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What is Home Staging?

If you’re selling a flipped house, whether you’ve already gotten a hard money loan or you’re just thinking about branching out and making an investment, you always need to look at the big picture – and part of that is considering home staging.
What is Home Staging?
Home staging is the act of setting up a house you’re trying to sell so it’s as appealing as possible to potential buyers. You want buyers to walk in and envision themselves living there – and to do that, the house has to be (at bare minimum) spotlessly clean.

You’re a house-flipper, so you don’t necessarily have to declutter or add furnishings (although homes with furnishings generally sell faster than those without).

But you do need to make sure it’s clean.

That probably means hiring a professional cleaning service – one that specializes in new construction or move-in cleanings.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.

 

What is the 70% Rule in Real Estate Investing?

If you’re interested in flipping houses, you’ve probably heard of the 70 Percent Rule – but what is it, and how does it apply to you?
What is the 70% Rule?
The 70 Percent Rule is a pretty common term among real estate investors. It refers to a way to determine what price you should pay for a house and the costs of rehabbing it in order to make money.

Typically, under this “rule,” an investor should pay about 70 percent of the house’s ARV, or after-repaired value) of a property, minus the repairs.

Let’s say a house’s ARV is $150,000. It needs $25,000 in repairs. Under the 70 Percent Rule, an investor should only pay about $80,000 for the house.

Here’s the math:
$150,000 x 0.70 – $105,000

$105,000 – $25,000 – $80,000
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.

 

  • What’s the Formula for Calculating Profit or Loss on a Flipped House
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    What’s the Formula for Calculating Profit or Loss on a Flipped House?

What’s the Formula for Calculating Profit or Loss on a Flipped House?

If you’re flipping a house with a hard money loan, what’s the formula for calculating profit or loss? Here’s what you need to know.
What’s the Formula for Calculating Profit or Loss on a Flipped House?
Your profit is equal to the sales price minus the purchase price, minus rehab costs and fixed costs.

Let’s say you sell a house for $200,000, but you bought it for $125,000 and spent $25,000 on rehabbing it. Your fixed costs are $5,000. Your formula looks like this:
Profit = $200,000 – $ 125,000 – $25,000 – $5,000
Your profit on this house is $45,000.
Sales Price
The sales price is, at least before you sell, an estimate of what you’ll sell the house for. It’s best to come up with a conservative estimate.
Purchase Price
Your purchase price is how much money you spent to buy the house.
Rehab Costs
Rehab costs include the materials and labor necessary to get the house into resale condition.
Fixed Costs
Fixed costs are the fees, commissions and other costs you have to pay during the project, including closing costs (yours, and in some cases, the buyer’s as well). These can include:

Closing costs
Commissions
Concessions
Insurance
Interest on your hard money loan
Lawn care
Property taxes
Transfer taxes
Utilities

You’ll also have to figure in taxes, but they’ll vary based on each transaction.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount […]

Should You Put New Kitchen Appliances in a Flip?

If you’re flipping a house with a hard money loan in Georgia, Florida or Tennessee, it makes sense to think about what appliances you need to put into it – and one of the major places to consider is the kitchen.

So should you put new kitchen appliances in a house you’re flipping?
Should You Put New Kitchen Appliances in a Flip?
In some places, the only “optional” appliances are a washer, dryer, dishwasher and refrigerator, so make sure you know what you’re doing before you consider opting out of buying them. A stove is probably necessary, as is the sink – and in many cases, if there’s space for a dishwasher, it has to be included as well.

For the most part, the idea behind selling a flipped house is that it’s turnkey – that means the buyer doesn’t have to spend any extra money to move in (above the cost of moving and buying the house, of course). That means including appliances could help you sell faster (and for more money).

Unless you have a good reason not to include appliances in the house, you probably should – but every situation is different, and unless it’s required by law, nobody can force you to put appliances in the kitchen before you sell a flipped house.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can […]

When Should You Hire a Property Manager?

If you own rental properties, or if you’re thinking about buying one with a hard money loan, you’re probably wondering when you should consider hiring management help, a handyman or other assistance – and you’re not alone.
When Should You Hire a Property Manager?
If you’re more of a hands-off property owner who doesn’t want to advertise your rental units, run background and credit checks, or hire someone to fix every little issue that comes up, you’re probably going to want to hire a property manager.

Most property managers charge about 10 percent of the monthly rent to handle all these things for you, and depending on your market, may charge a fee (sometimes a percentage of the rent, again) to find and vet possible tenants.
When Should You Hire a Handyman?
If you have multiple properties to manage, having an on-call handyman may be a good idea. However, if you’re dealing with one or two properties and you have the time (and inclination) to work with a contractor who will put you on his or her schedule, you may not need to hire someone part- or full-time.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.

 

How Long Does It Take to Flip a House?

If you’re buying a home with the intention of fixing it up and selling it, whether you’ve already gotten a hard money loan or not, you probably want to know how long the whole process will take. Unfortunately, there’s no one-size-fits-all answer to that question – but here’s an estimate of how long it takes to flip a house.
How Long Does It Take to Flip a House?
Let’s say that it takes you between 5 and 10 days to secure financing (we can fund loans in a matter of days in some cases). That’s assuming the seller can go ahead with the sale and you’re not buying a short sale, which typically takes a lot longer to process.

From there, the condition of the house determines how long it takes to remodel. Some people can get it done in a week, with the right crew, but it could take a few months if you encounter surprises or you’re having issues with contractors.

When it’s time to sell, that varies, too. With the right real estate agent on your team, and the right marketing plan, you may be able to sell very quickly. You’ll still have to wait for the deal to close (you’ll most likely be waiting on the buyer’s lender and working on the bank’s timetable), which can take between 21 and 45 days.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use […]

Should You Sell an Entire Building or Sell it Unit-by-Unit?

If you’re rehabbing a condo building with multiple units, whether or not you’ve already secured a hard money loan, should you sell the whole building or sell it unit-by-unit?

It’s a tough question, but only your own financial circumstances, as well as your intentions for the future of the property, can answer it.
Should You Sell the Whole Building or Sell it Unit-by-Unit?
Look at this question long-term. If you sell the whole building, you’ll make your profit and be done with it. If you sell it unit-by-unit, or if you choose to keep some units as rentals, you’re in for a more long-term profit (and you’ll be in the rental business).

Managing rentals can be a pain (that’s where a property manager comes in), but over time, it can pay off. However, there are no guarantees in this business!
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.

 

3 Things to Look for in a Good House Flip

If you’re going to flip houses for a living, you need the right hard money lender – but after that, you need to find the right properties. Here are three things to look for in a good flip.
3 Things to Look for in a Good House Flip
#1: Location, Location, Location
The key is to find a house in a desirable neighborhood. That’s where you’ll make the best profits (obviously). This can be tough in a slow-moving real estate market, but that’s when it can pay off the most, too. Research cities and neighborhoods within those cities to look for rising sales, job growth and other indicators that an area is doing well.
#2: Condition
You want a home that needs a little TLC but not a major overhaul. Make sure the homes you’re looking at are in fairly sound condition – the last thing you want is a money pit. The house should be structurally sound and have working systems (electrical, gas, plumbing and other systems, for the most part).
#3: A Decent Kitchen
Kitchens and bathrooms sell houses – any Realtor® can tell you that. You want a house that has a good layout and won’t require a major overhaul (especially if you’re just starting in this business).
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently […]

  • 3 Tips for Finding Great Contractors in Real Estate Investing
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    3 Tips for Finding Great Contractors in Real Estate Investing

3 Tips for Finding Great Contractors in Real Estate Investing

Flipping houses and investing in real estate requires you to work with a great team – and that includes reliable, trustworthy and effective contractors.

But how do you find the best contractors?
3 Tips for Finding Great Contractors in Real Estate Investing
#1: Ask for References
Ask family, friends, your hard money lender and anyone else you can think of for referrals and references. Chances are pretty good that you know someone who’s worked with a contractor before, so use their experience to find one that’s going to work out well for you.
#2: Interview Three (or More)
Ask plenty of questions when you’re interviewing contractors, and make it a point to talk to at least three. (More is better, even if it is time-consuming. You’ll save yourself plenty of time down the road if you find a good one now.)
#3: Find Out What the Contractor Will Do and What Subcontractors Will Do
When you settle on a contractor or two, find out which work they’ll do themselves and which work they’ll subcontract out. You can ask for an employee list to make sure that your contractor will have vetted people working on your projects.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.

 

Trim and Paint Make a HUGE Difference

If you add two simple lines of trim – one as a chair rail and one as crown molding – you could be adding a huge amount of value to your investment property.

But how do you do it the right way?
Trim and Paint: An Affordable Value-Add
Pro Tip: Make a big impact on the house’s appearance by painting trim before you install it.
The Chair Rail
First, pick out a trim that measures between 60 and 70 percent of the width of the baseboard. Use a stool and apron (it’ll look like a windowsill) if possible, but if not, use the same trim that’s already on the windowsills.

Center your chair rail at about a third of the wall’s height.
The Crown Molding
Pick crown molding that’s about 30 to 40 percent of the baseboard’s width for maximum effect.
Are You Looking for a Hard Money Loan to Buy a Property?
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding in Tennessee, Georgia or Florida. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.

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