House Flipping

Common Problems With Flipping Houses

By on July 15, 2023   /   House Flipping  

Bridge or Fix and Flip Loans

Flipping houses can be a profitable venture, but it’s important to be aware of the common problems that can arise. Here are some of the most common problems with flipping houses:

  • Underestimating the costs. It’s easy to get carried away with the excitement of flipping a house and underestimate the costs involved. This can lead to financial problems if you’re not careful.
  • Running into unexpected problems. Even if you do your due diligence, there’s always the chance that you’ll run into unexpected problems during the flipping process. These problems can add to your costs and delay the sale of the property.
  • Not selling the house for enough money. If you don’t price the house right, you could end up selling it for less than you invested. This can wipe out your profits and even put you in the red.
  • Not having enough time. Flipping houses can be a time-consuming process. If you don’t have enough time to do the work, you could end up making mistakes or running into delays.
  • Not having the right skills. Flipping houses requires a variety of skills, including real estate, contracting, and marketing. If you don’t have these skills, you could end up making costly mistakes.

Here are some tips to help you avoid these problems:

  • Do your research. Before you buy a house to flip, do your research and make sure that the property is in good condition and that the market is right for flipping.
  • Get professional help. If you’re not experienced in flipping houses, get professional help from a real estate agent, contractor, or financial advisor.
  • Set a realistic budget. Be realistic about the costs involved in flipping a house and set a budget that you can afford.
  • Be patient. Flipping houses can take time, so be patient and don’t expect to make a quick profit.

By following these tips, you can help reduce the risk of problems when flipping houses.

Financing For Fix and Flips

Brad Loans provides competitive financing alternatives for real estate investors interested in fix and flip projects. Get no interest on unused renovation funds, 100% financing on rehabilitation costs, and closings in in around 10 business days when applying for a Brand Loans Fix and Flip Loan.

Hard Money Lenders in Phoenix, AZ

When you are searching for hard money loans near me in Phoenix, Scottsdale, Glendale, Tempe, Mesa, Chandler, or Gilbert, Arizona; Brad Loans is Arizona’s most trusted direct hard money lender!  We specialize in hard money loans for Fix and Flip, refinancing mortgages with bad credit, business loans secured by real estate, real estate purchases, short sales, and other endeavors with quick turnaround in the Phoenix Valley.

BradLoans.com is the most trusted direct hard money lender and private money lender in Arizona! We are the best hard money lender in Arizona with the ability to fund commercial & residential hard money loans many times within a couple of days or less. Our lending rates and fees are reasonable compared to other Arizona hard money brokers or mortgage brokers in Arizona.

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How To Flip A House With No Money Down

By on May 23, 2023   /   House Flipping  

Bridge or Fix and Flip Loans

Fix and flip loans—also known as a bridge loan, swing loan, or gap financing—are short-term loans that offer you with the working capital required to meet the quick financial undertakings of your fix and flip venture. These types of loans are usually for a twelve-month term or less and can be acquired in a couple of days. Like a lot of other kinds of property loans, backing is needed for an underwriter to back the loan. So, what’s interesting about bridge loans—and what makes it such a good alternative for those who are new to fix and flips—is that the backing may be the projected value of the flipped property. This may be structured in two distinctive ways: the amount based on how much you could borrow on the after repair value (ARV) or based on the loan to cost (LTC) ratio.

After Repair Value (ARV) Loans

ARV fix and flip loans are appropriate for properties that will increase considerably in value following the renovations as much as 50 to 100% on top of the purchased price. A lot of lenders cap ARV loans at between 65 and 70% of the property’s estimated ARV.

Let’s say the purchase price of the property is $100,000, and the renovation cost will be $50,000. The entire investment that will make this home available to market is $150,000. You have done your homework, and you’ve estimated you could sell the property for $200,000.

The lender will do their own research to decide if your investment estimations are accurate and your selling price is reasonable. Because their findings support your data, they agree to give you a loan that’s 65% of the ARV, equaling $130,000. Meaning you only need to put up $20,000, or in this instance, 10% of the ARV, on your own. If the property sells for $200,000, you have made a $50,000 profit.

Loan to Cost (LTC) Ratio Loans

Loan to cost ratio loans are suitable for properties that, while still anticipated to make a profit when they sell, are not estimated to sell at 50 to 100% profit margin. Dependent on the market, the lender might be ready to underwrite an investment and a rehabilitation LTC loan of 75 to 80%.

For instance, you have located a property that costs $125,000 and will require $45,000 to renovate. Your research shows you will be able to sell the property for $210,000 after the repairs. The lender offers you a loan of $127,500, meaning you’ll have to put up the rest of the $42,500 on your own. When you sell the renovated property for your asking price of $210,000, you’ll end up with a profit of $42,500.

Bridge Loan Rates

Depending on the kind of lender, no matter if it is hard money, private money, or a financial institution, rates may range considerably. The loans terms will also differ, so it is vital that investors look around until finding a lender that is appropriate for their individual requirements.

In the end, the kind of bridge loan you decide on becomes a matter of balance—meeting your fix and flip property’s requirements without exceeding your personal financial risk.

Financing For Fix and Flips

Brad Loans provides competitive financing alternatives for real estate investors interested in fix and flip projects. Get no interest on unused renovation funds, 100% financing on rehabilitation costs, and closings in in around 10 business days when applying for a Brand Loans Fix and Flip Loan.

Hard Money Lenders in Phoenix, AZ

When you are searching for hard money loans near me in Phoenix, Scottsdale, Glendale, Tempe, Mesa, Chandler, or Gilbert, Arizona; Brad Loans is Arizona’s most trusted direct hard money lender!  We specialize in hard money loans for Fix and Flip, refinancing mortgages with bad credit, business loans secured by real estate, real estate purchases, short sales, and other endeavors with quick turnaround in the Phoenix Valley.

BradLoans.com is the most trusted direct hard money lender and private money lender in Arizona! We are the best hard money lender in Arizona with the ability to fund commercial & residential hard money loans many times within a couple of days or less. Our lending rates and fees are reasonable compared to other Arizona hard money brokers or mortgage brokers in Arizona.

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Flipping A House Checklist

By on December 29, 2022   /   House Flipping  

Flipping A House Checklist

Are you looking to flip a house for the first time? Use our 10 essential tips below!

Tip 1. Make Sure You Have Enough Cash

Generally, you will need about 25% of the home’s value for a down payment. Of course, you won’t know how much you’ll need until you find the right property, but make sure to have a bit of cash-on-hand at the start. The suggestion is to see how much money you have right now, multiply it by four, then calculate where that puts your price range. Do you have enough money to make a profit after flipping a home in your area?

Tip 2. Find Discounted Properties

Do not scroll through the traditional real estate listings. Instead, look for people who want to buy a livable home at market value. Focus your search through wholesalers, foreclosure listings and auctions. Most experienced house flippers market their services directly to sellers in an effort to get early insights on potential deals.

Tip 3. Get A Professional Home Inspection

You are trying to save money up front to maximize your profits, but do not skip the inspection. Every house flipper has experienced unforeseen issues that eat away at profits. Always make sure to have the home inspection done by a professional.

Tip 4. Know The Surrounding Area

It’s all about location in the house flipping world. You need to ensure the neighborhood matches your target audience before selling. Do not renovate a home for a family if the neighborhood is unsafe. The good news is you can learn a lot about neighborhoods with some online research or by talking to a local real estate agent.

Tip 5. Hire Trusted Contractors

Most house flippers do a lot of repairs and upgrades themselves, but everyone will need to call for help from time to time. Before even attempting to flip your first home, start building a strong network of trusted contractors. Ask for referrals or contact some professionals to start. Most contractors are happy to help with flips.

Tip 6. Double Check The Numbers

Before making an offer, run these numbers one more time:

  • Price of the property.
  • Estimate cost of repairs, upgrades and landscaping.
  • Real estate fees, insurance and closing costs.
  • Utility costs while you own the home.

A good guideline to use is the 70% rule, which says the investor should pay the after repair value (ARV), minus the cost of repairs. It’s not always possible to stay true to the 70% rule, but it is a good mindset to have going into this process.

Tip 7. Stay In Your Comfort Zone

If this happens to be your first flip, the advice is to not go overboard. Stay in your comfort zone and budget when it comes to costs, repairs, house size, etc. Start by flipping a smaller home with good potential value. The bigger the home, the greater the risk.

Tip 8. Contact Professionals For Help

Yes, you may want to do the entire flip yourself, but there will likely come a time when that is no longer possible. If you end up getting over your head, it’s time to call for professional help. Professional help will end up being cheaper over time, as this will likely prevent any future issues.

Tip 9. Finish The Flip On Time

Try to keep the budget in one hand and the schedule in the other. Maximizing profit generally means completing the renovations within a couple months. Detail a plan to finish the project in two months, while expecting the first few flips to take up to three months. The more time you take performing repairs, the higher the holding costs become.

Tip 10. Price The House Realistically

You did a lot of work to turn this house around, but start by pricing it realistically based on the surrounding market. An unrealistic listing price will simply mean the home stays on the market for a longer amount of time.

Extra Tips

  • You need a good exit strategy and work out what you are going to pay for it and what you are going to do with the house once you have renovated it. A good plan is to purchase the house, have a contractor fix what needs repairing or renovating and then sell it.
  • You have to source the money for the property purchase. www.bradloans.com can help.
  • Work out the cost of your investment and for how long you will have to borrow money. If a house in your area on average takes 6 months to sell, go for 9 months.
  • Discover as early as you can how much repairing and updating the house will cost. A contractor can help here. Take notes on everything they say regarding costs.
  • Get ready to start as soon as the house has closed so time is not wasted
  • Make sure the house is well staged and clean before display.
  • Be open to negotiation. Sometimes it is best to barter on something relatively insignificant to secure the deal giving the buyer the feeling they got a deal.
  • Understand your holding costs. Every day the house does not sell is another day eating away at your profit.
  • Be prepared to make concessions to close the deal, especially if it is costing you money or being dragged out.
  • Follow up the title company to make sure everything is progressing in a timely manner.
  • Remember to cancel the utilities.
  • Once the process is over sit down and work out what went well and what needs improvement next time you flip a house.

House Flipping Tips

Hard Money Lenders in Phoenix, AZ

When you are searching for hard money loans near me in Phoenix, Scottsdale, Glendale, Tempe, Mesa, Chandler, or Gilbert, Arizona; Brad Loans is Arizona’s most trusted direct hard money lender! We specialize in hard money loans for Fix and Flip, refinancing mortgages with bad credit, business loans secured by real estate, real estate purchases, short sales, and other endeavors with quick turnaround in the Phoenix Valley.

BradLoans.com is the most trusted direct hard money lender and private money lender in Arizona! We are the best hard money lender in Arizona with the ability to fund commercial & residential hard money loans many times within a couple of days or less. Our lending rates and fees are reasonable compared to other Arizona hard money brokers or mortgage brokers in Arizona.

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