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Get After Your Flipping Dreams — 4 Tips for Successful House Flippers & Real Estate Investors

By | El Paso, home renovation | No Comments

Flipping homes for money does not happen overnight. People make good money flipping homes every day in this country, but every one of those people had to do their research, take some risks, and understand the different lending options available before they jumped into it. The footwork put in before the deal is made will serve you well as you navigate the uncertain waters of real estate investing. 

Buying a home and flipping it, is not for the faint of heart. So if you’re thinking about testing the waters of home flipping, read our introductory guide on how to get started. 

Is Real Estate Investing for Me?

Let’s put it this way, real estate investing is not the type of thing people stumble into without any interest in it. Most successful house flippers possess a couple of natural attributes that serve them well in the home selling business. Some might describe it as follows:

  • A natural hustle: If you’re one of those people that doesn’t have to be told what needs to be done and you just go out there and get after it, this might be for you. Selling homes is a hustle and you need the inner spark to get it done. 
  • An eye for a good deal: Some people are good at identifying a potential deal. Whether that’s getting a household item or the best deal on a car. 
  • A mind that’s comfortable with numbers. Real estate investing will have some surprises and some unexpected costs, but a successful investor knows how to crunch the numbers and get accurate and precise estimates on costs.
  • A cursory understanding of the market. While you don’t have to be a real estate expert, knowing the market that you’ll be working in will make it easier for you to spot a good deal or a bad one. Having an eye for potential good investments serves a house flipper well. This includes knowing neighborhoods, upcoming city renovations, developments, etc. 
  • Have a solid and fundamental understanding of home repairs or know someone that does. Being able to spot a good contractor can be a lifesaver. You don’t have to be the world’s greatest handyman, but having some understanding of home repairs or some experience hiring trusted contractors puts you in a better place. It also makes it easier for you to spot needed repairs on a possible flip. 

4 Tips Every House Flipper Should Know 

There is no golden book or Holy Bible of house flipping, but there is a lot of tried and true advice out there from people that have learned things the hard way. We have written a lot about finding the right flip and breaking through the real estate business, but there are several other key points to consider. 

Here’s some sound advice to keep you on the right track. 

#1 Arm yourself with knowledge—consider a real estate license

While there is no set requirement to become a house flipper, getting a real estate license is a good place to start. Going through the process teaches you to break through the real estate lingo, learn important terms, regulations, forms, HOAs, etc. You make connections in the community. You also get access to the MLS to better gauge prices. Also, going through the classes and instruction will solidify your commitment to the endeavor.

If you want to jump in right away, contact a person you trust and know is a solid real estate agent. Perhaps you have good connections already. Use them.  

#2 Establish good connections with reliable contractors

You don’t want to wait until you have signed on a house to start looking for your contractors. If you know the market, do your research on well-vetted contractors and workers. Even if you plan on doing a lot of the work yourself, you’ll likely need to hire a licensed contractor for a job or two. Establish connections with them before so that you have a go-to and know who you can trust. 

#3 Work the math— flipping homes is a numbers game

Before jumping on a deal, make sure that you know how to work some numbers and accurately estimate the cost of certain repairs. For example, putting in new floors. Make sure to factor in the cost of all materials and labor. Don’t forget to factor in taxes, insurance, mortgage payments, real estate commissions, and other marketing costs. 

#4 Don’t over-improve the home — this is not your dream home

One common mistake some beginning flippers do is they try to do too much to a house. The fact is that even in a seller’s market, you’re not going to get a home for more than the market is willing to pay. This has a lot to do with the neighborhood and the home itself. Remember that you’re not working on your dream home. You’re just working to get the home sold without overspending on repairs. For people with vision, it’s almost a creative experience imagining what a house can become. They easily get carried away, especially at first. Be frugal, be cautious with what you spend on repairs. 

Get the Right Loan Fast and Kickstart Your Flipping Dreams!

We didn’t even get to the money part. The kind of loans that you get are a central part of the house flipping business. Here at Entrust Capital Funding, we offer reliable hard money loans so that people don’t have to waste time going through banks. 

Ready to get your hands on some real estate investment loans and opportunities. We want to hear from you. Call Entrust Capital today

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. 

House before and after repair and renovation vector illustration. Flat design.

What You Need to Know About Rehab Loans and Your Options

By | El Paso, hard money loans, Home Buying, home renovation | No Comments

Flipping a home has several aspects to it. One is the financial side: getting the money, ensuring you have the funds ready to go for what you need. Another aspect is the hands-on aspect, which refers to the elbow grease needed to get a place up and running and turn-key condition. Here at Entrust Capital Funding, we help clients take care of the financial side so that they are at ease about having the financial backing they need to fulfill their vision. There are different ways to go about flipping homes, and one way to get there is through rehab loans. 

How Did The Concept of a Rehab Loan Originate 

Generally speaking, a rehab loan is a term used for a specific type of loan. It refers to when an investor seeks to buy real estate property in subpar conditions to renovate it and sell it for a profit. The idea is to renovate the property quickly and turn around and re-sell it for a better price in order to reap the rewards. A traditional mortgage loan would take too long and slow down the process needed to make flipping profitable and efficient. This is where a rehab loan can save the day. 

The term rehab loan is used in the United States and Canada. It was closely related to the hard money industry, which began in the 1950s. The term ‘hard money,’ however, originated as early as The Great Depression. When the crash hit, people became distrustful of banking institutions, and many people took their hard-earned money out of the banks, out of circulation, and put it in between their mattresses.

Without the money in circulation, lenders had to find other ways to get money to make loans. This led real estate to be used as collateral, and without much choice to get quick cash, many people took out loans against their homes. In the 1950s, changes were made to the credit industry that changed the way that people applied for these loans. The industry had its ebbs and flows, and since the 1990s, private lenders became a more popular choice for real estate financing. Investors realized that hard money loans offered benefits and perks that were not the same with traditional loans. 

What Are the Different Types of Rehab Loans? 

Rehab loans depend on where the funds are coming from. There are different types of rehab loans. The three main types include: 

  • Investment Property Line of Credit: This refers to tapping into your existing equity of a current home in order to finance the renovation work for a new property. This is similar to a home equity line of credit loan. 
  • FHA (Federal Housing Administration) 203 (k) loans: This loan is considered a rehab loan because it deals with a property that needs to be renovated, but it is for your personal use. It’s a way to purchase or refinance a home that is in need of major renovations and tag on the repair costs to your mortgage. The FHA 203 (k) loans offer a longer time to repay and lower interest rates. In order to get this loan, buyers must go through certain FHA – approved lenders. 
  • Hard Money Rehab Loan: These loans are great for real estate investors and buyers that have trouble finding financial assistance. Your income and credit scores are not a factor in qualifying for these loans. It’s all about the kind of collateral you can put on the table. For many real estate investors, the property in question is the very collateral they offer in exchange for the loan. 

A Closer Look at Hard Money Rehab Loans 

Hard money rehab loans are the go-to loan for many house flippers and those getting started in the real estate investment business. They are the get-in-get-out loan of choice. Flipping a property is meant to be a quick affair without the dragging processes of complex underwriting, credit investigations, and so forth. Many new investors do not have the capital at hand or the funds to see their first project through. This is part of the buyer’s initial risk, as they commit to the sale and the renovations. 

What Do Hard Money Lenders Look For? 

A hard money lender like Entrust Capital Funding will focus on the property in question. More specifically, we look at the real estate’s after repair value (ARP) when considering the final amount of your loan. Since the property is the main collateral, these assessments are made to cover the risk the investor is taking by lending the money. Depending on the property, a hard money lender can lend up to 75% of the total property value. 

Get Your House Flipping Started with Reliable Hard Money Rehab Loans 

Here at Entrust Capital Funding, there are no set specific requirements to qualify for a hard money rehab loan. We don’t look at your credit or evaluate debt history. Our investors are interested in investing in worthy real estate ventures. 

If you’re looking for fast money to make a real estate investment. Come talk to us. Call the professional team at Entrust Capital Funding and tell us more!

Real Estate Investing Forecast of 2021 and How To Move Forward 

By | El Paso, real estate investment loans | No Comments

Single family house on pile of money. Concept of real estate.The low mortgage interest rates of 2020 continue to be all the rage. The interest rates in the second half of the year went as low as 2.7% and this led many prospective buyers, to make the leap and start searching for their home. The economy also took many low blows, as small businesses across the country have had to close their doors. 

For small business owners and entrepreneurs, it’s been a difficult year to navigate, but it’s not all lost. Here at Entrust Capital Funding, we write a lot about the entrepreneurial spirit and how it relates to real estate investors. So while there are many uncertainties and unknowns, the year 2020 taught us that that is always the case. 

What We Learned from 2020’s Pandemic

The pandemic changed the business landscape, but just as some businesses flourished, others had to adapt, reassess, and maybe even start over. For people looking to find lucrative opportunities, this presented a ripe time for launching a new venture. 

Forbes magazine points out that while the pandemic put a lot of businesses in jeopardy, it is nothing new to see new types of businesses or a resurgence of old models when there’s a sea change. The argument points to several major enterprises that began during difficult economic times. 

During the recession of 1957-1958, the first Hyatt Hotel opened and rose to great successes. Microsoft was founded during the oil embargo of 73-75. The years following the 2008 housing bubble saw the emergence of popular startups like Uber and Airbnb. Perhaps these society-altering events force people to realign their thinking and change consumer needs and demands. As we slowly see our society return to ‘normal,’ there are likely to be permanent changes. 

The Real Estate Market for 2021 

As anyone in real estate will confirm, the housing market has been smoking this year. In the El Paso area, reports of hungry homebuyers running out of houses to buy made the rounds in the real estate community. A KFOX report as late as Sept of 2020—when El Paso was considered a hot spot for the pandemic—people continued to buy homes. The data pointed to more than 30 homes sold per day during August in El Paso county. The Fall made for the biggest home growth that many in the business have seen for many years. 

The main reason is low mortgage rates but also people who found themselves stuck at home or paying exorbitant rents, deciding that investing toward their own place was probably the way to go. Young Millennial buyers seemed to suddenly jump onto the market, as many found themselves to be in an economic position to do so. 

According to another report, Millennial and Gen-Z buyers are expected to play a growing role in home purchases and single-family housing starts are expected to grow another 9 percent in 2021. As the younger generation settles down and gets high-paying jobs, they become a good home-buying prospect. 

What Does This Mean for Real Estate Investment?

As far as real estate investment goes, it continues to show promise for the upcoming year. This is not only because the real estate market has shown to continue strong even through the harsher pandemic numbers, but because new home construction has slowed and this means that many older homes on the market that need remodeling are being scooped up as investment opportunities. Residential construction continues to face limiting factors. These include higher material costs (such as lumber) and longer delivery times for materials, skill shortages, and more. 

If you’re a real estate investor that is looking to flip homes and sell them in the greater El Paso area, this may be your time to jump on the opportunity. With many new home constructions lagging, people that are putting their homes on the market are being incentivized by the rising home prices. Many homes, however, will require major and minor renovations that can make quite the difference on a final sale price. 

There are other real estate investing options as well. According to U.S News, the most popular places to invest as the year of 2021 kicks off are:

  • Residential properties: The new work-from-home-model is changing the way people live and operate at home. They may find themselves looking for new spaces that accommodate the modern ‘online’ lifestyle. 
  • Industrial properties: Places usually used for storage and warehousing might have a high potential for many eCommerce businesses sprouting up. 
  • Commercial/retail properties: As many retail stores move online, their spaces will soon become available and can be converted or renovated for new purposes. 
  • Vacant land: Investing in vacant land is a little different but can be a great way to go into an investment for someone that understands zoning laws, construction, and more. 

As the pandemic forces many businesses to close their doors, many commercial spaces that can be transformed will be made available. As changing cultural trends continue thanks to the changing job landscape, the possibilities to turn real estate into a new and lucrative investment continue to remain positive. 

Looking To Dive Into Real Estate Investing in 2021! We Got the Right Solution. 

Before you can invest in real estate, you need to have a plan and some idea of how to obtain the funds necessary. Sometimes it can be harder than it sounds, but with Entrust Capital Funding, we can provide you with quick answers about your qualification to obtain a loan from us. We operate in El Paso and are helping many entrepreneurs start their enterprises with real estate and housing investment. Call us today and find out more.