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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!

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.

Preparing Future Homeowners: Requirements for Buying a Home in Texas

By | hard money loans, Home Buying | No Comments

Still of a conventional home with a Texas and U.S. flag hanging over the front porch and walkway.

If you’re interested in buying a home in the state of Texas, you’ve made an excellent choice. Real estate investors and homebuyers are in for a treat when deciding to reside in Texas, especially in major cities such as Dallas, Houston, and San Antonio. In order to diminish your share of challenges in the home buying process, it’s important to understand specific laws and issues. If you’re wondering what exactly you need to purchase property in the state of Texas, you’ve come to the right place! We touch on the requirements and steps it takes to successfully make a Texas home yours.

Assessing Your Finances and Do Your Research

One of the most important primary steps for looking and purchasing a home in Texas is to do some research. This research doesn’t have to be arduous, but it should be just enough so that you can gain a general understanding of how home buying works in Texas. Some of the key points you will want to look at should consist of credit score, average down payment, home programs, and mortgage payments. By reading up on these requirements, buying a home in Texas can be much more feasible for investors.

Finding a Real Estate Agent

Although the state of Texas is one of the very few that does not make it mandatory for an investor to hire a real estate agent but utilizing their help could make a world of a difference. By hiring a real estate agent to guide you through the home buying process, their presence minimizes the potential for errors in other requirements to buy a house in Texas. If you want to ensure that you are choosing a qualified agent for your home buying journal, it could be helpful to seek the wisdom of referrals and more.

Getting Pre-Approved for a Mortgage

The next step regards getting pre-approved for a mortgage, which is essential before making an offer after searching for investment properties for sale. If you are a first-time home buyer in Texas, it is crucial that you learn about the lender’s requirements.

Initiating the Property Search

You can start hunting down properties by scouring your desired area or by searching for local advertisements. Even better, you could search for investment properties for sale online, as 90% of real estate investors do.

Make a Written Offer

Once you’ve set your mind on a specific property, you can then move onto the next step of buying a house in Texas: making an offer. In Texas, offers to purchase must be written. This is one of the requirements to buy a house in Texas that a real estate agent can provide a significant amount of help for investors. The agent can review the contingencies and terms of the offer and any other associated legal aspects.

Have the Property Inspected and Appraised

The next step in meeting the requirements to buy a house in Texas includes the expertise of two real estate professionals: inspectors and appraisers. Whenever you are purchasing a home in Texas, these two professionals must be prevalent throughout the process. An inspector is available to assess the standards of the property, while an appraiser determines the property’s value.

Determine Escrow and Finalize the Deal

The following steps of buying residential property in Texas near the ends of the home buying process. A legal advisor, who can simultaneously be the agent, helps to determine escrow of the deal. Once escrow is determined and agreed upon, the closing of the deal can begin.

While some detailed specifics can be different based on your real estate agency and property, these are the general requirements and steps to buying a house in Texas. Above the requirements, it is essential that you take your time with the process, especially if this is your first time purchasing property. Never agree to anything in the deal until you come to a full understanding and level of comfort.

Entrust Capital Lending: Here to Accompany You Throughout the Process!

The Entrust Capital Lending group is just as passionate about working with investors and homebuyers as we are about providing loans for Texas homes. If you need a loan in a timeframe that is convenient and fast for you, we are here to help! Contact us today to learn more about how we can get you started.