There are so many different types of lending options out there and so many unique avenues to consider when looking for different loan options. One of the most popular types of lending products out there today are known as hard money loans and while they are not always the most appropriate type of lending option, they can be a valuable asset in a number of situations. If you aren’t already familiar with hard money loans and all that they can offer, here are some of the basics involved with these loans so that you can get a better understanding of what they are appropriate for and when and where you should use these loan options to meet your financial needs.

What Situations Are Ideal for Hard Money Loans?

There are many different situations where you could be using hard money loans. However, they are most commonly utilized in:

• Home flips
• Construction loans
• Land loans
• Situations where a property buyer has bad credit
• When real estate investors need to move quickly

If you are in one of these situations, then a hard money loan can be a great option.

What Are the Benefits of Hard Money Loans?

So, why exactly do so many people like using hard money loans, especially in the aforementioned situations. Well, one of the biggest benefits is that hard money lenders are able to fund these loans quickly. There are many types of hard money loans that can be funded in as little as week. However, a traditional bank-funded loan can take much longer and typically takes between 30-45 days to get approval.

This is why hard money loans have become such a popular option for real estate investors who often find that time is of the essence when it comes to securing the funds they need. Hard money loans are often used in situations where a borrower has already been rejected by the bank for a conventional loan. This can be from credit issues, foreclosures, short sales or even insufficient income history.

Borrowing Requirements With Hard Money Loans

One of the most unique things about using a hard money loan instead of a conventional loan is that hard money lenders are typically primarily concerned with the amount of equity that the borrower has invested in the property—and how much the borrower has to use as collateral. This is the primary thing that hard money lenders will look at as opposed to the borrower’s credit rating. Most hard money lenders are willing to overlook things like foreclosures if the borrower has enough equity or capital to pay the interest on the loan.

Hard money lenders will also look for a plan from the borrower, and make sure that they have a plan for how to use the money and how to pay off the loan. Typically, this means property improvements that can improve the value of a home in the long-term.

These are some of the basic cornerstones of hard money loans and some essential facts that you need to know about these loans before you consider one moving forward. As you can see, there are many perks of these loans and many situations where they may be able to help you get the financing your are looking for.

Using a private lender or a hard money lender when looking to finance an investment property can be a great way to get the money that you are looking for. There is so much that goes into investing in real estate and it is important to note that if you are buying an investment property, it is typically different than the process involved with purchasing your normal primary residence. This is why so many people turn to private money lenders or hard money loans.

Typically speaking, these lending options offer more flexibility and they move much faster than using traditional financing. This is a major benefit in the quick-paced world of real estate investing. However, not all private lenders are created equal, so before you decide on who you will be using for your hard money loans, there are a few things that you should look for that will let you know you are making a smart choice.

1. Great Communication

As you reach out to a lender and start to communicate with them, you want to make sure that you find someone that is super responsive to all of your communications. Whether this means answering a phone call or responding to questions over email—responsiveness is key. One of the main reasons why people work with private money lenders over traditional banks is that they allow deals to be closed quickly. Think days instead of months.

This is why you need someone in your corner who is super responsive and on top of things. After all, you don’t want that perfect investment property to slip through your fingers because you couldn’t get ahold of your lender. The lender should be very responsive but also quite transparent about everything that is happening along the way.

2. Competitive Rates and Points

Of course, as you look for lenders, make sure that you are comparing rates and points. You want to keep an eye on every cent when it comes to investment properties. These lenders understand the importance of keeping rates low as they primarily work with real estate investors and those planning on flipping homes. However, it is important to remember that these are not traditional loans that you get from a large, national bank—so don’t try to compare these rates to those mortgage rates—they are not going to be the same.

3. Funding

Look at how much money you are going to have to put forward. There are certain fees and down payments that are standard in this industry, but make sure that you are clear on how much you actually need to bring to the table and how much the lender expects you to come up with. Don’t be fooled by a lender that says that you need to pay a huge amount in “engagement fees” on top of your existing fees when getting a loan.

There is no denying that choosing the right lender can be tricky. However, if you take the time and do your due diligence you can end up with a quality lender that ensures all of your deals move swiftly and seamlessly—and that you are staying on top of your game with your financing as you venture into the world of real estate investments.

If you are thinking about making the jump into real estate investing, then this can be an exciting prospect for your future. There are many people who find a great deal of success with real estate investing and turn it into a long and profitable career. However, real estate investing also comes with a great deal of risk. This is why if you are considering a foray into the world of real estate investing you need to take a minute to really think about your decision and whether or not you are ready to enter into this market.

Here are five signs that you may not be ready to invest in real estate.

1. You Haven’t Done Your Research

If you’ve never read an investing book, then you likely aren’t ready to start real estate investing. You need to be able to commit your time into learning more about real estate investing so you can actually understand the market you are about to get into. You need to read at least one book on real estate investing before you really consider a career in this field. In addition to reading an entire book, make sure you are constantly following real estate investing blogs, listening to podcasts and familiarizing yourself with this industry. If you aren’t really able to dive deep into this market, then you may not be ready to start real estate investing.

2. You Haven’t Looked At Your Spending

Real estate investing is going to force you to look at your finances differently and to really hone in one your spending and the way you view money. If you want to be successful in this field, you are going to need to review your finances and start preparing yourself for an investing like this. It is always good to tighten everything up and have a larger cushion in place so before you start this career. You never know what unexpected costs are going to arise in the world of real estate investing so you need to be as prepared as you can be.

3. You Are Thinking Too Much About Metrics

There is such as thing as analysis paralysis, especially in real estate investing. Instead of focusing on too many metrics at once, pick one and stick with it. Make sure that you know it well. If you find yourself exploring too many options right now, you may not be ready to make this type of plunge.

4. You Haven’t Figured Out Financing

If you haven’t talked to a lender yet, then you likely aren’t ready to start investing in real estate. Unless you are planning on paying straight cash, you need to have your financing figured out. Whether this is a mortgage, hard money loan or anything in between, you need to have your financing options figured out before you start your career.

If you found that any of these things are true, then it may not be time for you to seriously start your new career in real estate investing. Remember, the more prepared you are before you start, the better off you will be.

So, you’ve invested in a piece of real estate. Perhaps you’ve flipped or at least repaired the property, and put a lot of thought and blood sweat and tears into this new venture. After all, real estate investing can be a huge undertaking. However, if you are choosing to manage this property on your own, instead of working with a management company, then your journey is only just beginning. The more you know about some of the difficulties associated with property management, the better prepared you will be to handle this responsibility.

Here are some hard lessons that only property managers know.

1. Not All Tenants Are Great at Managing Their Money.

Chances are you will see this around the holidays, but it can happen all of the time. Rent day comes and goes and your tenant magically doesn’t have enough money to cover the cost of rent. Then, you may see them with a new iPhone or wearing some new expensive designer duds. You need to have a strict policy in place about late rent and covering late rent fees, or your tenants will come up with any excuse such as “I spent too much on Christmas gifts” to send in a late check.

2. The “Friend’s” Dog Excuse.

So, you’ve put in a “no pet” policy, or decided to charge a pet fee. Great idea. However, there are many renters who love trying to get around this and sneak pets into their rental properties. Chances are, they will tell you its just their brother’s dog staying for the weekend or they are temporarily pet-sitting. Many times, this is a bit of a stretch, so be on the lookout for unapproved pets coming in and out of the property.

3. Your Disappearing Social Life.

You may have decided to manage a property all on your own. However, while you may be saving in property management costs, you may be paying a lot extra when it comes to your social life. Be prepared for have tenants needing all types of repairs and help in the property and to call or email you around the clock. Guess when they are likely going to call? Yeah, on your precious weekends.

4. The Hurricane Tenant Who Wants Their Deposit Back.

A security deposit is always a must when renting out a property. However, just because you have a security deposit it doesn’t mean that your rental is completely safe from a destructive tenant. Be prepared for backlash when it comes time for tenants to get that security deposit back. Nearly every property manager can tell you that the most destructive of tenants are going to want their whole security deposit back. So be prepared to handle situations where renters will destroy carpets, damage walls or leave behind giant messes, only to expect their entire deposit returned immediately.

5. The Subletter.

This is a huge issue among many property managers and one you should be prepared for. There are many renters who will act as mini property managers of their own and sublet their apartments to others, without asking their property manager. Make sure you keep an eye out on this one. Subletting may seem innocent enough, but: a. it usually means your tenant is making money of you and b. it means someone you don’t know who you haven’t screened is living in your property.

Managing your own property can be a huge undertaking and it can come with a number of obstacles. However, the more prepared you are to handle these common issues, the better. Make sure you keep these lessons in mind so you can be more prepared to handle this new responsibility.

There are so many things that go into navigating the waters of today’s real estate investing world. It can be difficult and complicated to figure this market out, which is why so many new investors often make a number of mistakes. Sometimes these mistakes can be rather minimal, but other times they can be quite costly. Avoidable, expensive mistakes can really add up and really make an impact on your real estate career.

The more you know about these common and avoidable mistakes, the easier it will be to avoid these issues moving forward. Here are the most common mistakes that new investors make.

1. Not Calculating Cash Flow- Calculating cash flow ahead of time can be a difficult undertaking. Unfortunately, many investors tend to ignore or underestimate the expenses that they will have when investing in real estate. However, taking the time to calculate expenses in detail and over-estimating most expenses can help get the cash flow right. Don’t forget about things like maintenance, repairs, property management fees and vacancy rates when making these estimates.
2. Attempting to Time the Market- This is another mistake that so many new investors make. Everyone thinks that they can predict the market and how they can turn a little investment into a lot of cash—and very few people can actually do this. Even the best economists in the world can’t accurately predict the market. So, even if you’ve lucked out before with the timing of the market, don’t try to repeat this magic. Focus your efforts elsewhere, it will be a better use of your time.
3. Not Building a Team- Real estate investing really is a group effort. No matter how independent you may think you are, you need to have reliable network of individuals to help you along your journey. This means a great realtor, home inspector, contractor, handyman and lender. Know who you can rely on and who you like working with so you can continue to count on these individuals with every investment you make in the future.
4. Budgeting For the Unexpected- You need to have a cushion when budgeting for real estate investments. It can be easy to forget that you need to have a big cushion set aside and easy to be tempted to put it all towards your property. If you were planning on $15,000 worth of repairs and upgrades to your property, put $20,000 aside. You need to have a cushion. It is always better to budget too much than too little.

Have you made these real estate mistakes before? Hopefully you can learn these lessons the easy way and avoid them before they turn into an expensive mistake for your future.

Real estate investing can be a complex market. There is so much to learn about this field, whether you are a seasoned vet or brand new to real estate investing. While most insight comes from experience, there are still an important pieces of advice that everyone should know about real estate investing, no matter where they are in their career. While we could literally list hundreds for you, here are 20 of our favorite suggestions about real estate investing.

1. You need a team. Real estate investing is a team effort, you need other professionals on your side.
2. Do your due diligence. The more information that you have, the better. The more information you can get and confirm about an investment, the better. This includes the history of the property, cost of utilities and potential for future income.
3. Get your real estate license. Even if you have another realtor on your time, it is important to get your real estate license. It is a valuable asset and can only help you in this market.
4. No one can fake it till they make it. This is not an industry for that. Don’t make an offer unless you can close on it. It will hurt your reputation.
5. Put everything in writing. Absolutely everything you have from leases to notices need to be in writing and you need to have a copy of it.
6. Master one investing strategy before moving on to the next. Do your best to stay focused. Master one strategy at a time instead of dabbling in several.
7. Put emotions to the side. It can be easy to let emotions take hold when investing in real estate. Put them aside and look only at the facts. Emotions have no place in real estate investing.
8. Pick someone else’s brain first. Take the time to sit down with someone else who invests in real estate to learn about their strategy and to pick their brain. Ask them as many questions as you can to get insight from someone who has done it before.
9. Don’t cut corners with your repairs. You may be focused on pinching pennies and saving every dollar you can, but make sure that you don’t cut corners with your repairs or updates. Shortcuts are only going to end up costing you in the long run.
10. Know the difference between passive and active income. If you have active income, it means you are working for your money. Passive income is about sitting back and letting your investment work for you. Know the difference, it will only help you as you create an investment strategy for your future.

Keep these facts in mind and remember that the more time you spend in the real estate market, the more you will end up learning about investing. In the meantime, keep these valuable pieces of advice in mind as you get started.

While the world of real estate investing may seem rather glamorous from the outside, this industry can be quite complex and at times, difficult to navigate. If you want to make it in the world of real estate investing, it will take a lot of hard work and determination. You will also want to keep several of these key laws in mind that can help you along the way. Here are seven rules that every new investor should know.

1. The Educated Investor Gets the Worm

In the world of real estate investing, nothing is as valuable as knowledge. The more you can educate yourself on your market and on the topic of real estate investing in general, the better. If you are already a good investor, taking the time to really educate yourself can take you to that next level and become a great investor. While talking to others can be a way of getting insight, remember to never blindly follow other people’s advice in this market, you need to put in the work and actually educate yourself and then use that knowledge to take action.

2. Never Chase Appreciation

If there is one thing that the whole country should have learned with the last market crash, it is that speculation is extremely dangerous. Never chase the idea that a property will appreciate. Those who purchase an investment, sit back and assume it is going to increase in value are just setting themselves up for failure. You need to be active in your investments. You need to be involved in the process and have a strategy for renovations and ways to add value, otherwise your portfolio will never grow.

3. Investing Goals Need to Be Quantifiable

It is a common piece of advice, but one that many who are new to real estate investing fail to follow. You need to set real, measurable goals so you can actually see if you are reaching them.

4. Cash Flow is Key

In the world of real estate investments, you need to have cash flow. Don’t buy properties with a breakeven point. You need to have positive cash flow. It not only means a better return on your investment, but it will help you build net worth and give you what you need to invest in more properties in the future.

5. Diversify, Diversify, Diversify

You need to diversify your portfolio. Even if you have found success with one type of investment, the more diverse you are the better. This means having a handful of properties across different locations and markets. Just because you found an area you were successful in, once you have 3-5 properties in that area, it is time to move on.

6. Professional Property Management is Always a Smart Bet

Unless your actual job is to be a property manager, you should never manage your own investment properties. Paying a professional management company can seem like an added expense, but it is one that is always worth it. It requires a great deal of time and expertise in order to be a great property manager, and ultimately, your time is your most valuable asset.

Keep these real estate investing laws in mind if you are considering entering this market as they can help you along the way during your journey.

Fixing and flipping homes can be a great way to put some extra money in the bank. However, as any real estate investor will tell you, the key to making flips work is selling the property fast. This is especially true when dealing with convenient hard money loans that are designed to be short-term. The quicker you sell a flipped home, the less interest, overhead and monthly payments you will need to make, and the faster you will be able to take your profits from that flip and invest them in another property.

Time is always of the essence when it comes to selling fix-and-flips, so here area few tips to help make sure that your property sells fast.

1. Know Your Potential Buyer And ALWAYS Keep Their Interest At Heart
Before you ever start flipping your home, you need to know who your potential buyer is. Have a clear idea of who the target market in your neighborhood is and what type of person will likely be buying your home. Is it a single individual? An established family? Someone looking for their starter home? Then, every decision you make from the layout to the finishes needs to be made with that particular buyer in mind. It doesn’t matter if it isn’t what you would want, it only matters what the potential buyer is and what they are going to want or expect from this property.

2. Choose An Experienced Real Estate Agent as A Partner
The right agent can be an essential component in you selling your flipped home fast. Make sure that you find an agent that not only has proven experience, but one that knows the specific area that you are selling in as well. They will not only be able to help you market the home to the buyers that frequent the area but they will also be able to help you determine which rehab upgrades are going to attract the right type of buyer in the community that you are selling in.

3. Choose the Right Price
This is one of the areas that many new fix-and-flip investors struggle with. Coming up with the right price point can be extremely difficult. After all, once you put all of the work into flipping a house, you are going to want the best return-on-investment possible. However, no matter how much money you think you should make for your work, you need to instead make sure that you are choosing a price that is competitive with your neighborhood. Otherwise, your property is at risk for becoming a stale listing and won’t sell. Plus, remember, the faster a home sells, the more profit you are likely going to receive.

4. Staging, Staging, Staging
Staging does cost money, but it is one last final expense that can really help your home sell fast. The right staging not only highlights the best features of your newly renovated home, but it can help buyers envision what it is going to be like living there.

Keep these tips in mind when you get ready to sell your next fix-and-flip and remember that the faster you can sell your property, the faster you can start seeing those profits.

Flipping shows have recently been all of the rage in the world of reality TV—and it is easy to see why. These programs are exciting, they usually include a bit of drama and in the end you get to find out whether the stars run away with tens of thousands of dollars—or if they end up taking a loss.

While these flipping shows have helped boost the flipping market, real investors know that there are a lot of smoke and mirrors involved in these shows and they can leave potential flippers with some very big misconceptions about the industry. Sure, reality shows make the entire flipping process seem simple and as though you just need a little cash and some good intentions to start making a ton of money. However, that isn’t always the case.

Here are a few hard truths to understand about the flipping process, and how it is portrayed on television, before you think about entering into this industry.

• The Numbers Don’t Always Add Up- One of the biggest draws of these shows is how much money the flippers can, and often do, make. However, with a closer look at these programs you will notice how the math rarely adds up. Rehab costs are greatly undervalued, and many times things like commissions, closing costs and other feeds aren’t taken into account.
• They Make it Look Fast- If you think you’re going to find a house, flip a house and sell a house in a matter of weeks, because they make it seem that way on television—think again. Real estate is a notoriously time-consuming venture. It actually takes a lot more time than people realize to find and buy the right house for a flip. It needs to be priced right, have the right potential, and be in an area where it will sell. Don’t be fooled into thinking you can get rich quick from house flipping.
• There Are Always Buyers- If you’ve ever tried to sell any type of house before, you know that there aren’t always lines of buyers just waiting to snatch up even a great property. Those packed open houses they show at the end of the program typically aren’t just filled with buyers.
• Investors Aren’t Typically Involved in the Manual Labor- If you’ve ever seen a reality show star wearing designer clothes in perfect makeup “demoing” the walls of a property on a show, you may think that the process looks easy. Or even that you could save on some renovation costs by picking up a hammer or two yourself. However, in real life, the investors writing the checks typically aren’t doing physical work. They need to find new deals, handle paperwork, run their business and coordinate contracts.
• Not All Real Estate Investors Are Rich- Sure HGTV stars make it seem like flipping is the key to making it big—especially when you get to see them retreat back to their ultra-chic Southern California homes. However, many home flippers do not make a lot of money and are not rich. Many do it on the side. Even stars who have now made it big struggled for years in making money off the flipping process. Just look at Tarek and Christina El Moussa from the show Flip or Flop, they openly talked about having to split $5 sandwiches to eat, having to sell their cars, and moved to an apartment with a roommate to pay their bills when they first started.

Flipping is a complicated business and if you want to be a successful real estate investor, it is important to look at real life investors to understand how the industry works, and leave the reality shows for pure entertainment value.

If you want to start investing in real estate, it can be a great way to build an exciting new career for yourself and earn some serious income while you’re at it. While many people know there are benefits of investing in real estate, many people do not know how to get started in the real estate investment market. After all, it can be quite intimidating.
So, how do you start real estate investing if you don’t have much experience or much money?

The following tips can help you on your way to exploring the world of real estate investing.

1. Home Equity Loans- If your home currently has equity in it—or if it is worth more than what you owe on it, you can actually get a line of credit based off of your home. A home equity loan or a home equity line of credit allows you to access the money that you have in your home without selling that home. This is money that you can use as a down payment or for funds towards your first real estate investment.

2. Consider House Hacking- House hacking is a great first way to get into real estate investing and is a strategy that helps many people break into this business. With house hacking, you buy a small multi-unit building such as a duplex, triplet or fourplex. You live in one and you can rent the others our for a form of income.

You can often get these properties with a FHA loan, which is very easy to get and requires very little down, just 3.5%. It can help you ease into being a landlord—it is typically easier as you will be living next door to your tenant, and you can eventually turn it into a rental property that can provide you with passive income.

3. Look Into Hard Money Loans- Hard money loans are another great option if you don’t have the existing money or the experience to get the cash you need. For example, if you were flipping a home and needed the money for renovation, you could turn to a hard money lender for assistance. There are rates and fees but it is often one of the easier ways to get the initial cash you need to break into the real estate investing world.

4. Explore Seller Financing Options- Many people don’t understand seller financing, but it is a great strategy that has helped many people. Basically, the seller sells you a piece of property, but instead of you going to get a loan, and getting cash, you just pay the seller money every month until the home is paid off.

The seller is providing the loan themselves, and you are making payments based on whatever terms you have set up together. It isn’t always a possibility, but it is one that may be worth exploring.

Keep these tips in mind if you are looking for a way you can start your venture into real estate investing without any real experience or money.