Real estate investors are always looking for the best bargains on loans and homes in order to maximize profits on each property. Looking for a reliable loan underwriting firm that you can count on to deliver great rates that boost your bottom line can feel like a huge challenge. There are thousands of local lenders around and combing through your available options as well as the market for homes itself can be more than a little overwhelming.
That being said, there are some easy steps you can take to boost your profits and reliably finance any home you intend to flip with a little legwork and research.
Consider your finances before investing in real estate.
Many investments don’t require a careful analysis of your financial background. Buying stocks or bonds is a simple transaction, but real estate acquisition is not. In order to earn the best possible returns on your investments in this arena, you have to maintain a well-polished credit score as well as a strong strategy for earnings and long-term growth. This means showing a pattern of saving outside of your investment portfolio. Most Americans (70%) don’t have $1,000 saved in an easy to access account. Regardless of your investment portfolio’s size or length of existence, keeping cash on hand in a savings account is an essential part of healthy personal finance.
These factors are central when banks and private money lenders consider your loan application. For those new to the real estate market, private money lenders like Pacific Private Money may be the perfect loan originators to get you going. Private money is often lent without the lengthy restrictions and the hoops to jump through that come along with traditional bank borrowing. For this reason, private lending allows you to get your application submitted and the funds transferred in rapid order.
Consider properties that only require quick fixes first.
The properties you target for investment should fit within a narrow band of criteria. Homes that require extensive work will slow down the flipping process and require you to sink additional capital into the project. The more time and money you spend on the home the lower your profit margin will be.
Yard upgrades, roofing repair, and painting are all easy and fast fixes that can really transform a home from an average property to a hot commodity. Hiring an Arlington VA roofing company with years of experience in the business and a great customer service record is the surest way that the roof replacement will get you a new and solid roof over a home that can net you a major price increase when you place the home back on the market. Roofs typically last about 20 years, so a new roof is a major draw for anyone looking to buy a home — it means they won’t have to spend this money any time soon so you can ‘recover’ the cost in your asking price without any hassle. Buyers will pay more for that kind of peace of mind.
Another great improvement is in landscaping. A beautiful, green lawn complete with decking and tasteful flowering plants is the perfect way to attract new buyers without a huge commitment to lengthy upgrades (see sodgod.com/hydroseeding/ for more on the benefits of a new lawn to a flipper’s strategy). A lawn replacement can be completed in a long weekend for those with lawn care experience already, and a week at most for those totally new to the rewarding experience of putting down new sod. You could even hire a contractor to do the landscaping if you find yourself busy with other aspects of the home repairs. Asking around for free estimates on landscaping work can give you a good sense of the market in your local area.
Keeping costs on repairs down and quickly moving through your list of necessary upgrades is the best way to move the property back onto the market and get it sold, keeping your profit margin high and your ability to finance the next home in good standing.