Buying, Selling and Holding Arizona Apartments at the Top of the Market

The Phoenix metro area is currently one of the healthiest real estate markets in the country. It’s particularly a great time to invest in a residential property with multiple units (apartment building) right now, especially if you plan on flipping that property for a profit or holding it and renting the units out to tenants. Here are a few tips worth following to make sure you’ll always stay at the top of the market when it comes to Arizona apartments:

Take the Current Climate into Consideration

Though our real estate economy is strong right now, the current climate is very much a “sellers market”. This means there is a lot of demand to purchase apartments, and so as a seller you are able to price your property higher and get more gross profit in return. If you are fixing up a property and plan on selling it, make sure you do so relatively quickly because things will not always stay this way. Depending on your current financial situation, you may want to consider doing a 1031 exchange to delay your tax liability.

Likewise, if you are planning to buy, you should be prepared to shell out a bit more than you might have originally intended because you’re buying in a sellers market. You also need to do your research to make sure you’re still paying an appropriate amount and will meet your ROI (return on investment) goals if your intention is to buy and sell or rent out. That said, while it may seem like a good idea to wait to purchase until prices go down, the truth is that there’s no telling exactly when that will happen. Besides, wait too long, and there’s the very real risk of losing the property to another buyer.

Know That It’s All About Location

Even though Phoenix is a strong real estate market overall, not every piece of property here is a worthwhile investment. The “hottest” areas to sell in are those that already have been established as a longtme desirable location or those that are “up and coming” or “transitioning” neighborhoods. Renters and buyers will always be most drawn to areas they can see a future in.

If you currently have a property you are interested in selling or renting out, take a look at the surrounding area and recent real estate sales history. This will give you a more realistic look at what you can sell the property for. In many cases, it may be higher than you initially thought! In situations where the estimates are lower, you may be able to save yourself from doing some expensive renovations that are otherwise unnecessary.

Make Sure You Have the Right Financial Backing

Whether you’re buying apartments, looking to fix up and sell apartments or are simply looking to increase the value of your current property, it’s important to make sure you have the funds to do so. After all, the last thing you want is to get caught in the middle of a project without the financial means to finish it! Waiting too long to finish can even mean missing out on the current sellers climate. Getting a bank loan is one way to remedy the problem, but it takes a lot of time to apply and get approved. Even upon approval, there may be stringent rules of the loan that you have to follow.

It’s therefore worth considering far more flexible and fast-approval options, like a hard money loan. Contact the Barrett Group today to learn more about your hard money loan options and how we can help you achieve your real estate goals.

Growth Continues in the Greater Phoenix Area

The Greater Phoenix area has come a long way from its humble roots when it was created as a farm town back in 1881. If you aren’t from the area, it’s difficult to believe that Phoenix actually ranks number five on the list of the biggest cities in the United States.

The state of Arizona is considered one of the fastest growing economies in the entire country, with Phoenix at the top of the list. According to information from a recent U.S. Bureau of Economic Analysis State Data, the state is among the top five when it comes to fast growth, having an increase of 4.3 percent in total gross domestic product. Considered the most populous city in the state, the area of greater Phoenix is still a huge part of this growth and there is no sign it’s going to slow down any time soon.

The greater Phoenix area’s job market is also seeing significant growth. Recent statistics make it clear that the state of Arizona, as a whole, is going to outpace the country regarding job growth, with most of the opportunities being available in the capital of the state. Excluding the area of Phoenix, Maricopa County, there may be an increase in 2.1 percent in overall employment growth each year, with the greater Phoenix area experiencing an increase of 1.5 percent. What may be surprising to many people is that the job market has grown in some less than expected areas. Before the recession, the majority of the job opportunities were derived from construction, retail sales, and real estate. Now, however, business and financial services, along with manufacturing and healthcare, are meeting if not outpacing the industries that have been previously mentioned. Also, Phoenix has been dubbed as the “Wall Street West,” and it is ranked as number three on the list of different cities that have the highest number of workers in the financial sector.

The specific statistics surrounding job growth are further supported by the increase in overall demand for total office real estate, which actually outpaced the supply in 2018 according to information provided in the Phoenix Market Outlook Report that was conducted and then published by CBRE Research. The report also read that the net absorption has been outpaced by the supply since 2011 and is further pushing down the total office space vacancy from the recessionary peak that was 26.2 percent to 15.2 percent in quarter four of 2018.

Office space has not been the only portion of the real estate market in Phoenix that’s in high demand according to the above-mentioned report. There’s been a higher demand for multifamily housing which has outpaced the new supply for eight years in a row and has pushed down the increase from the recessionary peak which was 11.6 percent to under 4.5 percent during 2018. Approximately 8.300 new units, primarily employment centers and submarkets were added into the market, which is now up from the 6,300 new units created in the previous year.

With a beautiful and sunny state and a growing economy this state offers a vibrant community. The greater Phoenix continues to provide countless opportunities for both visitors and residents to enjoy virtually all hobbies imaginable.

How to Maximize ROI On Your Arizona Hard Money Loan

What’s the point of a fix and flip house project if you’re not going to get back everything you invested in it and more? After all, flipping a house the right involves not just the initial hard money loan financial investment but your own time, physical effort and even various other expenditures along the way. Fortunately, there are various measures you can take to make sure that none of this ends up being a waste of time.

Here are some fairly simple tips you can follow during the selling process to make sure that you are maximizing your return on investment:

Seize the Advantages a Hard Money Loan Has to Offer

By utilizing a hard money loan in lieu of a traditional mortgage or other bank investment, you actually have multiple advantages that other financial avenues may not offer. For example, hard money loans offer both conveniently fast approvals and flexible terms. This means you can get started on your fix and flip project much faster and can use the time that you need to make sure the project gets done right. And because the collateral for the loan is usually the property itself, you have the convenience of not having to make constant payments to a bank or having to come up with other assets.

Take Some Great Photos or Hire a Professional Photographer

Think about how you’re going to draw in prospective buyers. These days, people often browse through dozens– if not hundreds– of real estate listings online before they finally narrow down a list of houses they would like to see in person. It is therefore important to not just write up a great listing that can be posted on various high-traffic real estate sites, but also to post some appealing photos.

If you have a high quality camera and have an eye for great lighting and space, you may be able to take professional-looking photos yourself. If not, you may want to consider hiring a professional photographer to come do the job for you. After all, the photos are arguably the most important part of any real estate listing, and a great one can be the difference between prospective buyers clicking to see more and scrolling on past.

Stage the House for Showings

Selling the house is the very last stage of a fix and flip project. So why stop putting in effort now? Stage the house to make it look like a home, not just a project. You don’t need to go filling it up with furniture and hanging pictures, but putting in at least some home items will help. After all, people are better able to envision themselves living in a place if they see some furnishings already in place.

To keep costs low, consider picking up some nice-but-cheap furniture from Goodwill (always make sure it is clean before putting it inside the house). If you won’t miss it during the showing process, you can also borrow some furniture from your own home.

That said, you might also want to consider enlisting the help of a professional staging company if you really want to go the extra mile. Often used by realtors, these companies require minimal effort on your part and will stage the house for you to make it look like a real attractive home. When a house is staged right, you are more likely to get a higher selling price.

Consider Hiring a Professional Real Estate Agent

Let’s be real– you’ve already put in a lot of effort on your own by this point, and if you’re like many people you probably want to see your fix and flip project right on through to the very end. While it is certainly possible to sell the property all on your own, the truth is that you are far more likely to attract buyers (more specifically, high-spending buyers) if you enlist the help of a professional real estate agent. They can get your listing on high-traffic websites more easily and can use their industry connections to get the word out to local realtors working directing with buyers.

While you will have to pay a fee to a realtor, the truth is that using one is the best way to bring in as much revenue as possible.

 

Arizona Fix and Flip Tips

Fixing up and flipping a house is a great opportunity to make a substantial profit, but only when it’s done right. A lot of people get into this business thinking that a few coats of paint and maybe some new fixtures is all it takes to flip a house for a fast profit, only to find themselves either stuck with a property they can’t sell or construction and repairs they can’t finish. And in booming real estate markets like Phoenix AZ, it can be a simple matter of ignoring the local weather conditions the property is in and not making repairs accordingly.

If you have no prior experience in fixing up houses, you may want to consult with an experienced contractor. That said, it is possible to take things into your own hands if you’re willing to put in the time and effort required. In Phoenix (and other parts of Arizona), you’ll also need to take into account the hot and arid climate before making any repairs or modifications.

Here are some tips you can follow to make sure your fix and flip job is done right:

Install Drought-Friendly Appliances

As anyone who’s lived in Arizona for a while can tell you that droughts are common. You’re probably already planning to put in some new appliances to up the property value, so why not boost your house’s appeal more by installing some water-saving appliances?

The good news is that there are more water-saving appliances available these days than ever before. The main ones you’ll likely want to look into are low-flow faucets and shower heads, as well as double flush toilets (toilets with different flushing power available).

Consider Alternatives to Water-dependent Plants and Lawns

We all want great curbside appeal, and the front yard is a huge part of that. In some cases, it can be more of a selling point than the house itself. But here in the Phoenix region, it just doesn’t make sense to invest in a lush green lawn with grasses that require heavy watering, nor is it worthwhile to have a lot of other foliage that requires a lot of water to survive. So, stick to plants that thrive in desert climates like cacti, California lilacs, yucca plants, etc. Some examples of drought-resistant glasses include Bermuda grass, Buffalo grass and Bahia grass, but there are actually a surprising amount of low-water varieties out there.

You may also want to user stones as decoration or even tasteful, contemporary ornaments for extra pops of color. If you really want to boost the home’s value, look into building in tiered plant or rock beds (adding dimension can add just as much value or even more than a traditional open lawn).

Make Ventilation and Interior Shade a Priority

Especially in hot, desert regions like Arizona, the home should serve as an oasis against the bracing heat and dry air. Buyers will flock to your house if air flows freely through it and they can escape the dangerous temperatures outside.

With these things in mind, you may want to install new windows or a sliding door that allow for plenty of air flow. Take a look at the existing ventilation system too, as it may be due for some updates.

Putting in some nice thick doors will also help keep the house insulated and cool. They will also instantly add much-desired value to the property, especially since this is an area where a lot of people tend to skimp on.

To make sure the house is kept as comfortably cool as possible, make sure that the walls are properly insulated as well. A lot of buyers will also appreciate it if the windows already come with some good quality shades or blinds that block out bright sun and heat.

Make Sure You Have the Finances You Need to Complete Your Project

One of the biggest things you can do to ensure a successful fix and flip project is to secure the financing you need ahead of time. Hard Money Lenders Arizona makes it easy, with fast approval rates and a simple application.

Have more questions about how you can make your fix and flip house ideal for the Phoenix market? Or just want to get started already with your investment? Contact us at Hard Money Lenders Arizona today. We’re here to help make your house flipping dreams become a reality!

Differences in Arizona Fix and Flip Loans

Fixing up and flipping a house can be a lucrative investment, but first you need the investment. In the state of Arizona, many savvy investors use what are known as “fix and flip” loans to purchase and then quickly renovate a property to get ready for sale.

Keep reading to learn more about fix and flip loans and to determine what type may be the right choice for you and your project.

Why a ‘Fix and Flip’ Loan?

You may be wondering why you should consider a fix and flip loan as opposed to a regular bank loan. Well, fix and flip loans actually come with many advantages over traditional loans.

To start, fix and flip loans are intended for shorter designated periods of time and can even be approved faster than traditional bank loans. Experienced fix and flip lenders also do not require as much background investigation or have as stringent qualification standards as traditional banks, giving people a greater likelihood of getting approved.

Types of Fix and Flip Loans

There are three main types of fix and flip loans in Arizona. These include the following:

  • Hard Money Loan – this is highly convenient type of loan that is intended for people of all skill and experience levels (when it comes to flipping houses). Funds are approved (within 24 hours) and received quickly, allowing projects to get underway fast. While these types of loans do often come with higher interest rates, they usually include shorter terms that many people use to make a profit off of their house quickly.
  • Home Equity Line of Credit loan – A Home Equity Line of Credit or “HELOC” loan works kind of like a credit card. The investor is given a designated line of credit that is based on their existing property’s value. While the project is underway, interest is only charged on the amount borrowed during the credit line period. Now, it is important to note that this type of loan usually comes with repayment terms that may not be right for everyone: interest-only payment for the initial 5-10 years, followed by both interest and principal payment. Furthermore, while interest rates are lower, approval can take up to a month or longer.
  • Bridge Loan – This is a temporary short loan that is used only during the gap between real estate transactions. In other words, you can purchase a house you intend to flip without having to sell another property first. Interest rates are usually mid-range, but it’s worth pointing out that this type of loan often results in the investor having to pay two mortgages at once. And while the loan period is shorter, approval time may still take a bit longer than a hard money loan.

Which Loan is Right for Me?

The right kind of fix and flip loan for you will depend on a few different factors, namely your personal experience in flipping houses, the amount of time you have and the type of property. For example, those who need to close extremely quickly may benefit from a bridge loan, while those who need longer terms may look to a HELOC loan.

Nevertheless, hard money loans will be the right way to go for many due to this type of loan’s lenient requirements and fast approval / fund delivery. If you already have your project planned out and need financial assistance fast, this will likely be the best choice for you.

Are you ready to learn more about how a fix and flip loan can get your project underway? Contact the experts at Barrett Financial Group today!

Understanding Hard Money Lending in Arizona

Most people are well familiar with the traditional types of bank lending many individuals use to finance purchases like homes and vehicles. However, when you’re interested in real estate investing, there are other options you should explore. In Arizona, hard money lending is a viable option to help you more easily purchase the properties you want to use as either rental properties or to renovate and flip for a profit. Regardless of what type of real estate investing you’re interested in getting involved in, it’s essential to have a firm understanding of what hard money lending is and how it can benefit you.

What Is Hard Money Lending?

Traditional loans often require extensive credit checks and income verifications in order to be approved for the loan. This is where hard money loans are different. These loans are typically asset based and simply require you to have a valid property to put down as collateral. Hard money loans are most often obtained from individual investors or companies that specialize in this type of lending, rather than more traditional banking institutions. This means they aren’t likely to complete any of the income verifications and credit checks typically used to determine loan eligibility. Instead, they will look at the property you are interested in buying and put money up to fund the project as an investment. You are able to get the funds more quickly than traditional bank loans, but it’s essential to remember hard money loans are used for a shorter time, making them ideal for those who purchase properties, fix them up and sell them for a profit. In most situations, they are used to increase the value of the property.

How Do They Work?

When you’re ready to take on one of these real estate projects, you’ll need to put together a proposal that includes current details about the property, such as the purchase price and what type of property it is. This information must be presented to a prospective lender in order to let them see what they are investing in. However, it’s not just about the current state of the property. They will also want to know what types of improvements will be made, how much those will cost and a projection of the increase in value. This can help them decide whether your project is worth the investment. Rather than being concerned about your financial ability to pay back the loan through credit checks and income verification, they are far more interested in the value of the property and what kind of turnaround it will see. Because of the way these hard money loans are set up, if you fail to pay back the loan in the agreed upon timeframe, they are able to seize the property and sell it themselves to regain the money they’ve lost. This is why a collateral-based hard money loan can be beneficial to all involved without worrying about credit and income guidelines usually used to determine loan eligibility.

It’s important to note hard money loans typically only last between a few months and three years, giving you enough time to improve a property and sell it for a profit. Because the timeframe is so short, you can also expect higher interest rates, ranging between 10 and 18 percent. While this may seem like a disadvantage, the potential in this real estate investment opportunity far outweighs the interest rates.

All You Need To Know About Arizona Construction Loans

Whether you’ve recently purchased land you want to build on or are currently considering it, you’ll most likely be in need of a construction loan. Here’s everything you need to know about getting a construction loan in Arizona so you can get quickly on your way to building your dream home!

What is a Construction Loan?

A construction loan is a specific sum of money that you will use to fund your building project. Like most other types of loans, a construction loan is paid back gradually in installments, according to pre-set rules laid down by the lender. Construction loans are often paid out by the lender in installments as well, usually as the project goes along and hits specified milestones.

Why You Shouldn’t Just Get a Regular Loan

You may be wondering why you shouldn’t just apply for a regular (lump sum) money loan that can be used for general purposes in order to fund your construction project. However, there are some great reasons to apply for a specific Construction Loan as opposed to a regular loan.

Because the loan is focused entirely around a construction project, the funds are released in stages as the project moves along. This helps you keep on track and stay within your budget, and it also means you will actively be using the money instead of getting approved for it and then just letting it sit (which happens all too often with regular loans). Furthermore, construction loans often come with more flexible terms than regular loans, allowing you to pay it back after the project is completed rather than expecting payments before you are done.

Consider a Hard Money Loan Instead of a Bank Loan

When it comes to home construction, a hard money loan is often the way to go instead of going through a bank. A hard money lender has less stringent rules on how the money can be used and when it needs to be paid off, giving you more time and flexibility with your project. While a hard money loan can sometimes cost you more in the long run than a bank loan, you are also more likely to get approved for one. This is because hard money lenders look more at the project’s potential and its likelihood of being completed rather than at personal credit scores and financial history.

Bank construction loans meanwhile have more stringent standards and can be difficult to get approved without either making significant changes to the construction plans or having a really solid credit and financial history. These types of loans are often “one size fits all”, and if you do not fit into their specific box of requirements, you will not get approved (and even if you do, the pay-back requirements can be very strict). Hard money construction loans are meanwhile more lenient, and they focus on the project as a whole rather than the specific person.

How to Apply for a Construction Loan

Banks require a ton of paperwork and documentation of financial history prior to approving you for a loan, but hard money lenders usually only require their application to be completed and do not need as much paperwork. That said, you will still need to outline your project and be able to show how you plan to achieve your construction goals. Bank approval can take days if not weeks, but approval from a hard money lender can come within 24 hours. Following approval, your property and project will still need to be appraised to ensure you are getting the money you need and that everything is in order.

Construction Loans Can Be Used for Land As Well

It’s worth noting that construction loans can also be used for purchasing land to build on (although they may sometimes have an add-on termed “land loan”). This can be very helpful if you are still in the initial stages of your project but have a clear idea of what you want to achieve. Once approved for your loan, you can buy the property of your dreams and start making your construction goals come to life!

Have more questions? Talk with a lender today about your options!

Top 10 Tips to Sell Faster in Phoenix

It’s only natural to want to sell a property as quickly as possible. Whether you’re flipping a house or are selling the place you’ve lived in for years, finding and securing a buyer quickly allows you to move on faster and not have to wait for a big payoff.

Visit any bookstore or do a quick Google search, and there’s tons of literature on the art of selling property. However, a lot of it is full of vague information and tedious steps that don’t help you sell quickly. While you don’t want to cut out necessary steps, there are measures you can take to sell quickly and smoothly.

Follow these top 10 tips to selling faster in Phoenix, and you’ll be signing over your property in no time!

1. Make Sure All Maintenance & Improvements Are Complete

A lot of people make the grave mistake of listing the property prior to all renovations, maintenance projects and landscaping being completed. While it can seem like a time saver to list the property when it’s almost completed, doing so often boils down to some wishful thinking and a misunderstanding of how long these projects can actually take. Showing the property before it’s finished (and this also means being thoroughly cleaned inside and out) can also lead to lower bids being offered.

2. Take Quality Photos

Having great photos of your property is among one of the most important things when it comes to selling, because these are what actually draw potential buyers to the property. While you don’t necessarily need to hire a professional for this, all of the photos should be high resolution and well lit. Make sure there are no mop buckets or cleaning products left around, and if there is furniture, it should be clean and well staged.

3. Make Sure the Price is Right

It’s a good idea to discuss what the price should be with an experienced real estate agent, or if you’re selling on your own (not necessarily the fastest way to sell, but still doable), do your research on what similar properties in the area have sold for. You don’t want to be overpriced, but you don’t want to undersell either. Buyers will be quickly attracted to a property that is reasonably priced and fits what they expect to pay in the area.

4. List on MLS

Your local Multiple Listing Service or MLS is your best bet to sell the property quickly. This will give the property more exposure, and it can easily be done through a broker or real estate agent who works in the area.

5. Read the Market

Once your property listing is up and running, it is important to pay attention to how it performs early on. If you’re not getting as much interest as you’d like, it could be because of something you can easily fix (like getting better photos or supplying more information). Talk to your agent about how things are going on the buying side of things, and see if there are any comments coming through that you can use to your advantage.

6. Be Smart About Lowering the Price

Going along with the above, sometimes one of the adjustments you’ll have to make is lowering the price. However, a dramatic drop in price can look bad, and too many price reductions can also turn buyers away. If you’re going to lower the price, it should only be done to meet market standards and should be done as sparingly as possible. You can discuss what the best strategy is here with your real estate agent.

7. Only Accept Offers with Lender Approval

When you do start getting offers, you should only look at ones that come with an approval letter from the buyer’s lender. The last thing you want to do is accept a bid quickly only to find that the buyer doesn’t actually have the funds to back it up, as this can end up costing you time and money.

8. Go with the Best Offer

Contrary to popular belief, the best offer is not necessarily the one that offers the most money. Instead, it is the one with a responsible buyer who will close on time and is financially qualified. They already have lender approval, and they are prepared with all the documentation they need. Oftentimes, the first offer you receive is the best one, but it is still important to review these qualities in each offer you are considering.

9. Be Prepared for the Inspection

Most buyers won’t close without an inspection being completed, and in many cases they will have specific details they want looked at (like the foundation, water heater, electric outlets, etc.) to make sure the property is up to code and safe as well as valuable. Be prepared for this ahead of time so you aren’t caught off guard.

10. Complete the Appraisal

The final step is letting your property be appraised. This process can go faster if you have gotten a previous appraisal report that you can provide a copy of, as it will help the current appraiser do their job more efficiently (and better understand your pricing).

Top 10 Tips to Selling Faster in Phoenix

It’s only natural to want to sell a property as quickly as possible. Whether you’re flipping a house or are selling the place you’ve lived in for years, finding and securing a buyer quickly allows you to move on faster and not have to wait for a big payoff.

Visit any bookstore or do a quick Google search, and there’s tons of literature on the art of selling property. However, a lot of it is full of vague information and tedious steps that don’t help you sell quickly. While you don’t want to cut out necessary steps, there are measures you can take to sell quickly and smoothly.

Follow these top 10 tips to selling faster in Phoenix, and you’ll be signing over your property in no time!

1. Make Sure All Maintenance & Improvements Are Complete

A lot of people make the grave mistake of listing the property prior to all renovations, maintenance projects and landscaping being completed. While it can seem like a time saver to list the property when it’s almost completed, doing so often boils down to some wishful thinking and a misunderstanding of how long these projects can actually take. Showing the property before it’s finished (and this also means being thoroughly cleaned inside and out) can also lead to lower bids being offered.

2. Take Quality Photos

Having great photos of your property is among one of the most important things when it comes to selling, because these are what actually draw potential buyers to the property. While you don’t necessarily need to hire a professional for this, all of the photos should be high resolution and well lit. Make sure there are no mop buckets or cleaning products left around, and if there is furniture, it should be clean and well staged.

3. Make Sure the Price is Right

It’s a good idea to discuss what the price should be with an experienced real estate agent, or if you’re selling on your own (not necessarily the fastest way to sell, but still doable), do your research on what similar properties in the area have sold for. You don’t want to be overpriced, but you don’t want to undersell either. Buyers will be quickly attracted to a property that is reasonably priced and fits what they expect to pay in the area.

4. List on MLS

Your local Multiple Listing Service or MLS is your best bet to sell the property quickly. This will give the property more exposure, and it can easily be done through a broker or real estate agent who works in the area.

5. Read the Market

Once your property listing is up and running, it is important to pay attention to how it performs early on. If you’re not getting as much interest as you’d like, it could be because of something you can easily fix (like getting better photos or supplying more information). Talk to your agent about how things are going on the buying side of things, and see if there are any comments coming through that you can use to your advantage.

6. Be Smart About Lowering the Price

Going along with the above, sometimes one of the adjustments you’ll have to make is lowering the price. However, a dramatic drop in price can look bad, and too many price reductions can also turn buyers away. If you’re going to lower the price, it should only be done to meet market standards and should be done as sparingly as possible. You can discuss what the best strategy is here with your real estate agent.

7. Only Accept Offers with Lender Approval

When you do start getting offers, you should only look at ones that come with an approval letter from the buyer’s lender. The last thing you want to do is accept a bid quickly only to find that the buyer doesn’t actually have the funds to back it up, as this can end up costing you time and money.

8. Go with the Best Offer

Contrary to popular belief, the best offer is not necessarily the one that offers the most money. Instead, it is the one with a responsible buyer who will close on time and is financially qualified. They already have lender approval, and they are prepared with all the documentation they need. Oftentimes, the first offer you receive is the best one, but it is still important to review these qualities in each offer you are considering.

9. Be Prepared for the Inspection

Most buyers won’t close without an inspection being completed, and in many cases they will have specific details they want looked at (like the foundation, water heater, electric outlets, etc.) to make sure the property is up to code and safe as well as valuable. Be prepared for this ahead of time so you aren’t caught off guard.

10. Complete the Appraisal

The final step is letting your property be appraised. This process can go faster if you have gotten a previous appraisal report that you can provide a copy of, as it will help the current appraiser do their job more efficiently (and better understand your pricing).

Tips For Estimating Arizona Rehab Costs

Flipping houses is an exciting and lucrative business – if you’re good at getting the right estimates of rehab costs. If you want to be a pro, you need a system. This comes with experience and after some time, it will be easy for you to walk through your fix and flip project and quickly and precisely asses the rehab costs, including labor and materials. Keep in mind, however, that material prices fluctuate over seasons. There are so many variable, steps, choices, and work that goes into a rehab project that you’ll want to make sure you do it right – right from the beginning.

Ready to learn the tips and tricks of the trade that will turn you into a pro? Read on to find out.

Material Costs

After your walk through, make a list of the materials you need and visit your local supply stores to compare prices on paint, tile, flooring, lumber, windows, doors, and more. From here, you can contact local lumber yards or other stores to find competitive prices. Expect to shop at a few different stores. You’ll probably find yourself buying paint from one store and lumber from another. Keep in mind that there’s a difference between working with the big box stores and specialty stores. For one thing, the owners of specialty stores are “specialists” and have the expertise to help you pick the right materials. Not everyone working at big box stores fits into this category.

To save money, talk with a manager about membership benefits and pricing. The more work you do, the more chance you’ll have of negotiating a better price for your materials.

Time is Money

Have you ever replaced a roof or renovated a full size bath? Do you know how long these projects take? If you’ve answered “no” to these questions, take a step back and do some research before you tackle a rehab project. For example, installing a new roof should only take a few days, but there are contractors out there who will tell new investors that it will take two to three weeks. In fact, many projects can be done quickly on a rehab flip. That’s why it’s important to know the exact time it should take for a project – you are paying labor costs after all! – before hiring a contractor.

Base Estimates on Function and Category

Typically, you would think to categorize your expense by project. You’d add up everything needed for the kitchen remodel, the master bath renovation, etc… But this method isn’t the best way to go about a rehab. Instead, list by function and category, like plumbing, flooring, electrical, and windows. Put it into this perspective: you don’t hire a kitchen contractor. You hire a plumber. You’ll hire a carpenter to do your trim work. An electrician to do your electric work.

Once you draw up a Scope of Work using this method, you’ll easily see the flow of the project and what order it needs to be done in. This will help you know whether your contractors are on schedule and what materials to have on hand and ready to go.

Don’t Forget the Finishes

After knocking down walls, ripping out countertops and putting everything back together again, you’re done. But hold on, don’t forget about trim and finishes. All that work you put into your rehab project still needs some added touches. In fact, these extras add value to your property, make it more desirable to buyers, and overall improve the aesthetics of the property. This means that when you’re creating a Scope of Work sheet, you’ll want to include estimates for things like doorknobs, door stops, outlet covers, baseboards, and miniblinds. This is a somewhat expensive part of the rehab process, so it’s important to have it properly estimated for materials and labor in the beginning.

If you’re new to flipping properties, it’s always better to start with a smaller project rather than a gut job. This way, you can ease into learning about calculating the costs of a rehab project and scheduling the contractors you’ll need to help get the job done. Take heart, however, by knowing that the learning curve for flipping properties is steep. It won’t take you long to figure out how to work this system and turn every rehab flip into a profit. Finally, prepare for the unexpected. Every job will hold a surprise for you so be sure to have a contingency budget tucked away.