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A Review of Hard Money: Why These Loans Can Help You Kickstart Your Wealth

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hard money loans

Every loan—whether from a friend or from a bank— is contingent upon a certain amount of trust. The trust is that you will pay it back. When it comes to a bank, of course, there is usually some collateral or high interest involved so that there is some guarantee that their efforts in lending the money to you will be worth it in the end. Hard money loans function a little differently, as they don’t exactly require proof that you will pay them.

Lenders are usually interested in your past credit and credit scores. This record is a kind of proof that can be used to indicate the likelihood of your ability to pay the loan back. Hard money loans are not exactly concerned with your credit score, as your past spending is not as relevant as the project at hand. The collateral—or in the case of real —estate investment, the home or property, is used as collateral to secure the loan. Your past credit card bills become irrelevant. So the value of the home you plan to purchase and flip is more important than the actual history of your spending.

Real estate can be a quick business. A property that goes on sale and is a lucrative opportunity for profit or a great buy, it will go quickly. Going through a traditional lender can be a time-consuming process. If you have some blotches in your credit history or some negative items, they will certainly play a role in slowing down a lender’s loan process. Because hard money loans are not concerned with your credit scores or financial history or standing, the process of obtaining a hard money loan is far more quick and efficient. It can often happen in just a few days and get you squared away with your new funds for your upcoming project.

Benefits of Hard Money Loans for Real Estate

Hard money loans can be a really great opportunity for people that are considering trying their hand at real estate investments or house flips. They are beneficial because

  • They are generally short term loans of about one to five years
  • They are fast
  • They are reliable
  • They are very flexible loans
  • They don’t look at your credit scores or credit history

So What Happens if You Can’t Repay the Loan?

Because of the way it is structured, if you are not able to pay your loan, then the owners of the loan will take the collateral and sell it to pay themselves back.

So When is Hard Money a Good Option?

Hard money loans can be a good option for people that might not qualify for a loan with a traditional lender. If you’ve had some bad credit history due to credit card issues, or etc. it will not really become a factor with hard money lenders. These types of loans can also be ideal for a house flip, where the purchaser has the home for just a short amount of time and then turns around and sells it for a profit. This way, the loan can be paid back quickly.

Reach Your Wealth Potential With Hard Money Loans

Here at Entrust Capital Funding, we are excited to help people launch their wealth-gaining endeavors. We understand it’s hard work to flip homes or invest in real estate and our hard money loans with low interest rates can help make that happen quickly, effectively, and with a trusted and reputable lender that is owned and operated locally.

house flips

Ten Important Tips for Your 2019 House Flip

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In 2019, there is not only a positive outlook on the economy but a good growth rate on the real estate market. According to realtor.com, sales of the new homes in the United States increased for the second month in a row in February, which means that 2019 is off to a fast start. New family homes, which is a relatively small slice of all U.S home sales rose 4.9%. This is an indicator that consumers are having confidence in buying properties and investing in real estate. These numbers are a positive affirmation that investing in real estate can be a good option for building investments.

Real estate investment and flipping homes is a lucrative venture that has no step-by-step manual. The engagement, creativity, and drive needed to make these projects work is part of the fun and there is no one formula for a successful flip, although many will claim to have it. We can, however, explore the advice of many a house-flipper before us and learn from their mistakes and their wisdom. So we have put together a list of ten tips that can help you with your next flip project. Depending on the kind of property you are buying, neighborhood, and other factors,

#1.  Don’t go Too Big Your First Time. If this is your first house flip, stay away from the tempting larger-than-life projects that might tangle you up in too much all at once. Obviously, the bigger the property the bigger the problems and the more you have to repair and worry about. This might not be a good idea on your first rodeo, as you first want to learn the ropes. It’s a good idea to start with a single-family home and go from there.

#2. Take Care of Things Properly. Home flippers have sometimes acquired a reputation of cutting corners, but this should not be the case. In order to be good at your work, you want to do tackle the big items and do the work thoroughly and consistently.

#3. Find Your Contractors & Rehab Team. As soon as you purchase a property, the time on your profit starts ticking. So, instead of scrambling to find contractors, do your research beforehand and get a good idea as to the contractors you would most likely go for. Reach out to good real estate agents that might work with you.

#4. Study the Local Market. If you are familiar with a particular neighborhood or side of town, this can be beneficial to you. Studying the conditions around you, knowing the schools, crime rates, potential development and real estate prices will help you in making better choices and decisions regarding the properties you buy and how much you spend to fix them, as well as the price you set for it.

#5. Choose the Right Hard Money Lender. Choosing your lender is a big part of the process, as it will determine your interest rate and the dependability of the loan. Do your homework and research the loan company to ensure they are trustworthy.

#6 Leave Wiggle Room. Regardless of how well you craft budgets and estimate expenses, chances are that along the way some problem will arise as during repairs or inspections.

#7 Understand Risk Factors. Real estate investment is active and requires a lot of active engagement. For successful investments, understand the risk factors involved and have a plan to mitigate them or fall back on.

#8 Do an Inspection Before You Make an Offer.  When a property looks too good to be true, it most likely is. This is the kind of cautionary mentality that can be very beneficial to a house flipper. First, you want to do an inspection (most lenders will require it before the loan anyway) and ensure there is not significant structural damage, roofing, etc. If there is, you want to be prepared for it.

#9 Know Who Your End Buyer Is. Understanding your possible buyer for a particular property can really help you decide and prioritize on the fixes and renovations that you do. This helps you know the idea price point of buyers.

#10 Stay Away from Homes With Major Repairs. This, of course, depends on you and your commitment to the project, but if you are new to flipping homes, it might be wise to stay away from houses that need major roofing repairs, plumbing issues, or structural issues.

We are Your Trusted Lender!!

Entrust Capital Funding is your trusted lender in the El Paso area. We are experienced real estate investment lenders, ready to support people looking for that perfect flip or investment opportunity. Your success is our success and why we make the process easy, fast, and reliable. We also have the lowest interest rates in the city.

How Investment Meets Stability: Fighting for Your Financial Future With Real Estate

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There is a reason why countless television shows deal with real estate investing, flipping houses, and interior design. That reason is that regardless of the economic state of the country, people will always need homes. The housing industry, while suffering its ebbs and flows, always has some kind of demand, as people grow older, get careers, move out, and begin their own families in their own homes.  This is why real estate investing can always hold big opportunities for wealth building.

Many Americans look not for exorbitant riches and million dollar homes. Many people today are just looking for a way to establish a stable financial future with plenty of assets and security that gives them peace of mind for their retirement, their children, and grandchildren. And therein lies the magic word: stability. Real estate investing can be a great way to achieve some of this stability when handled properly and with care.

Real Estate Investment Provides Safer Returns

There are several ways to invest your money in an attempt to secure your financial future. One of these ways is investing in the stock market. This is one way that people build their wealth, but it comes with a lot of unknowns, headaches, and volatility. Stock investing can take advantage of a growing economy but can quickly tumble down as soon as there consumer and investor confidence plunges or some unpredictable change occurs.  Real estate investing still sees changes in the market, but it is far less volatile than the stock market. For investors, this means that even when an economy suffers, the likelihood that the market will rise again means higher returns.

Diversification Leads to Increased Stability

Don’t put all your eggs in one basket. This advice is valuable when it comes to your finances. Real estate investment is a lot more dynamic, as it can happen in several different ways. You can purchase a property to flip or rent. If you purchase and flip a property and then put it for rent, you can collect what is called passive income. If you purchase a property to flip and sell, you are making a one time profit.  Any financial planner will tell you that diversifying your portfolio is a great way to spread the risk and purchasing property can help to do that. Of course, it depends on your financial goals. Hard money loans are a great way to get in the game if you’ve had some trouble with your credit history in the past. These types of loans, of course, do not pay attention to your credit history but are more concerned with the value of the property itself.

Land and Assets Will Always Have Some Value

Even in bad economic times there is always value in your land and home. The value doesn’t just disappear the way that stocks often can.  That investment you make is worth something. Therefore, people are always looking to purchase homes and flipping houses is a great way to capitalize on that. Let’s say you buy a property that at first glance is not worth much. You pick it up. You fix it up, remodel it, repaint it, do the quick fixes necessary to make it a desirable residence and it suddenly becomes easier to sell. Someone is looking for that house and when they find it, you will profit.

Achieve Financial Stability With the Right Investment Strategy

Here at Entrust Capital Funding,  we can help you reach financial stability with hard money loans. If you’re looking to start building some wealth and not sure where to begin, real estate investment can be a great way to jump into the profit-making possibilities out there today. Bad credit score? No problem. We got you covered. Entrust Capital Funding has the lowest interest rate in the city.

 

How To Maximize Your Profits as a House Flipper

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Thinking about flipping homes? Rehabbing a home can be an extremely lucrative pursuit if it is approached with caution, understanding, and a little bit of insight knowledge into the inner workings of the industry. Your first flip might seem like an insurmountable task but arming yourself with a few key tips will really make a difference to the outcome. It can certainly help you produce the kind of profit you’re looking for. Let’s look at a few wise words to consider.

Think Carefully About Remodeling Choices

The fix and flip is often seen on television as a great massive overhaul of the home’s interior and exterior designs, bathrooms, kitchen, etc. This makes for great entertainment, as the full transformation of a home is something to witness. However, when dealing with a flip in real life, it is important to note that over remodeling it might not necessarily bring more profits to you as the flipper. As Forbes magazine points out, remodeling takes a lot more time, money, and resources. Embarking on complex remodels will often open the doors for more issues to arise.

  • Tearing into walls can lead to more problems. When digging too deep you might run into a problem you didn’t bargain for. Also, a mistake by the contractor can extend the timeline.
  • More time more money. Another reason why spending an extended amount of time on flips is not advisable is because the more time you spend on it the more money you will be spending and possibly losing.
  • The changing market can make a difference. If you hold on to a house for too long, the market may change and alter your original calculations, pricing, etc.
  • Keep it simple. Experienced house flippers have said that keeping the repairs and remodels simple is the best way to go. Completely changing the bathroom or kitchen will not necessarily pay off at the end. Keeping the changes to what is necessary is a wiser investment choice in a lot of cases.

Some possible risks

There is no shortage of date or factors you can consider when flipping a home. This doesn’t mean you have to fully learn the industry but only be aware of certain things that can impact the way you approach your flip, how much your renovate, how much you spend on repairs, and how quickly you get it back into the market.

Consider market trends. You don’t have to be a real estate expert to look for some big patterns on market trends. You can check in with a multitude of sources —like realtor.com, Joint Center for Housing Studies of Harvard University, neighborhood price ranges, local MLS statistics, census.gov, even social media— for updates on the market. This will give you some insight into demographic shifts that can impact the price of the property you are looking to buy.

Look at changing interest rates. The interest rates on home loans are always important to consider. The interest rates might tell you something about the prospective buyers for your planned property.

Valuation. This is a critical part of the flipping process. Carefully considering and estimating the price of the finished product.  What is the After Repair Value (ARV)? Get a good idea of what the selling price will be before you make an offer to purchase the property.

Choose contractors wisely. In a previous post, we talked about the importance of choosing the right contractors. Doing some research, weighing your options, and calling around, will go a long way when it comes to choosing a reputable and trustworthy contractor.

Ready, Set, Flip!

ATTOM, the real estate data company, reported the average profit on house flips can be up to $65,520 in the second quarter of 2018. Of course the number varies on whether you are doing a lower price range flip or a high-end flip.  If you’re ready to embark on the flipping journey, a hard money loan might be the solution for you to get started fast. We don’t do credit checks and you can hit the ground running asap. Give Entrust Capital Funding a call today.