Now is a good time to be thinking about what you want to do differently in 2019. For a lot of people the new year is when they start wanting to make major changes not only personally but also professionally. If you’ve been considering getting into real estate investing and using fix and flip loans to do it, we have a few tips to get you started. There are three keys to making money on your first rehab loan. First you should research the area where you want to buy a property. Next, you need to make a budget and a timeline for repairs. Finally, find a good source of funding.
Get a Good Team and Make a Careful Budget for Your Rehab Loan
Any rehab project begins with finding a suitable property. Check out the area where you think you might want to buy. Ideally, you want to find a neighborhood where property values are on the rise. Or you can look for a house that is selling for well below market in a stable, high-value area. Look at the market stats over the past six months to a year. Call the local police department to find out about crime trends in the neighborhood. Look at the local schools to see if they are at least above average. All of these factors will help you decide whether the area is a good investment.
Once you’ve found the right property, it’s time to sit down and figure out what work needs to be done. Do a walk through with your contractor and get estimates on each part of the job, both for the cost and the time it will take. Always factor in some extra time and money. Just about every flipper you meet will tell you that there are almost always extra repairs that come up once you start on the job.
Finally, you need a way to pay for the project. There are several ways to get funding. You can talk to family and friends who have money they want to invest. You may be able to use your own home equity. Bringing a partner on board may be a good choice. Finally, you can approach a private or hard money lender. Each has its own pros and cons, and you should think carefully about your situation and experience before deciding.
If you’re interested in working with an experienced private money lender for fix and flip loans, contact LendingXpress. We’d be happy to talk with you about upcoming projects and plans!