When it comes to real estate investing, the most common piece of advice is to do plenty of research. This doesn’t mean just reading up on general information. To really make money with rehab loans, you need to know your local real estate market very well. The market in Los Angeles is different from Santa Barbara, and they’re both different from Sacramento. In some large cities, the market can even vary significantly between different parts of the city. So you have to get to know whichever market or markets you want to work in very well.
Factor in Extra Money and Time for Your Fix and Flip Loan
Once you feel comfortable with the current state of the market, it’s time to start putting in offers and finding a good candidate property for a fix and flip loan. Some people can get caught up in overly optimistic dreams about how much money they can make. Others get paralyzed by too much information. The fact is that at some point, you’ll need to take the plunge and purchase some real estate.
For those who lean toward the cautious type, there are several steps you can take to protect yourself from losing money. In the first place, always assume that you’re going to need more money for rehab loans than you initially calculate. Depending on your market, adding a spare $5,000 to your budget can help you cope when the unexpected comes up. If you don’t need the extra money, it’s that much easier to pay back the loan. You can also factor in an extra month or two on the project’s timeline. Adjust the budget to account for the extra money you may have to spend in that time. This includes insurance, utilities, and holding and financing costs.
If you need to speak to an agent for a rehab loan, get in touch with LendingXpress. Our experienced agents can help you decide on the right structure for your investing plans.