equipment and you just need space, go for the exact amount. Identifying reason for the accurate amount allows controlling your capital and investing it in right direction.

At what time, money is needed and would it be feasible for you to work with a certain portion? Some businesses cannot work without certain amount of investment but others can be operational with a smaller percentage of it and afterwards you can cover them down the line. So ask yourself again before getting a loan.

Do you have clean credit history? Lenders always want to play safe when lending you money. They will dig into your credit history to investigate if you are good decision maker with finances and what you have been doing wrong.

Can your business gain profits? If they are lending you money, they need to be sure that you are going to win the market. They won’t prefer working with typically old ideas. You need to work on feasibility and viability of your business. Plus, you need to look confident about it, if not; you are going to lose your commercial loan.

Get your answers prepared and you won’t be disappointed. If you do your homework right, you will know what you need and how big it should be.

Technorati Tags: commercial lending,commercial loans,commercial loan

Tuesday, March 28, 2017

7 tips to be successful for your first or next fix & flip.

There are alot of people getting into the fix and flip business. Here are some tips that I’ve discoverd when I’ve talked to flippers over the past decade.

1. Know Your Area – There are all sorts of things a fix and flipper should know about the area he is flipping. The prices of similar homes that have recently sold in the area are only part of the equation. You have to know the schools, the traffic, if the neighborhood is expecting any major changes, and other details that make it attractive to buyers.

2. Know The Market – The fix & flip market is ever-changing, and even neighborhoods and subdivisions follow their own trends. You have to be able to make accurate predictions on what the property will be worth once the renovations are complete. Are there other rehabs to compare to?

3. Over Estimate? Whether you’re taking out a hard money loan or saving up your own cash, you must set aside funds for unexpected expenses. Sometimes necessary repairs don’t become apparent until the renovation is underway, and other times they can prove to be far more costly than the budget allows for. Overestimate or have a reserve account built into your budget.

4. Understand Holding Time – When you fix & flip real estate, having a solid timeline in mind is essential. Knowing how long you have to complete a project, and keeping everything on schedule, can make a huge difference in the amount of profit you see. Also factor in the amount of time to sell the home once completed.

5. Be Aware of the Industry – From bidding, through buying, renovating, and selling, you’ll need to be in contact with numerous professionals. Create relationships you can count on, hard money lender Texas finding the cheapest does not always make you the most money. Fix and flip projects are about reliable timely resources and professionals that follow through.

6. Finding Pros- While some start-ups do all the renovations independently, there are numerous professionals you may need to call on at some point to get an expert job done fast. Electricians, plumbers, contractors, painters, hard money lenders Texas and other helpers are beneficial, but you’ll need to establish relationships with trustworthy people before you begin.

7. Get Educated - Most Successful flippers have one thing in common - They are Licensed Real Estate Agents.

Technorati Tags: fix and flip,hard money lenders texas

Monday, March 27, 2017

Top 6 Reasons To Have a Hard Money Lender

Sometimes it can be very hard to find a trustworthy and reliable financing option, especially when you trying to purchase or refinance investment property. Despite the availability of the traditional sources of financing via banks, venture capitalists, among others, it might still not work in your favor. Most of these traditional lending institutions tend to take a long time to approve the loan and usually require you to undergo a very stringent evaluation process. They also take lots of factors into consideration, such as your credit score, and your repayment capacity which leaves for a very little chance for loan approval. On the other hand, hard money lenders don’t rely entirely on such factors.

Unlike the traditional lending institutions, hard money lenders basically offer investors the opportunity of borrowing short term loans; usually anywhere between 6 to 60 months, depending on the situation and individual lending company.This makes a trusted hard money lender essential for any real estate investment team. Whether you are new in real estate investment, or you are a seasoned veteran, it is very important to have a trustworthy hard money lender on your team. Actually, there’s nothing more advantageous to any real estate investor, than fostering good relationships with the hard money lenders.

The best real estate investment opportunities are normally captured by the investors who are well prepared. The best deals usually present themselves sporadically, and most times, there are usually many other interested parties. As a real estate investor, you need to move swiftly, and you can do this by obtaining short term financing from a hard money lender. That being said, lets now take a look at some of the other reasons why it is great to have a hard money lender you can trust.

6 Reasons Why It’s Great To Have a Hard Money Lender You Can Trust

Faster Approval

As aforementioned, most real estate deals are usually time sensitive, and using hard money lenders is the best way of ensuring that you get quick funding whenever necessary. Unlike most traditional financial institutions, applications for hard money loans involve much less paperwork. Hard money loan applications are usually only about four pages of basic information and can be approved very quickly once they have been filled and then returned to the lender. This allows real estate investors to take advantage of opportunities which might come up at any given time. A trusted and reliable hard money lender will provide you with quick assistance and help you obtain hard money loans to purchase that property or even refinance investment property.

More Versatile

One of the main reasons you should have a hard money lender on your team is their versatility. With hard money lenders, it is possible for an investor to have a lot more negotiation room of the loans terms. You can be able to tailor a repayment schedule to fit your particular needs; this gives you the chance of investing in a variety of different deals and commit to deals which you find most lucrative. This increased versatility, combined with the fast approval, allows you to take full advantage of the opportunities which would have otherwise passed you by.

No Need For Perfect Credit Scores

Hard money lenders are usually equity based lenders, meaning that they are mainly concerned with the real estate value which will secure that loan, and less concerned with the borrower’s credit scores; When it comes to obtaining loans from a commercial hard money lenders, the collateral, and the business plan is much more important than the credit scores.

Convenience

Applying for a mortgage is time-consuming. It can take many months to close on loans, which can put you at risk of losing out on that particular investment property. Fortunately, with hard money loans, it is possible to get the much-needed funding in a couple of days or weeks. This is important especially if you are funding a large scale development project, and you do not want any deviations whatsoever, from the set timeline to completion.

Less Stringent Terms

Unlike most traditional financing institutions, hard money lenders normally have their very own sets of rules and regulations which make it easy and quick to approve the hard money loans for the borrowers. In addition, the hard money lenders are much more open-ended in nature, which means you can talk to them and discuss the terms which will best fit your particular needs. This can include varying the loan amount based on the investment property or the renovations which the property needs.

No Prepayment Penalties

Well, in life even the best-laid plans are subject to change. If your deal happens to go well, the very last thing you want is getting penalized for the success. Unfortunately, most traditional financial institutions usually tend to charge hefty prepayment penalties when circumstances change, and the loan is partially or fully repaid before the set date. Hard money lenders are always fully invested in your success, and they typically structure the loans without any prepayment penalties. This is another great reason to have a trusted hard money lender on your team.

Technorati Tags: commercial loans,commercial real estate loans

Top 6 Reasons to Purchase and Invest in Apartment Buildings

Commercial real estate loans (also abbreviated as CRE), can be defined as any offering of retail, office, industrial, and such other commercial spaces which can be leased (and at times bought), for business use. Commercial real estate can be broken down into various different categories. At the high levels, when you think of types of CRE, you normally think about the office buildings, warehouses, or shopping centers. But in actual fact, commercial real estatecommercial real estate encompasses much more than the aforementioned property types. Below are the different types of commercial real estate;

-Office properties: These include, but not limited to; single tenant buildings, skyscrapers, small professional buildings, and everything else in between. The office buildings are generally classified into one of the 3 categories; the Class A, Class B, or Class C. The classifications are largely dependent on the context. The Class A office buildings are considered to be the best in terms of location and construction. They are usually new buildings with great infrastructure and superb management. The Class B office properties may possess high-quality construction, however, they lack a desirable location. They are normally well managed and well maintained, but may lack proper infrastructure. They make a great investment for commercial real estate investors since they have the potential of high returns on investment through renovations and improvements. The Class C office buildings are basically everything else. They are usually much older buildings, poorly located, and usually require extensive updates and renovation. They also have low rental rates.

-Land; There are 3 categories of land; Greenfield land, Urban Infill land and Brownfiled land. The Greenfield land generally refers to the undeveloped land like a pasture or a farm. The Urban Infill land refers to the land which is located in the city and has been previously developed but is now vacant. The Brownfield land refers to land which was previously used for commercial or industrial purposes, but is now available for reuse. Brownfield land is usually environmentally compromised and requires significant clean up for it to be utilized. That being so, commercial lenders generally prefer land that’s in the path of some future developments.

-Retail; Retail properties can be free standing like the banks or the restaurant buildings. They’re usually found on lower floors of the office properties or multifamily structures.

-Industrial; Industrial properties can range from the smaller properties which are usually known as flex space or R & D properties to large warehouses and heavy manufacturing sites.

-Multifamily; These can include an apartment 4plex, sprawling apartment complexes, high-rise condominium units, among others.

-Others such as hotels, public houses, sports facilities, medical centers, nursing homes, hospitals, car washes, self-storage, theme parks, theaters, bowling alleys, marinas, and even funeral homes, also fall into the commercial real estate category.

After learning about the different types of commercial building available, let’s now take a look at some of the reasons why you should invest in commercial real estate;

-Stable income; One of the major benefits to CRE investment is that the assets are normally secured by the leases that provide a regular/steady income stream, which is significantly higher than your typical stock dividend yields. Unlike the short-term leases for the residential real estate, commercial property leases generally range between 3-10 years.

-Expenses are paid by the tenants; Another great reason why you should invest in commercial properties is that the tenants normally pay the building’s operating expenses; this is especially true in the triple net leases which are very common in the commercial real estate industry. The tenants pay the base monthly lease payment, along with their prorated portion of the property’s expenses, property insurance, real estate taxes, and even maintenance.

-Appreciates in value with time; Commercial Real Estate (CRE) investment generally has excellent appreciation in value as compared to other types of properties. Some of the ways for adding value to the commercial property include, but not limited to; upgrading, renovating, improving the appearance, enlarging, or even restructuring the lease. This also means that commercial property investment carries much less risk than the residential property or stock market.

-Higher income potential; Commercial loans attracts much higher lease payments or rent, per square foot as compared to the residential real estate. This means that an investor has much better chances of earning much more income from a CRE investment.

Technorati Tags: commercial real estate loans,commercial real estate,commercial loans

Top 6 Reasons to Purchase and Invest in Apartment Buildings

When people hear about the millions and billions of dollars investors make buying and selling properties, most of them think about duplexes and homes. A good number of people do not know much about buying apartment buildings.

The benefits of investing in apartments are out of this world. Investing in apartment buildings can be one of the best ideas even when the economy is going sideways. Even though there are advantages and disadvantages to every kind of investment, investing in apartments in not a bad idea. As part three of our apartment building blog posts, here are some of the top reasons to invest in apartment buildings.

1. Predictable source of income

The reason many investors prefer buying apartment buildings is because they provide a very steady source of income. When you choose properly, and in a good location and area, apartments will always provide cash flow every month. Most businesses come and go especially in office, retail and warehouse properties. But people are always looking for a place to live.

2. Apartments provide a more affordable housing option

When we get into all economics that explain why apartments provide a cheap housing option, there are so many things to talk about. For example, the difference between the amounts of paying rent and mortgage payments most consumers spend every month is called a gap. Now, if the average rent is $800 per month and the average mortgage is $1200. The gap is 400. When the gap increases, very few people can afford to buy a home. This means they will choose apartments to live in. If mortgages increases the gap becomes bigger, and we experience greater demand for apartments. This is another good reason to purchase an apartment building.

3. Property appreciation

The value of the apartment is based on the Net Operating income the building offers to the investor. The good thing about apartment buildings is that you can escalate the value of the building without investing in new windows, carpet, siding or paint.

When you decide to increase income, reduce expenses or even both, you increase the value of your property. For instance, if the average Cap Rate in the area is 10%, and you increase the Net operating income by $1000 annually, you have definitely added $10,000 to the value of the property. The Cap rate (capitalization rate) helps to measure the ratio between the net operating income and property’s buying price. Cap rate involves three variables that include value, interest rate percentage, and the net operating income.

Hence, the lower the Cap rate percentage, the lower the net operating income will be. If interest rates fall, it is uncommon it see the rates fall, but when interest rate increases, the rates will follow. You can do this by raising rents and reducing expenses. This is one of the most protected secrets of investors.

4. Principal Reduction

Another benefit of apartment building purchase is a principal reduction. Your equity automatically increases each month in apartment building. This is because your tenants are paying the mortgage on your property with their rents. When you receive the monthly rents, you pay out expenses, and then pay the mortgage. With such payments, you are gaining equity and also increasing your wealth.

5. Taxes

Fianlly, another benefit from commercial loans on apartment buildings are that they provide the best tax benefits. In taxes, apartment buildings benefit in two ways: through depreciation expense while you purchase the property, and you can sell the property and re-invest the proceeds into a new property, you will not pay the taxes on the gain. You can never try this with mutual funds or stocks.

6. Numbers do not lie

If you decide to purchase a family home, your expenses consist of taxes and insurance. But that does not mean other expenses do not exist. There will be turnover, resident problems and the like. For example, if you have 10 houses, you have 10 roofs, and probably 10 utility bills, tax statements and remember the time you will be spending from one property to the other.

When you purchase apartment buildings, expenses will include taxes, utilities, insurance, management and much more. But you get to spread out the cost of maintaining the property across all units. It is cheaper to own an apartment building than buying a house.

Technorati Tags: commercial loans,commercial real estate loans

Glenford’s Spec Home Story—Are Spec Homes Right for You?

Contemplating adding a spec home to your real estate investment portfolio? Weighing the pros and cons and working with professionals can help.

An Experienced Contractor’s Story

Glenford Branham comes from a long line of savvy real estate investors and general contractors. Starting at just 14 years of age, Glenford has been in the construction industry for 57 years. Originally from Kentucky, he moved to Arizona to enjoy the warmer weather. “Construction and real estate is a family tradition,” he says.

Glenford’s built a few houses in his day—around 40. After his wife passed away last year, he decided to “do something a little different” by tackling a spec house project. He called his go-to contact Tony for assistance with the mortgage loan, but spec home financing is simply not an option at most traditional banks and mortgage brokers.

Tony recommended Glenford work with Private Hard Money Lender, Level 4 Funding, touting the group’s impeccable track record, quick service and competitive pricing. Glenford was sold, picked up the phone and called Mark Gowlovech.

As a general contractor, Glenford also handles commercial construction and is always on the go. He’s actively coordinating several construction projects, all while raising his 12 year old granddaughter by himself. With no time left for added headaches or piles of paperwork Glenford was happy to lean on Mark for the heavy lifting and speedy service his hard money loan request needed.

Speedy Service

Mark swiftly took the reins and got Glenford the financing he needed for his latest real estate project. Glenford smiled as he shared he just received the project permit and would be diving into the construction process shortly.

Glenford was satisfied with his Level 4 Funding spec home loan experience, thanks to Mark. Though this was his first transaction with Level 4 Funding, chances are it won’t be the last. Glenford will be back when his next spec home or specialty project calls.

A Contractor’s Advice

Glenford is a man of few words. When asked to summarize his experience with Level 4 Funding and share advice regarding lending and investments, he said:

“Get with someone you trust to help you

with your lending and your business.”

Pointed advice from a seasoned general contractor, with so much incoming work he has no need to advertise. Glenford trusts his projects to Level 4 Funding, and recommends calling Mark for your next spec project loan.

Are Spec Homes for Right for You?

Speculative homes, commonly referred to as spec homes, are of course houses investors build with the intent to sell for a profit. Some builders prefer to deal in spec homes, and avoid the complications and time needed to customize a project for a specific home buyer.

Review the pros and cons below to help decide if building a spec home is the right investment move for you.

Pros

Moderate Risk: Don’t let their risky-sounding name fool you—spec homes can actually be a fairly conservative investment. Of course you must have or be an experienced builder to confidently secure a tidy profit or conservative turns to risky.

Reputation is Everything: Builders know that spec homes are a reflection on their quality of work and highly visible in the marketplace. Shoddy work will quickly show, and negative news spreads like wildfire. To preserve and showcase their reputation, builders typically take great care to perform their best work on spec homes. Great news for investors and homeowners alike.

Generous Profit: Profits on spec homes vary based on house location, type, and size, but many investors strive to net a 25% profit. Others follow a “sell two, build a third for free” rule of thumb, with a target net of 33% per project. No matter where you fall in this range, spec homes can indeed be lucrative. Just ensure you’re properly estimating and tracking expenses and using the most trustworthy partners you can find.

Cons

Builder Biffs: End up with a disreputable builder and your project stability begins to crumble. Costs can creep up, profits sink down and in a worse-case scenario you’re stuck paying expenses for a property you can’t sell. Or can’t sell for a profit. Do your homework and ask around to ensure a reputable builder is on your side to increase safety and peace of mind.

Customized Competition: Once your spec home is ready to sell, you’ll be competing with custom built homes. Spec homes are intentionally built following rather “vanilla” formats as builders have no idea what customized features the buyer would want. Keeping costs down without sacrificing quality is their primary concern. Your home may lose the battle against a buyer’s ability to choose their specific preferences and build a customized home.

The Great Unknown: Even the most sophisticated and experienced spec home builders can’t predict the future. The real estate market takes twists and turns outside of anyone’s control. One construction company owner built and sold over 20 spec homes in California over a 15 year period. But his spec home profit streak ended when the real estate market headed south and he avoided spec building for 5 years. Now he’s back at it, and his first project sold before it was even finished.

Spec Home Financing Solutions

Decided building a spec home is in your future? Follow Glenford’s lead and call Private Hard Money Lender Level 4 Funding. They can’t guarantee your profits or reduce your project risks, but they can ensure smooth, solid financing solutions available when you need them.

Technorati Tags: private hard money lender,private hard money lender in california,hard money,mark gowlovech

Learn To Be A Fix & Flip Investor

Featured Post

The Big Show is Coming to Town.

Wednesday, March 29, 2017

3 Things to Keep In Mind While Taking a Commercial Loan

Self-assessing your needs for Commercial lending- 5 questions that should be answered.

You have a feeling that your business calls for expansion but you are not sure if it is feasible! Do you really think it’s time for getting some loan?

Tuesday, March 28, 2017

7 tips to be successful for your first or next fix & flip.

Monday, March 27, 2017

Top 6 Reasons To Have a Hard Money Lender

6 Reasons Why It’s Great To Have a Hard Money Lender You Can Trust

Top 6 Reasons to Purchase and Invest in Apartment Buildings

Top 6 Reasons to Purchase and Invest in Apartment Buildings

Glenford’s Spec Home Story—Are Spec Homes Right for You?

“Get with someone you trust to help you

with your lending and your business.”

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