So, you need some money for a quick fix and flip? Many people looking to break into this business do and often struggle to determine what place is the right place to secure the financing that they need. The good news is, hard money lenders can help.

However, there are some people who have trepidation’s regarding hard money lenders. Perhaps they have heard a horror story in the past, perhaps it is the name “hard money” or perhaps it is the fact that they just don’t really understand what a hard money lender is.

The good news is, hard money lenders aren’t as scary as you think. In fact, they, in general, tend to make getting loans quite easy. Here’s what you need to know about hard money lenders and what they offer.

Why You Should Turn to Hard Money Lenders

Hard money lenders are private investors that are dedicated to helping people get short-term loans secured by real estate. These lenders specialize in short-term real estate investment opportunities such as fix and flips.

They typically give out loans for about 12 months, but they may lend longer, and they will ask you to provide monthly payments of interest or interest and some principal and at the end of the loan (when you sell your fix and flip) you will make a balloon payment for the remainder of the loan.

These lenders are going to work with you one-on-one and base their decisions on the deal they are presented with. They aren’t going to comb through your financial records. Instead, they are going to look at the potential for your fix and flip to earn money and base their loan terms on that.

What are the Pros of Hard Money Loans?

There are many pros of the hard money loans you can get from these lenders, this includes:

• Speed of Approval—you can typically get these loans secured very quickly compared to other mortgages, typically because the lender is mostly focused on collateral not all of the other financial documents that mortgage companies need from you.
• Flexibility—one of the biggest benefits of working with hard money lenders is that they can be more flexible than traditional loan officers. These lenders will evaluate each deal individually and are often more flexible with individuals than large companies are.
• More Approval Rates-with hard money loans, you can avoid issues with getting your loan approved. Credit issues, or bankruptcies aren’t going to prevent you from getting a loan approved in the way they would with other mortgages—hard money lenders are more focused on the deal.

So, if you have been apprehensive about hard money lenders in the past—now you know about just how helpful they can be when you need cash for your upcoming fix and flip. Keep this information in mind before you find the right financing for your investment property, as a hard money lender may be just the ticket to you getting the money you need to make your fix and flip dreams a reality.

There are so many ways to make money in real estate, especially if you are able to buy a house at a great price, make some valuable improvements and then sell that house for the right number. However, there is even more to do if you really want to make top dollar in real estate—and as every pro knows, it is all about the little extra things that you do to make that extra money and to really separate yourself from the crowd.

This is why we have curated a list of some practical, hard and fast tips to keep in mind so you can make sure you’re really earning your max potential.

1. Make sure you are investing in neighborhoods with future growth potential. You can also look to “next-wave” cities based on economic growth. You can access this information through your local government office.
2. Consider strategies to lessen your capital gains taxes on flips. If you live in the property for two of the five years before you sell—you can exclude a lot of your property gain. Make sure to read up on the rules, but being creative in this way with your fix and flip can really end up helping you make a great deal more.
3. Consider hard money lending. It is a great way to let your money work for you while you secure the funds you need in order to make your fix and flip a reality.
4. Educate yourself. There are programs such as those available on Real Estate Express that can help get you certified in things like home inspections, or appraisals—which can really help if you are planning on investing in a fix and flip.
5. Look for pre-foreclosures. Also known as lis pendens, these properties can be more difficult to track down, but they are some of the best deals out there, as you are able to secure a house on the cheap, while the seller can effectively avoid foreclosure proceedings.
6. Consider REO (real-estate owned) or bank-owned properties. The bank is going to do a lot of the dirty work for you, like evicting tenants and clearing any liens—so you can spend your time and money on getting it ready to make the big bucks.

It is easy to get caught up in all of the improvements, financing and other obstacles that come with fix and flip properties. However, it is important that you remember, you still need to keep these real estate essentials in mind during the process so that you can make the most of your investment and have the financing you need to move on to the next one!

If you want to buy a house, flip it and make a profit—there are so many opportunities for you to make some money, but if you haven’t done it before, there are also plenty of opportunities for you to lose-big and lose all of the hard-earned cash you put into this investment.

If this is a first-time flip for you, and you don’t know what it is that you are doing—you may be surprised to find just how difficult this in. In fact, flipping a house is nowhere near as easy as they make it seem on TV. This is because TV shows aren’t going to tell you the real deal or fill you in on all of the secrets that you need to know about how to actually make money in this type of venture.

With this in mind, here are four things that no one will tell you when you are a first-time home flipper.

1. Always get your permits. While you may think you are savvy enough to do everything yourself—if you don’t pay to get your building permits, it can really cost you in the end. Go through the proper channels and visit the city to pull permits on major renovations, if you don’t it can lead to lawsuits or kill a sale in the future and saving yourself the time and money won’t be worth it in the end.
2. Know your neighborhoods. Not every fixer-upper is going to be an investment. No matter how cheap it is or how much potential you see in a home, there is never going to be anything that can compare to a good location. When flipping the house, think not only about the neighborhood, but what a potential buying in that neighborhood would want in a home so you can design it for that type of buyer.
3. Don’t expect a profit. It is an insider tip that no one wants to hear, but it is one that you need to keep in mind. No matter what your reason was for getting involved in home flipping or what you see on TV, when you are just getting started, you shouldn’t expect to make any real money at all. You will need some experience under your belt first, and if you go into buying a house with the expectation that you are going to make money, chances are, you will only be disappointed in the end.
4. Always have a backup plan. Very few things ever really go according to plan in the world of real estate. This is why you need to plan ahead when it comes to your budget, and plan ahead with a backup option in case your house doesn’t Whether that backup option is renting, or even living in the house yourself, you should always have a “Plan B.”

Now that you have a few insider tips on what you can really expect when fixing and flipping a house, you can make the decision for yourself on what you want to do and how you want to move forward with this investment opportunity.

Fix and flip properties are one of the most popular and profitable ways of investing in real estate today. The right fix and flip can make you a great deal of money—just like the wrong fix and flip can lose you a great deal of money. There is no denying the popularity of flipping in today’s market. However, most people think that they need a lot of cash on hand in order to make a fix and flip work. This isn’t always true.

While cash is always valuable when it comes to any time you are making an investment. There are ways that you can invest in a fix and flip property with hardly any money in your pocket. Here are three different places you can look for help when you need money for your fix and flip investment, but don’t have enough cash on hand.

Find a Partner

This is probably the easiest way to get some cash for your fix and flip property, without having to take any type of loan out. There are many places to find partners. You can ask a family member, close friend, business associate, local business owner or even another real estate investor that you can partner with.

Think about who you interact with on a daily basis in order to find a partner.

There are lots of ways to enter into this partnership. Many people enter into a simple 50-50 split. Your partner will finance the deal, you do all of the legwork and the two of you split the profits. However, there are many different partnership options available—and remember you will need to be able to sell yourself or your services to the other parts you are partnering with. 

Hard Money Loan  

Hard money loans are some of the most popular sources of financing for people who are looking to get into the fix and flip business, but who don’t necessarily have as much cash on hand as they need.

Hard money loans do have higher interest rates than some other loans, but they aren’t as difficult to get as mortgages, and they are designed to be for short-term projects, such as flipping. Hard money loans are a great solution for many flippers—but are best if you know that you can flip the property quickly.

Private Money Lenders

Private money lenders, like the name suggests, are regular people who have money they are looking to invest. This is different than getting a partner, because typically, these lenders will act as a bank, giving you a loan at an interest rate they see fit—instead of working together with you.

You can typically negotiate a better rate with a private lender than you would with a bank—and you can get more control over the terms of your loan. The good news is, as fix and flip properties get more and more popular—so do the number of private lenders who are looking to invest for flippers without enough money. There are even online directories available that can help partner flipper with private money lenders.

Remember, when it comes to getting started with the fix and flip industry—where there is a will there is a way, even when you don’t have thousands of dollars on hand in the bank. All you need to do is determine which option is the right option for you.

Regardless of the type of investor you are and your loan scenario, there is an array of loan
programs that are designed to meet all your mortgage needs.

Hard Money and Fix & Flip Loans are among the most popular programs that investors utilize
for their real estate investments. Although they are two different programs, many inside and
outside the industry believe them to be the same loan…but this is the furthest thing from the
truth.

Hard Money Loans

A true Hard Money Loan is an asset-based loan, which means the financing is based on the
Loan to Value (LTV) of the Asset. Unlike the Fix and Flip loan, it doesn’t go through full
underwriting and there’s no minimum FICO requirement for the borrower, as it doesn’t have
many guidelines and criteria.

This type of loan doesn’t have as many restrictions as one might think considering that it’s just
money, so no more having to worry about bankruptcies, foreclosures, collections, etc.
Due to the lack of guidelines and underwriting, a true Hard Money Loan is generally capped at
65% LTV or less. For example, let’s say you have a home worth $1M, if you want $500K against
it (50% LTV), you’re able to receive the money within 1-2 weeks (from day of application),
commonly as a first lean position – because it’s just money. It’s normally in the form of a Bridge
Loan, which is short term financing in a period of 12-24 months.

One of the reasons why Hard Money Loans are for investment properties ONLY, is due to the
high cost regulations and predatory lending – you can’t put such high interest rates and cost on
an owner occupied property.

In certain states, there are non-judicial foreclosure laws, which allow a Hard Money lender to
get their money back quickly if the borrow defaults on the mortgage.

These foreclosure laws make the lender more comfortable doing high-risk loans, usually the
money is not sold on the secondary market – the lender holds the note, they don’t sell the
paper.

Fix & Flip Loans

Fix & Flip Loans are also asset-based loans, however they utilize more underwriting guidelines
and criteria. While Hard Money Loans focus solely on the asset, Fix & Flip loans look at both the
asset and the borrower.

The reason why people confuse Hard Money Loans with Fix & Flip Loans, are because both the
loan and the laws are very similar – they are both private money to an investment property.
Virtually all fix & flip and hard money loans are funded by hedge funds, the money comes from
the same place, but the underwriting is different.

Contrary to Hard Money Loans, Fix & Flip Loans are usually sold on the secondary market and
goes through a full underwriting with tighter guidelines. For instance, depending on the lender,
Fix & Flip loans have a minimum FICO requirement. Additionally, the borrower can’t have late
payments, foreclosure, judgments, or bankruptcy on their credit for 24-36 months.

Furthermore, a Fix & Flip loan is a rehab loan, a loan that you utilize to acquire a property and
then receive the funds to rehab that property in short term financing (12-18 months).
Depending on whom you are working with, it’s important to bring something dynamic to the
table, to help you close your loans quickly, efficiently, and professionally.

However, make sure that when you move forward with a mortgage lender that you know all
the details of your loan, why they are utilizing that program, and whether or not that loan
program is being properly presented to suit your needs.

Written by New Jersey based Mortgage Expert, Michael Mikhail, CEO of Stratton Equities.

If you are new to the world of flipping houses, then you may feel a bit overwhelmed by all of the tips and tricks out there—and all of the different lingo that is often used in this industry. There are many different terms that you will need to learn and understand if you want to integrate yourself in this business and really find a lot of success in this market.

While there is no end to the list of different terms that you will run across in this market—one of the most common “rules” that you will run across is one known as the 70 Rule. The 70 Rule has been one of the oldest and most trusted rules in the flipping property and before you start securing your financing and looking at homes to flip—you need to understand what the 70 Rule is, and how it works.

The 70 Rule, or the 70% Rule, is an easy guideline to help you when buying fix and flip properties, and while some more experienced investors may be able to be flexible with this rule, for new investors, they should do their best to stick as closely to this guideline as possible.

The 70% Rule applies to the maximum price you should consider paying for a property, with repairs so that you don’t overspend and so you can still turn a profit after all is said in done.

According to the rule; you should not pay more than 70% to the after the repair value (ARV) of the home, minus repair costs.

The ARV is the estimated value of the property after all of the repairs are completed.  So, if the ARV of a home is $200,000 and the home needs $50,000 in repairs, then the 70% Rule means that you should pay no more than $90,000 for the property. That remaining 30% ($60,000) left over will leave room for both your profits and some of the unforeseen expenses that will likely come up in the flipping process (because they will).

If you analyze these numbers correctly, and pull accurate comps, you are going to be in a good position to actually make money on your fix and flip. You can also use this information and work backwards to determine an offer price. Plus, you the 70% Rule is easy to figure out on-the-go, so you can use it as you are looking at different properties to determine whether or not the house in front of you will be a good investment.

Now that you know all about the 70 Rule, make sure that you keep this term in mind when you look for your next fix and flip property so you can make a smart investment for you and your future.

As every real estate investor knows, nothing is more important than location when looking for any property. The old term “location, location, location” has been around for a long time and it continues to be one of the golden rules of real estate. After all, you can change everything except location.

Of course, when you are buying a home for yourself, it is worth putting in the extra money to get the location you want. However, when you are investing in a property, you want to find a location that is up and coming—so that you can keep your overhead low put still benefit from being in a great neighborhood.

This is why you want to find investment properties in up and coming neighborhoods and look for neighborhoods that are about to be hot. This can be difficult to determine, but here are a few signs that you are in a soon-to-be-hot neighborhood.

1. There are Other “Flipped” Properties for Sale in the Market—Check your comps. If you see other flipped properties for sale in a neighborhood, then it is a good sign. You don’t want to be the first person to come in and start flipping, but you also don’t want to choose a neighborhood that has already turned and has an over-saturated number of flipped properties for sale.
2. Trendy Businesses Are Moving In—If you see a Trader Joe’s, Starbucks, Whole Foods or other big, on-trend business moving into the neighborhood, then this is always a good sign. Big businesses often look to emerging areas when they want to find a new location.
3. You See Lots of Popular Ride Share Programs—Do you see lots of scooters and bike rentals out and about in the neighborhood? This is a good sign that people not only like living in the area, but they also like staying in the area and feel safe biking or scooting around.
4. Properties Aren’t Staying on the Market for Long—Even if there are a lot of flipped properties for sale in the market, that doesn’t mean the property is necessarily “up and coming.” Look at how long those properties are spending on the market. If a property is staying on the market for 90 days or longer, this isn’t a good sign. Look for neighborhoods where properties are moving quickly.
5. There Are Hot Adjacent Neighborhoods—The best sign that a neighborhood is about to be hot and is about to be hot, is to look at the neighborhoods around it. A neighborhood can be up and coming, but if it is surrounded by dangerous or undeveloped neighborhoods, it is going to be really hard to sell properties in this area. You want to find an up-and-coming neighborhood that is surrounded by other hot neighborhoods to make a sound investment.

Keep these tell-tale signs in mind as you start looking for your next fix and flip property, so you can make sure that you are buying the right property for you and your financial future.

There are many things you can do in order to improve your upcoming fix and flip property. Now that the weather is warming up, there is no better time to start thinking of outdoor improvements that can help not only add curb appeal but help turn your back yard into a dream oasis for buyers.

If you are looking for outdoor improvements that can help transform your property, increase its value, and get the attention of buyers—here are some great outdoor improvements that are perfect for your investment property.

1. Update the Front Door and Garage Door- Curb appeal is important and you want to make sure that you make a great first impression. Swapping out the garage door or front door are affordable projects that will give your property that extra appeal.
2. Add Some Plants- Planting a few flowers here and there can go a long way in both improving the front and back of the home.
3. Sod or Plant Grass Seeds- Make sure that you put a lot of grass in the backyard to create some usable space. Sod is expensive, but sometimes necessary. If you are able to plant grass seed, make sure to time it out so that it is growing by the time you start showing the house.
4. Fence in the Yard- Privacy is a really big deal for people with back yards where they butt up to their neighbors’ yards. If you want to define your space, and add some privacy that makes the yard seem more private, invest in a fence. You can look for privacy fences that aren’t as expensive as some of the more ornate wrought-iron ones and add a lot of appeal to the space.
5. Add a Deck- If you have a good contractor and don’t overdo it with the materials, you can add a deck in your outdoor space for relatively affordable amount. They have a high ROI. Just make sure that the deck is done right so it passes the inspection.
6. Paint the Exterior of the Home- A fresh coat of paint on the home’s exterior can really transform a space, and it is way cheaper than replacing siding. Keep paint colors classic and fresh, not too trendy.
7. Stage the Outdoor Area For Fun- Think about how you envision your backyard being used at this home. String lights a staged grill, some outdoor furniture or even a fire pit can all show potential buyers how they can use the outdoor space. This is particularly important if you are trying to sell a home with a smaller back yard. Buyers love having a great outdoor space to enjoy, so pay close attention to the yard, with these easy fixes that will add a lot of value to your property.

There is no shortage of advice for the fix-and-flip investor in 2019. An endless litany of websites, podcasts and social media feeds shout tips, tricks and everything in between. But what does a fix-and-flip investor really need to know? What are the essentials of house flipping?

After more than 20 years helping fix-and-flip investors succeed, we’ve found it comes down to four essential questions. Knowing the answers to these questions will put you well on the way to achieving your goals and succeeding in this highly competitive business.

Essential Question #1: What is a good investment property?

What makes a fix-and-flip investment worth pursuing? That’s a simple question with a complex answer, one that cuts to the very heart of real estate investing. In short, it comes down to value. Certain properties are obviously more valuable than others, and understanding that value will make or break your fix-and-flip investing career.

Traditional measures of value apply to fix-and-flip properties as well. You’ll never go wrong considering factors like the quality of a school district, local population movement or overall market strength. But, for the fix-and-flip investor it’s important to understand other factors as well. The most important of these is a calculation of a property’s value after it’s been renovated, or After Repair Value (ARV).

ARV is a measure of the value of a fix-and-flip investment property after it has been renovated to meet the standard of local comparable properties. Calculating a property’s ARV correctly will allow you to judge what you should offer for a property, what it will cost in repairs and upgrades, and what you can expect as net profit. When weighed alongside traditional factors, a property’s ARV will help you more accurately determine its value as an investment.

Essential Question #2: What makes a successful fix-and-flip investor?

As a fix-and-flip real estate investor, you’re in business for yourself and no one has more control over your success than you. In this respect, fix-and-flip investors have much in common with other entrepreneurs. Studying entrepreneurship, in general, can teach us a few important characteristics of successful fix-and-flip investors. The three most important are a goal-oriented mindset, patience and discipline.

• Like any entrepreneur, fix-and-flip investors should be goal-oriented. Setting goals can help you stay focused and motivated and is a good way to monitor your overall progress. Identifying and setting Specific, Measurable, Achievable, Relevant and Time-Bound Goals will help you hone your entrepreneurial mindset.
• For fix-and-flip investors, patience and self-discipline go hand in hand. The real estate market (fix-and-flip or otherwise) is subject to change, and it takes both patience and discipline to succeed. A previously hot market may slow and a slower market may heat up, moving so quickly investors can get overextended. Having the patience to ride out market cycles and the discipline to stick to your investment plans can separate you from unsuccessful fix-and-flip investors. Crafting a well-made business plan will help you strategize your way through fluctuating real estate cycles and sticking to your plan will help you avoid investment missteps.

Essential Question #3: How do real estate cycles affect the fix-and-flip market?

All forms of real estate investing are, at least in part, affected by market trends. Sometimes a hot market means properties will only be available for days or even hours. Other times, a perfectly good property may linger for weeks or months.

Many factors play into these cycles, but fix-and-flip investors should be especially aware of population movement, overall economic strength and construction trends.

Population movement affects the number of potential buyers entering or exiting your market of choice. If your market’s population is growing, that could bring more buyers looking for a deal. The U.S. Census Bureau has reliable information on population trends that may affect your investment strategy.

Considering the overall strength of your local economy can also give key insight into long-term fix-and-flip trends. If your market’s economy is heating up, real estate growth is likely to follow.

Finally, the construction of new homes can also be a noteworthy indicator of market cycles. When construction spending is on the rise, that can mean there is a short supply of housing in a given market. Monitoring construction spending with data (updated quarterly) from the U.S. Census Bureau can be a good starting point.

Essential Question #4: What should fix-and-flip investors read to learn more?

Business leaders across all industries list reading as one of the keys to their success. The same is true in real estate, where reading the right books can help you hone your approach to investing and business in general.

Anchor Loans CEO/President and co-founder Steve Pollack recommends Deep Work by Cal Newport. “Newport’s book opened my eyes to more efficient and productive ways to create more meaningful project results,” said Pollack in a rundown of the business books recommended by Anchor Loans staff.

If you have been working on flipping or renovating a home and waiting for the spring housing market to hit, then you are almost ready to list that home in one of the most popular times of years for sellers. However, after all of that hard work on your part, you want to make sure your property is in the best condition possible to sell, so that you can make as much money as you can off your property. If you are about ready to list, here are a few tips on last minute details that will have your home ready for the market.

1. Pick a Date and Stick With it

If you are trying to get some of those last-minute things ready on your investment property, you want to stay as motivated as possible in order to get these things done. After all, every day you hold on to that house is costing you money. Pick a date to list and work backward from it, and do not budge from that date.

2. Bring Someone Else In

This doesn’t have to necessarily be a professional, but just someone that you trust. Bring them in to look at the property and let you know what they think about some of these last-minute details you need to get done. Investment properties involve so much effort on your part, and you spend so much time looking at the big picture, that you may accidentally be unable to see the little details. Having a fresh pair of eyes can really help.

3. Don’t Forget to Treat This Home Like the Investment It Is

This is so important for any investor, because it is so easy to forget that your property is a business. You put so much blood, sweat and tears into the home, that you can start to accidentally put your own personal touches on it and feel overly emotional about the property. Don’t forget, this isn’t your home, and you are not going to be living there. Keep things as neutral as possible to appeal to as many buyers as you can.

4. Staging, Staging, Staging

Staging is one of the best ways to highlight the features of any home, especially one that has just been renovated and doesn’t have anyone living in them. It helps people visualize spaces in the home and see its potential. Staging can seem like one other expense that you don’t want to deal with, but it is one that is worth the extra cost.

5. Don’t Forget About Curb Appeal

Curb appeal is important because it is the first thing that people see about your home when they pull up to the home. It is easy to get so overwhelmed with all of the little things you need to do indoors, that you ignore the outside of the home. First impressions are everything—especially on the outside.

The spring is a great time to try to sell an investment property, as so many buyers are done with the hectic holiday season and ready to find a new property to buy. Keep these little tips in mind when you get ready to sell your home so you can finally see the results of all of the hard wok you put into this property.