Featured Post

The Big Show is Coming to Town.

Don’t do it…it’s a big mistake flipping homes can cost you a lot of money . Every week the house flipping circus comes to town and adve...

Friday, July 30, 2021

Fix and Flip do’s and do not's. How to make a lot of moola flipping homes

 The true cost of flipping cannot be calculated using a simple equation but is instead the result of countless variables that change from deal to deal.

How much does it cost to flipping a house in Phoenix Arizona? The answer ultimately depends on the investor’s intentions and how he or she will address any unforeseen circumstances.

The cost of flipping a house loans in Phoenix Arizona is almost certainly worth it if the profit margins suggest as much.

The cost of flipping is more closely related to a moving variable than a fixed expense. If for nothing else, it is impossible to formulate a universal equation to pinpoint the exact cost a flip will incur. It is worth noting, however, that while the individual costs may be difficult to account for, there are broader expenses that can make the task of estimating a rehab deal much more manageable.

The Average Cost To Flip A House in Arizona

As I already alluded to, there is no ubiquitous formula to account for every expense your next flip will incur. There are simply too many variables and personal preferences to account for––each of which may be as unpredictable as the last. To that end, no two properties are alike, and the cost of flipping will vary significantly from market to market, let alone property to property.

Simply put, the cost of flipping is contingent on too many unpredictable expenses for investors to remain confident in a universal answer. That said, there are broader expenses that investors may not be able to pinpoint exactly, but it certainly helps to budget for them. Even if you do not know exactly how much they will be, those costs include, but are not limited to:

Much to the chagrin of active first-time buyers, the cost of purchasing a home isn’t relegated to its initial price point. Sure, the cost of acquisition is the largest cost to flip a house, but it is by no means the only cost investors will incur when purchasing the home. There are actually several costs investors must take into consideration when buying a home. The purchasing cost is, therefore, the culmination of several expenses––the most prominent of which is the purchase price. As any investor will tell you, however, there are more costs you should be on the lookout for:

  • Paying Off Any Liens
  • Title Search Fees
  • Property Taxes
  • Insurance
  • Commissions
  • Rehab & Repair Costs

The cost of flipping increases dramatically when you include individual rehab and repair costs. That said, rehab and repair costs are often the hardest to account for. A typical rehab could have anywhere from a few rehab and repair costs to countless expenses. The best any investor could really hope to do is account for as many as they can. To give yourself an idea of what to expect, here are some of the most common rehab and repair expenses over the course of a flip.

Common Interior Construction Costs

Paint: There is really no reason not to include interior paint in your rehab budget, as a single coat can transform an entire home for the better.

Hardwood: Few changes help a rehab more than the floors, so consider adding hardwood floors to your own budget. That way you will be sure to “wow” potential buyers.

Kitchen: Includes cabinets, countertops, backsplash, plumbing, electrical, sink, garbage disposal, faucet, and additional amenities.

Appliances: Includes refrigerator, range, range hood, dishwasher, and microwave.

Bathroom: Include vanity, countertop, mirror, sink, faucet, tub, surround, shower, faucet kit, towel bar, fan, lighting, basic plumbing, and electrical.

Framing: Be sure to account for additional framing that may be necessary or any walls that may need to be torn down. Every change you make to the framing will break into your budget.

Insulation: Normally an afterthought, it is never a bad idea to properly insulate your new deal. That way it will be more efficient, and perhaps attract more buyers.

Walls: Be sure to account for damaged walls and ceilings.

Doors And Trim: Not unlike the paint job, doors are relatively inexpensive and can transform an entire property in a matter of hours.

Common Exterior Construction Costs

Roof: While not always necessary, it could be well worth your money to replace the roof. At the very least, a new roof will increase curb appeal, and perhaps even your bottom line.

Siding: In the event the home you are flipping has siding, you may need to make some fixes, or perhaps even replace it altogether.

Masonry: It is common for stone and brickwork to require a bit of TLC, so be sure to factor even small fixes into your budget.

Painting: Every rehab, in my opinion, can benefit from a fresh coat of exterior paint.

Windows: Replace windows if need be; they will make a huge difference in the final product.

Landscaping: Landscaping can dramatically increase a home’s curb appeal, which can never be underestimated.

Concrete And Asphalt: A good rehab budget will account for any cracks in the local concrete or asphalt.

Wooden

Amenities: Do not forget to check fences, pergolas, and decks for any work they may need.

Common Mechanical Construction Costs

HVAC Unit: Whether you need to add a new HVAC unit or repair an existing one, this is an important cost to account for.

Light Fixtures: Simple as they may seem, new light fixtures can change the feel of an entire house, so they are worth budgeting for.

Electricals: Many old houses may need a new electrical panel installed or require you to update the electricals throughout the house, altogether.

Water Heater: Every home needs a functioning water heater, so make sure the house you are flipping is ready to go.

Holding Costs Hard Money Loans for Auction Property Phoenix Arizona

As their name suggests, holding costs identify the expense one will incur from maintaining control of a property. More specifically, investors will run into expenses the moment they buy a house. To that end, holding costs are the expenses that will occur by simply keeping the property up and running. Holding costs may include, but are not limited to:

  • Loan Repayment Fees
  • Insurance
  • Utilities
  • HOA Fees
  • Property Taxes

While holding costs will not necessarily break, they bank, a proper budget will account for each expense. The more accurately you can pinpoint the cost of flipping a house, the better.

Selling Costs

No house flipping cost spreadsheet, or budget for that matter, is complete without the costs one can expect to incur from selling the home. That said, do not forget to account for selling costs when it comes time to calculate the cost to flip a house. Selling costs can amount to a large sum, and are the culmination of several expenses:

  • Attorney Fees
  • Real Estate Commissions
  • Property Taxes
  • Miscellaneous Fees
  • Marketing
  • Escrow

All things considered, selling costs can amount to several thousands of dollars and need to be factored into the average cost to flip a house.

Cost Of Flipping Summary

The cost of flipping cannot be broken down by a simple formula, nor is there a universal equation that will solve all your expense problems. There are simply too many variables to account for and unforeseen circumstances that may arise, but I digress. A genuinely great investor knows the idea is not to pinpoint the exact cost of flipping, but rather to ballpark it. And since it is nearly impossible to pinpoint the exact cost of a flip, the next best thing will do: an estimate.

Are there any unexpected expenses you have run into over the course of a rehab? Please feel free to let us know what we left out in the comments below.

We look forward to helping you make a lot of money in real estate investing.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel: 623-582-4444
Level4Funding.com

Private Hard Money Lender
Dennis@Level4Funding.com

Who is this Dude? Dennis brings with him substantial experience in residential real estate. Dennis has extensive experience purchasing, renting, and selling numerous homes over the past 45 years. His first purchase was a property in California when he was 18 years old.   Dennis graduated from California State University Pomona with majors in Computer Science and Business Management. He is a Licensed Mortgage Broker, Licensed Mortgage Originator, Licensed Real Estate Agent, Licensed Insurance Agent Certified Sort Sales Specialist (CSS), Certified Negotiator (CNE), and FAA Licensed Private Pilot. 

Thursday, July 22, 2021

Financing for your next Fix and Flip, Private Hard Money Lender near me

 

Hard Money Lenders

Funded by private businesses and individuals, hard money lenders near me provide short-term, high-rate loans for real estate investors. This financing option, which does not conform to bank standards of creditworthiness is typically used by rehabbers looking to renovate a property.

Hard money financing is generally determined by the value of the investment the property itself, with lenders analyzing the “After Repair Value” (ARV) to determine the size of the loan. Hard money lenders near me generally will not fund an entire deal but rather fund a percentage of the purchase price or the after-repair value, which will range from 50 to 70 percent.

Hard money lenders also charge fees apart from the interest on the loan. These fees are generally delineated in points (three to five), representing additional percentage fees based on the loan amount. In general, hard money lenders Phoenix Arizona charge much higher interest rates – sometimes double the amount of a traditional mortgage, plus fees. In the end, all hard money lenders near me will have different requirements, and real estate investors need to be fully aware of what they are getting themselves into.

Private Hard Money Lenders near me

Private hard money lenders near me Phoenix Arizona are integral to the growth of every new investor. They have the means and intent to invest capital into your business and they are just as interested in working with you as you are with them.

Generally speaking, private money lenders near me Scottsdale Arizona will provide investors with cash to purchase real estate properties in exchange for a specific interest rate. These terms will generally be established upfront and with a specified payback period – anywhere from six months to a year. These loans are most common when investors believe they can raise the value of a particular property over a short period of time, typically through renovations. It is also important to understand that private money lenders near me Las Vegas Nevada should only be used when you have a clearly defined exit strategy like hard money.

Seller Financing

There are some scenarios when both an investor and a seller can strike up a mutually beneficial seller financing deal. In seller financing, the property buyer will make payments directly to the seller of the property rather than going through a bank. This can help a motivated seller sell the property more quickly. The investor can avoid jumping over traditional mortgage lending hurdles, such as financial and credit score minimums.

Together, the buyer and seller can often enjoy a faster transaction process and avoid many costs and fees associated with the closing process. Furthermore, the owner can sell the promissory note if they no longer want to manage their own owner financing.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel: 623-582-4444
Level4Funding.com

Private Hard Money Lender
Dennis@Level4Funding.com

 

Who is this Dude? Dennis brings with him substantial experience in residential real estate. Dennis has extensive experience purchasing, renting, and selling numerous homes over the past 45 years. His first purchase was a property in California when he was 18 years old.   Dennis graduated from California State University Pomona with majors in Computer Science and Business Management. He is a Licensed Mortgage Broker, Licensed Mortgage Originator, Licensed Real Estate Agent, Licensed Insurance Agent Certified Sort Sales Specialist (CSS), Certified Negotiator (CNE), and FAA Licensed Private Pilot.

Tuesday, July 6, 2021

Top 3 Mistakes Newcomers to Arizona Fix and Flip Loans Make

 Home rehabbers are always on tight schedules, but when you leverage Arizona Fix and Flip Loans as opposed to self-financing, it’s that much more important to keep your project on track. Become familiar with the top three mistakes newcomers make in order to ensure a smooth and profitable exit.

Not padding the timeline. The work of various professionals assisting you are often dependent on the others staying on track. For example, your drywaller may not be able to take over until your electrician is done or your cabinet installer may not be able to work until the tiler has finished. If one early in the chain is delayed, it will set everyone else back too. Sometimes suppliers are sluggish a slow in the market can delay the sale. Always pad your timeline some, so that unforeseen issues don’t push you past your intended exit date.

Not padding your expenses. Having the property inspected by a professional is a must, especially if you don’t have much experience in the area on your own. That said, there are sometimes things you cannot foresee. Perhaps you pull up the carpet and discover mold and water damage or you open a wall and find out the prior homeowner was clearly not an electrician or a plumber but attempted to be one. You’ll likely have a legal and ethical obligation to set things right. Without extra room in your budget, this will eat away at your profits or could even leave you upside-down.

Forgetting about government regulations. After the housing crisis, guidelines for FHA loans changed. This doesn’t impact your ability to get Arizona Fix and Flip Loans, but it may impact who can purchase your home and when. There are a couple of areas to address here. FHA loans can be good for borrowers who wouldn’t ordinarily qualify for a mortgage. The government insures the loan to protect the lender, but the borrower then has additional fees to pay. For this reason, the location you’re working in will impact whether or not your buyers will want this form of financing. If you’re working in luxury homes, they won’t be, but if you’re working in struggling or up-and-coming neighborhoods, they could be. If you are in an area where buyers may need an FHA loan, they will not be allowed to purchase yours until it’s been in your possession for 90 days if your sales price is two or more times what you paid for it.

With Planning and Foresight, You Will Have a Successful Project

The more you work with Arizona Fix and Flip Loans and rehab projects in general, the easier it will become to identify issues in these three core areas and avoid them. However, for your initial ventures, it’s a good idea to give yourself a fair amount of breathing room and simply anticipate there being unforeseen circumstances, so you never fall short on time or money.

Develop a strong network and they’ll be there when you need them.

It can be frustrating when a supplier sends out the wrong thing or delays a shipment, particularly when that makes the schedules of your tradesmen fall like dominoes. However, the more you work with your team and the better you treat them, the more likely they are to prioritize your needs over all the other projects they do. Your Arizona Fix and Flip Loans will go further and you’ll be more successful too.

Make Money with Arizona Fix and Flip Loans

When you want to make a good return on your investment, get Arizona Fix and Flip Loans. They give you more money to make money within the real estate market.

Flipping homes is a huge trend right now because it makes people big money. You can see how much money it makes people by just Googling it.

The problem is that many people do not have the cash to invest in the real estate market. They can’t buy the investment property – the home they need to fix to flip.

This is where Arizona Fix and Flip Loans come in to help.

How to Use Arizona Fix and Flip Loans to Make Big Money

You can use Arizona Fix and Flip Loans easily to make big money. These loans are specifically for buying a home that you will fix up and then sell for more than you paid for it.

The homes you purchase to fix will need a decent amount of work, but that is okay. It is well worth the effort and time you put into it when you can make tens of thousands of dollars more than what you paid.

The process is quite easy. All you have to do is find a property you would like to purchase. You can usually get help from a real estate agent. Once you find your fixer-upper, contact an Arizona Hard Money Lender that offers Arizona Fix and Flip Loans.

Since Arizona Hard Money Lenders are private, you can get the money you need to purchase the house in just a couple of days. They will approve you within hours, and then deposit the money into your bank. Since you have the cash to purchase the house, it doesn’t take long to close.

Once you have the house in your name, you can start fixing it and making improvements that will help you sell it for more than you purchased it for. This should only take a couple of months to finish, and then you can put it back on the market.

When the house sells, you simply pay back the Arizona Fix and Flip Loan and pocket the rest of it as profit. You can then move on to buying another one to profit from that one and so on and so forth. Many people are able to make a lot of money by flipping homes, so don’t let this chance pass you by.

It all starts with contacting an Arizona Private Money Lender.

Contact us today for more information on how you can use an Arizona Private Money Lender for Arizona Fix and Flip Loans. Once you have the means to get the cash needed to purchase the house, you can move on to finding your fixer-upper.

We look forward to helping you make a lot of money in real estate investing.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel: 623-582-4444
Level4Funding.com

Private Hard Money Lender
Dennis@Level4Funding.com

 

Who is this Dude? Dennis brings with him substantial experience in residential real estate. Dennis has extensive experience purchasing, renting, and selling numerous homes over the past 45 years. His first purchase was a property in California when he was 18 years old.   Dennis graduated from California State University Pomona with majors in Computer Science and Business Management. He is a Licensed Mortgage Broker, Licensed Mortgage Originator, Licensed Real Estate Agent, Licensed Insurance Agent Certified Sort Sales Specialist (CSS), Certified Negotiator (CNE), and FAA Licensed Private Pilot.