How Many Houses You Can Realistically Flip In A Year

Thanks to several reality shows, flipping houses has become an appealing way to raise money. It’s true that buying, renovating, and reselling properties can be profitable, especially if you can flip multiple houses in a year. Some people can flip as many as seven houses each year, but amateur flippers may be lucky to flip just two houses.

What You Need to Flip Houses

How many houses you can flip in a year depends on four main factors:

  1. The capital you have
  2. The current housing market
  3. The availability of properties
  4. Your free time

You can have all the money in the world, but if there are no properties to buy or you cannot dedicate time to finding and managing them, you won’t get much done. On the other hand, if your budget is too tight, you’ll struggle to make progress with renovations that will appeal to potential buyers.

Still, it’s possible to manage these factors. For example, if you have enough capital, you can work with a trusted real estate agent or contractor who can take over some of the day-to-day responsibilities of finding properties and making repair decisions. If you find flipping is profitable enough, you could make it your full-time career, which will let you flip more houses.

Experienced house flippers can sometimes flip seven or more houses per year. However, they’ve likely been at it for some time and have the partnerships, connections, time, and funds to make the process go more smoothly. A house might sell in just a few days in a hot market, but there’s no guarantee that will happen–or that the market will remain favorable for long.

Expect the Unexpected When Flipping

Even with that experience, hiccups will sometimes still happen. Supplies might suddenly increase in price or become back-ordered, houses might need unforeseen and expensive work (other flippers may have spotted the warning signs and passed it up), the weather may turn suddenly, workers may sustain injuries, or a buyer’s funding could fall through. These examples can all slow down the work on one flip, preventing you from selling and moving on to the next project.

You don’t want to bite off more than you can chew as a flipper. Don’t back yourself into a corner where you cannot pay your own mortgage unless a house sells. Instead, start with one house and use it as a learning experience. Move on to the next once it sells, and improve your process and profits as you go.

If you want to compete with flippers who may have experience, availability, and capital that differ drastically from your own, a rehab loan can help. Contact Hard Money Lenders to learn more.

What To Consider When Evaluating An Area For Real Estate Investing

Pondering a Real Estate Investment? Keep These Key Factors in Mind

There’s no disputing that a timely investment in the right real estate property can prove highly rewarding for a savvy investor. But what makes a potential property the “right” one? Pay special attention to the following key factors in determining the potential attractiveness of a real estate property.

Cash Flow

Cash flow serves as a crucial consideration if you plan on investing in any commercial property. A business can generate huge revenues and still prove relatively unprofitable if it spends more than it earns. You need to know how much money the property has left over after it pays its ongoing expenses.

Loan to Value Ratio

Loan to value (LTV) is the ratio between how much your lender will give you and how much your property costs. Your lender will use this number to calculate your interest rate. The lower your LTV, the lower your interest rate will probably be, although it might require a larger down payment.

Return Metrics

If you’re investing with the aim of coming out ahead on the deal, the word “return” should figure prominently in your real estate investment considerations. Here are some important return metrics to evaluate.

  • Cash-on-cash return gives you a clear picture of how much cash return you’re earning from your real estate investment.To figure this number, divide the post-mortgage net cash flow by the total amount of cash you’ve got tied up in the investment (including your capital expenditures and your outstanding mortgage balance).
  • Internal rate of return (IRR) refers to the interest you can expect to earn each year off your real estate investment for as long as you hold the property. This calculation uses projected cash flow figures to predict the effects of compound interest on your earnings.
  • Return on investment (ROI) gives you the big picture on how much you’ll likely make off of your investment. Divide your net profit by your original cost of investment to get your ROI percentage.
  • The capitalization rate measures the net income of a real estate property. To get this figure, divide your net operating income by the property’s sale price.

The points listed above are just a few of the considerations that go into intelligent real estate investment. Even when you know what to look for in a potential investment property, you may still need professional help assessing the numbers and making the smartest decision. Hard Money Lenders Arizona has the necessary skills and expertise to guide you through your search, interpret the facts and figures, and assist you with financial funding questions and answers. Contact us today.

Avoiding Construction Delays With A Hard Money Loan

Construction delays are more than just a setback, they can represent a serious financial cost. Delays cost money and this makes getting traditional loans even more challenging.

When problems create delays, you need hard money loans that are responsive and give you the flexibility you need to get your construction project back on track.

Here’s what you need to know about overcoming delays with hard money loans.

Can Hard Money Loans Be Used for Construction?

Hard money loans are the definition of financial flexibility. These funds can help you overcome construction delays, kick start new projects, and tackle any sudden problems with your construction project.

Hard money loans are distinct from traditional loans because they are more flexible and delivered much more quickly. They can also be used for new construction projects.

They are also ideal funds for bridging existing projects. Gaps in funding can create delays and other serious projects. Hard money loans can quickly give you funds that bridge gaps in existing funding and get your project back on track.

Three Key Benefits of Hard Money Loans

There are strong benefits to choosing hard money lenders over traditional loans. These are numerous, but here are a few key reasons why hard money loans offer you strategic advantages.

1. Avoid Construction Delays

There’s a lot changing in the world of home construction. New home construction projects have been on the rise in recent years. This means more competition for supplies and labor. You can avoid delays by getting a hard money loan.

Hard money loans have flexible scheduling and can be dispersed in as little as a few days. This gets you the cash you need to overcome obstacles and move through delays.

2. Easier Loan Process

Conventional lending requires a lot of verification and a long application process. Lenders are reluctant to give up funds they can’t justify, but hard money lenders offer more flexible terms and a simpler process. This allows you to get your funds quickly without having to worry about being denied part way through a complicated process.

3. More Flexibility from Lenders

Even experienced borrowers are often surprised when they learn how complicated the loan process is. There are legal regulations in place that limit what traditional lenders can offer. Hard money lenders are more flexible and can offer funds even when traditional lenders can not.

How to Get a Hard Money Loan in AZ?

If you’re looking for a hard money loan in AZ, you need experienced lenders that know how to handle your specific circumstance. Hard Money Lenders AZ have the experience you need to get the funds that will help you complete your project.

Secrets About Hard Money That Banks Don’t Want Brokers to Know

Banks are reluctant to offer funds to their clients. They have strict rules and limited options for lending. Hard money lenders can offer funds in much more fluid and functional ways.

Here’s what banks don’t want you to know about hard money loans.

What Banks Don’t Want You To Know About Hard Money Loans

Banks don’t want you to have hard money loans because they can compete with traditional loans. Here are the big secrets that you should know in order to take advantage of hard money loans.

1. 5 Day Closing Times

The biggest secret about hard money loans is the closing time. These loans can close in as short as 5 days. You can apply for a hard money loan and have cash in hand by the end of the week.

This is a major contrast to traditional loans, which can take weeks if not months to clear. It is difficult to get the funds you need with traditional loans. Hard money loans offer responsive funds when you need them.

2. Flexible Options for Every Project

The number of housing projects has been on the rise in the United States. This means that there are a diverse set of projects ranging from new construction to house flipping and more. Each of these projects needs funding, but traditional lenders often struggle to get money into these projects.

3. Options for Cash Offers

Hard money loans are closer to cash in hand than other types of loans. This is attractive to clients, contractors, and sellers alike. Hard money loans move faster than other types of loans which allows you to quickly process deals and get your projects moving.

4. Higher Loan Limits

Conventional lenders have strict limits about loan amounts. Hard money loans are based solely on the collateral that the loan is based on. This means that hard money loans have a much higher loan limit than traditional loans.

How to Get a Hard Money Loan

The application for hard money loans is easy and straightforward. You can quickly apply for a loan and get funds in as little as five days.

The best results come from the most trusted hard money lenders. They can quickly analyze your project and offer you a competitive loan that will get you the funds you need to complete your project. Hard Money Lenders AZ can help you get the cash you need to complete your project.

Common Hard Money Questions Answered

Although banks are happy to provide their clients with loans when they can profit from them, their strict rules prevent some people from successfully borrowing money. Fortunately, potential borrowers have another option for securing a loan: hard money. If these loans are new to you, keep reading to learn how they work.

What Is Hard Money?

Hard money refers to a type of loan that uses equity, which can include property and other assets, to secure the loan. A hard money loan may be within reach when a credit-based loan is not. These are usually short-term loans, unlike the long-term borrowing that happens for long-term property loans.

Because hard money lenders cannot use a primary residence as equity in the U.S., they work with business clients.

When Do People Borrow This Type of Loan?

Although some people only consider hard money loans when they’ve exhausted other options, it doesn’t have to be this way. Working with a hard money lender might be the smartest move when you can easily pay back a short-term loan in the near future. For example, some people use hard loans to fund property flips. Once the property sells, they repay the loan and take home the profit.

Borrowers with lower credit scores might consider a hard money loan. Similarly, borrowers who have recently switched jobs might not be approved for a traditional loan, even if they’re high earners. A hard money loan requires equity, not income or employment history. Homeowners may also work with a hard money lender to avoid fines for late payments on an existing loan or prevent foreclosure.

What Are the Risks of a Hard Money Loan?

Hard money loans may have higher interest rates than traditional loans. Additionally, failure to repay the loan may result in loss of property, making hard money loans riskier for borrowers.

How Much Can You Borrow?

Lenders typically often offer up to 65% of the asset’s value as a hard money loan. However, specific lenders and circumstances may impact this amount.

Is Approval Quick?

Yes! While you might have to wait a month to close a loan with a bank, hard money loans can close in five days or less! This puts money in your pocket when you need it quickly.

Are Hard Money Loans Regulated?

Yes, hard money lenders must be licensed in a state to operate. Regulations are typically less stringent than for conventional loan lenders, however. The benefit is that lenders have the flexibility to offer more creative loan options to their clients than most lenders have.

If you’re interested in a hard money loan or have other questions, contact Hard Money Lenders AZ to explore your options.

 

The Residential Real Estate Market: Undersupplied And Rising Prices

There’s never been a more promising, or more challenging, time to invest in real estate. The real estate market is booming, but with rising costs and limited supply it’s harder than ever to find good footing in this market.

Here’s what you need to know to make smart real estate investing decisions in 2022.

Why Are Housing Prices Trending Up?

There are plenty of reasons for why housing prices have been trending up recently. Let’s take a look at a few key market indicators.

The amount of foreclosures are only increasing. The dramatic increase in foreclosures is further troubled by homeowners not having expert help for handling a foreclosure. This causes a drop in the liquidity of the housing market and ties up properties in the foreclosure process.

Another factor to consider is covid-19. The pandemic has created both an increase in demand as well as a drop-in supply for housing.

Real Estate And Supply Chain Issues

The U.S. Department of Housing and Urban Development’s data shows us that housing prices have skyrocketed to historic highs, but buyers have yet to recover to their pre 2008 subprime mortgage crisis levels.

A key factor in this dramatic drop off is the ongoing supply chain crisis. Whether you’re looking to invest in new builds or get materials for renovating worn-down properties, there is a high premium to pay for materials in this crisis.

The Impact On Your Investments

Here are three quick strategy tips to diversify your real estate investments in 2022.

Diversify Into Other Types Of Real Estate

The first thing that you can consider doing is diversifying into other types of real estate. If you primarily have been investing in residential properties, you should consider branching out into commercial real estate. Diversifying your real estate portfolio only makes it stronger.

Change Up Your Geographies

Exploring new geographies is another strong tactic for bolstering the strength of your real estate portfolio. Consider investing in new cities, states, and regions.

Invest Ahead Of The Housing Curve

The current housing market also favors buyers who are ready to handle a fixer up. You can vest ahead of the housing curve by picking up properties that need a little TLC.

Get The Cash You Need To Make Smart Real Estate Moves

You need experienced financial help when you’re making real estate investment decisions. Whether you’re looking for investing advice or a loan to repair and flip a fixer upper, Hard Money Lenders AZ can help.

Reach out to Hard Money Lenders AZ today to learn more about their financial services for real estate investors.

Tips & Tricks To Hard Money That The Banks Don’t Want You To Know

Brokers will work with a wide variety of lenders to cultivate deals and finalize contracts. With established relationships, it can be easy to fall into a repeatable pattern, though this isn’t ideal as every client will have specific financial reasons or situations to stay abreast of.

When dealing with a client struggling to acquire a conventional loan, it might make sense to work with a hard money lender. Hard money lenders like Hard Money Lenders AZ can provide certain benefits that conventional banking institutions don’t want you to know about.

Let’s take a closer look at the ways Hard Money Lenders AZ can help you engineer a successful loan.

Embrace the Turbo Close For An Advantage

Working with a hard money lender can provide a series of benefits that conventional banks might not consider mentioning. Hard money lenders can help speed up the closing process when compared to a traditional banking institution. Consider a buyer who offers a lower deal with a 10-day close guaranteed. The seller might be obliged to take the offer, allowing the process to move along. A conventional banking loan requires nearly 30 days on average to close a loan.

Acquire A More Flexible Deal

Bank lenders are notoriously strict, adhering to parameters that are exceedingly difficult to get around. Hard money lenders will have more freedom when it comes to the types of properties that can be financed as well as the investments allowed. A client can propose purchasing a residential rehab or even a cannabis business with a hard money loan, something that might be more difficult through a conventional banking institution.

Explore Cash Offers

Competition can quickly become overwhelming, so when your client needs a solution a hard money loan might get them one. A hard money loan is similar to cash to the seller, providing a simple deal that can lead to fast closing times. A hard money loan can be the perfect way to speed up the deal for both parties while providing for their needs.

Based Upon Your Equity

Finally, it is worth noting that hard money loans are based entirely on the equity of the borrower. A borrower with an expansive portfolio will be able to easily secure larger loans for bigger projects and commercial properties. Hard money lenders like to look at the broadest view of their potential clients to see if the deal has potential and if there is room for profit.

Learn more about hard money loans when you work with Hard Money Lenders AZ. Specializing in commercial hard money and fix & flip rehabs, Hard Money Lenders AZ can help you find the financial deal that makes sense for your investments.

Real Estate: 2 Years Into A Pandemic

As the COVID-19 pandemic continues to wind down, ingraining itself as a part of daily life, analysts are looking back on its impact on various markets. From toilet paper selling out to people hoarding hand sanitizer, the pandemic’s impact on certain industries was obvious. However, the real estate market saw something of a surprising transformation, machinating momentum in certain areas.

Let’s take a closer look at how the real estate market is acclimating to life as the economy continues its transition.

People Are Done With Nesting

The numbers are clear and a glance out the front door will verify the observation: nesting is over. As consumers regain their confidence in the market and their own willingness to go outside and shop, the economy will continue to transition and rebound. Vaccinations are overwhelmingly available and shoppers are ready to start shopping again. This includes the real estate market where formerly hesitant buyers are returning with a vengeance. Investors are also having a good time buying and fixing up property with support from firms like Hard Money Lenders AZ.

Lessons From the Last Recession

The 2008 housing crisis saw lenders and homeowners lose everything. While the COVID-fueled pandemic hurt the real estate market in certain areas, it allowed lenders to learn and prepare for the future. While a 2008 crisis is unlikely, there are ways that we can use the past to help us weather the present pandemic until it is ended.

  • Consistency – Neighborhoods that featured consistent pricing across the board were more likely to perform uniformly during the housing crisis of 2008. Neighborhoods with outlier properties had more issues maintaining their price point, though this means there are open doors to investment opportunities.
  • City Homes Did Well – Properties that were located closer to the core of communities in the city/suburbs fared better and were quicker to rebound from the ’08 housing crisis. As city living becomes more and more revered, expect areas like Atlanta and Denver to continue seeing growth.
  • Tread Carefully – During the pandemic, certain up-and-coming neighborhoods saw their value tank more often. This was due to investors looking for the ‘next big neighborhood’. As speculation gives way to data, areas that are not on solid footing will be considered a greater risk during times of economic concern.

In the end, The Mushroom Theory sums up the situation the best. We can tell the health of a neighborhood and potential investment property by analyzing its shape, consistency, and nutrition. Mushrooms are stronger in the middle, more consistent in shape and in texture, and nutritious — unless you eat too many.

As an investor, moderation, and analytics are the keys to your success. Talk to the team at Hard Money Lenders AZ for support on your next project!

Increased Rent Pricing in 2021: Short Trend or Here To Stay?

The pandemic triggered what many would call a housing boom. Beginning in early 2020 and continuing into the New Year of 2022, rent prices have risen around the industry by more than 20%. While these numbers are staggering, and certainly an indicator that pent-up demand exists, it has left many people asking – “Are increased rental prices here to stay?”

For entrepreneurs, property managers, and tenants alike, let’s take a closer look at the recent increase in rental costs to see if the change is here to stay.

Temporary Rising Rental Costs or Permanent Price Change?

According to data compiled by the Yardi Matrix National Multifamily Report, it is far too early to make concrete conclusions about prices slowing down or rising in the coming months. As of October 2021, the YMNMR showed that nationwide rental prices were up north of 13% – the highest jump ever recorded by the Yardi Matrix research team.

In line with jumping rental prices, renters throughout the United States saw an average rental price of $1,572 which was a recorded high by the Yardi Matrix. The same data compiled by Yardi revealed that rent rose nearly $180 from Q2 2021 to the present day. The biggest movers and shakers geographically were tied to prices in Phoenix, Tampa, and Las Vegas. Growth in these markets has been driven by a seemingly never ending demand for new property combined with, according to the Yardi team, “pent-up demand, increase in single-family prices keeping renters in place, and rapid migration to markets with low-cost housing.”

For aspiring landlords looking to develop a new line of income, taking out a loan to get into the rental business may pay off. While the Yardi Matrix report would traditionally project rental prices to slowly decrease through March, pandemic-driven changes have left many past trends in stasis. Data compiled by the Yardi Matrix team suggests that seasonal norms from years past may not be the most reliable indicators of future growth.

With that being said, continued inflation coupled with increasing housing demands makes it seemingly clear that rental prices are in a good place for future growth for landlords and investors around the nation.

Contact Hard Money Lenders AZ

Hard Money Lenders AZ specializes in providing entrepreneurs with the financial tools that they need to succeed. Based in Phoenix, Hard Money Lenders offers hard money loans to aspiring entrepreneurs looking to develop their property-based businesses.

Hard Money Lenders AZ supports

  • Fix / Flip Rehabs
  • Commercial Hard Money
  • New Construction / Land Acquisition
  • Buy & Hold Services

The team at Hard Money Lenders AZ prioritizes fast funding, even with bad credit, fueled by effective communication and a track record of proven results. To learn more about these services and to inquire further, simply fill out an application for a loan at your convenience.

Real Estate Predictions For 2022

No matter where you live in the country, the real estate sector has been experiencing interesting trends in recent months. As such, those who are not exactly in tune with the industry may be feeling confused and reluctant to buy or sell out of fear of making the wrong move. Either way, here is a list of real estate predictions for 2022 that are bound to get you headed in the right direction.

Interest Rates

One of the top predictions for real estate in 2022 involves interest rates. In particular, due to the fact that the Federal Reserve accelerated the wind-down of their bond purchasing to respond to inflation issues, they are now in a position to begin raising interest rates early this year. So far, the general consensus is a median of 3 quarter-point hikes with 4 a possibility. This will likely result in a significant jump in housing costs which the average consumer can’t afford. This is especially the case given the overall high unemployment rates and the fact that pay rates are not rising nearly as fast as the cost of housing. Either way, this has resulted in bidding wars for homes of all shapes, sizes, and conditions.

Inflation

One of the most apparent predictions for the real estate market in 2022 is the continued rise of inflation rates. In fact, inflation rates are the highest they have been in over 30 years, with no signs of slowing down. Moreover, although experts assert that the supply will soon catch up with the demand and consumers will soon get a “break” from inflation, there are no signs that the housing market issues will follow suit.

In particular, housing prices will continue to climb, which will also result in the average person paying higher rent. Generally speaking, the fact that rent is drastically rising is prompting more people to become homeowners rather than renters. Moreover, since the housing market is so competitive, this is also causing the cost of owning a home to increase.

In keeping with that notion, since the inflation rates are causing costs to rise, this is also causing us all to have to pay more for goods and services. So, despite the fact that many companies are paying more, these increases are arguably being spent on staple goods and services. So, for instance, if you are a working mom who just received a raise during the pandemic, it is likely that most of your pay increase will go towards gas, daycare, etc.

Ready to Buy a Home

Overall, the state of the housing market is unlike anything we’ve seen in recent years. Nevertheless, purchasing your dream home is still entirely possible. No matter if you need a home loan or simply need assistance overcoming a potential enclosure, your friends here at the Barrett Financial Group are here to help. There is no need to lose your home or miss out on the home you are seeking. Here at Barrett Financial Group, we go above and beyond to assist all our customers and ensure their total satisfaction. Contact us today for a quote and more information.