Web
Analytics
All Posts By

Entrust Capital Funding

House before and after repair vector illustration. Flat design.

Finding the Right Flip: What To Look for In an Investment Property 

By | El Paso, Home Buying | No Comments

So, getting a real estate investment loan in El Paso is easier than you thought. What now? So you look for the next opportunity that calls your name. And right now the El Paso real estate market is pretty active. So, what do you look for when searching for the next best home to flip? 

There is no single correct answer. After all, being a real estate investor is all about vision, creativity, and what we like to call that ‘inner hustle.’ It’s not a slow man’s game. When it comes to real estate flips, you have to move quickly but strategically, take risks but weigh your options, know the ground game, understand the market, have the right team of contractors, and move swiftly towards the end goal. Many of the United States’ home sales were a result of house flips. According to Investopedia in 2019, about 6.2% of all home sales in the United States were house flips

The Ultimate Checklist for the Best Flip — Keep These 5 Tips in Mind 

Just because a home looks a little run down and is calling your name doesn’t mean it’s the right one for you. Television makes house flipping look like a walk in the park. There are plenty of homes out there that could use some renovations, but your best flip will meet one or some of these criteria:

  1. Make sure the neighborhood has potential. When someone buys a home, they are likely buying more than just the lot and structure. They are committing to the neighborhood and locality in which it sits. A lot of time a neighborhood’s popularity is related to local schools, nearby amenities, or surrounding parks. Finding one of the smaller homes in the big neighborhoods can prove a big investment. That’s because the high value of the neighboring properties makes the smaller home more accessible to a larger buyer pool. 
  2. See beyond the lack of curb appeal. You are a house flipper. Think like one. That means seeing what something could be and not what it is. It’s all about finding the quickest road (no shortcuts) to the destination— i.e. looking at how to get to a desirable home from the conditions of the home you see. Is it going to take landscaping? A new driveway? A new front door and a couple of trees? Etc etc. A renovation doesn’t mean you have to install a whole new floor or do a full kitchen remodel. It might mean being strategic with these renovation options and using what you have and working with it.  
  3. Don’t forget to take a quick look at the neighbors. Find a great house in a good neighborhood, but have a crazy cat lady as a neighbor? This might be a problem. Eccentric is not always a great quality in the real estate market, so if you find a home that appears to have neighbors that are on the fringe and are keeping bees, or have ten chickens, goats, and a mini pig, take that into consideration. 
  4. Stay away from busy streets or heavily trafficked streets. A lot of really nice older homes will often be located in unfortunate subdivisions that were somehow chewed up by modern development. A home that sits right next to a busy street that sees a lot of traffic and noise, will always sit on the market for a long time. Consider staying away from these properties unless there are other characteristics that outweigh this downfall. 

Three Quick Warnings: Stay Away from These Common Mistakes 

Just like there is some general advice to follow, there are also a few mistakes that can be avoided with just a little background information. The 70% rule known to a lot of real estate investors states that an investor should pay no more than 70% of the after repair value (ARV) of a property minus the repairs needed. 

Mistake #1: Belly flop into the first deal without doing your homework. Research financing options and make sure you know which one is right for you and your circumstances. Remember to factor in the costs of repairs, as it is the only way to make sure you’ll make a profit. 

Mistake #2: Assuming that it is a part-time endeavor. It can be for experienced real estate investors. If you are just starting out, it might not be the best approach to do this as your side-gig. At least, not for your first property. Finding the right property, researching value and market, plus the acquisition, take time. That is not counting the time it will take supervising contractors. 

Mistake #3: Losing patience and jumping the gun. This piece of advice can apply to many endeavors. Real estate takes patience and some prowling. Get familiar with the kind of property you want to flip and jump on it when the time is right. 

Found the Right Property? Now Get a Quick Real Estate Investment Loan and Get to Flipping 

Getting a hard money loan will be faster, easier, and will not present obstacles to the acquisition of your right property. Call Entrust Capital and get the money you need to flip today. 

Want to find out more about hard money loans for real estate investment? Call Entrust Capital in El Paso and learn more. 

A Secure Investment: Real Estate and House Flips During a Time of Crisis 

By | Home Buying | No Comments

Young business entrepreneur woman working at home while having breakfastAccording to a recent Gallup poll, both high-income and low-income Americans have lost faith in their stocks. Interest in stocks and mutual investing fell dramatically in the first quarter of 2020. Of course, these are unprecedented times and the market has certainly shown it.

Thirty-five percent of Americans say real estate is their favored long-term investment. This has been the case since 2013 and remained so especially during the time of the pandemic. The reason for this can be twofold: one, real estate is tangible, and even during a pandemic, it is still there. You can see it. Feel it. Touch it. Two, the markets will always come back, at some point or another, but they do come back, and when they do, people will always need a place to live. 

Tips For Preparing For a Recession as an Investor

We don’t actually know what is going to happen to the markets as the country begins to open up. There are plenty of analysts and market gurus projecting their predictions. Some claim that there is likely to be a recession coming out of this. That may or may not be the case. In fact, it may be that the markets bounce back as people are eager and able to get back to work immediately. After all, we’ve never had a self-imposed economic shut down before. Yet, as a real estate investor, you always want to be prepared and have a few things in mind in case a recession does hit. Here are some things to keep in mind:

  • If you have properties or assets, you might consider selling some so that you have more liquidity. 
  • If you are prepared, consider making cash offers on properties likely to go back up quickly, that is, places with desirable schools, good neighborhoods, etc. 
  • If you have the capital, buy properties that you see have potential. Many real estate investors, after the great recession of 2008, figured out that they could have bought more properties since prices went insanely low. 
  • If you’re a house flipper, you can work on building relationships and using several lenders, so you have trusting relationships before a recession hits. 

Well, that still doesn’t answer the million-dollar question directly. Does that make now a good time to put in an offer on a property? 

The truth is, there is likely no straightforward answer to that question. The answer will largely depend on what you plan to do with the home, your current situation, your other properties, etc.

It might very well be a good time to buy an investment property if there is inventory at a good price. The challenge is, of course, that there were a lot of pauses put on the home selling process, that inventory is quite low in many American cities, including El Paso. 

How the Stay at Home Orders Upended the Home Buying Process 

Many companies that specialize in buying or selling homes have put a pause on operations. New listings, according to Market Watch, were down 44% in April compared with the previous year. This translates to about 189,000 fewer homes on the market than during the same period in 2019. New home construction was also halted, as many builders became wary about the state of the housing industry. 

So there might be a lower amount of inventory due to these reasons:

  • Seller uncertainty 
  • Real estate companies halting services
  • The rapid rise of unemployment and sellers pulling their listings
  • Lack of foreclosure homes. 

All this being said, it doesn’t mean that it’s necessarily a bad time to buy an investment property. A deal is a deal. And if a deal pops up in a market that you, as an investor, see as a good investment, it is the right time to buy. The returns will come later, as the market picks up. In fact, there is already data suggesting that buyers are returning to the markets and slowly things are picking up. 

It’s important to keep in mind that all of the above reasons are only temporary. Seller uncertainty tends to fade as the market begins to reopen and states go back to normal. Texas is one of the states that is opening the fastest after coronavirus. And while El Paso seems to be slower than the rest of the Lone Star State, there are still plenty of listings in the El Paso market. That being said, Texas is a robust state with a strong economy and a business-friendly environment. This will likely mean a quicker recovery. 

Get Confident, Look for a Deal, and Be Ready to Invest For Your Future

Every investor knows that investing—whether it be real estate or stocks—always involves some risk mitigation. Uncertain times, certainly call for more attention to detail and keeping your eye on the markets. That doesn’t mean, however, that it is not a ripe time to capitalize on the market downturn. Finding a good deal means that your returns will likely increase as the market picks back up. Here at Entrust Capital Funding, we encourage investors to go with their gut and use their entrepreneurial spirit to seek the right deal for the best price. If you’re looking for some funding to invest in that diamond in the rough, give us a call today.