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Hard Money Loans: Common Pitfalls to Avoid and What to Know Before You Apply

Hard money loans (also known as private money or private capital loans) can be a great alternative to traditional bank loans. The approval process is fast and the loans are typically easy to get. In addition, hard money lenders tend to not pay as much attention to things like credit scores or problems with a user’s credit history. A lack of income is also not as important as it is for a bank or another financial lender. But are hard money loans really too good to be true? There are a few things to remember before you apply. The fact is, lenders still want to be sure that you’re worth the risk to loan money to, and since they’re not putting as much of an emphasis on the traditional documentation like income, credit score and credit history, they still want to be sure that you’re going to repay the loan. Here’s what they’re really looking for: You’re Willing to Put Some of Your Own Money Up for Investment You can get hard money loans up to 100% of the purchase price, but lenders u
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Renting vs. Buying: Could This Type of Loan Help Make Home Ownership a Reality?

According to a survey done by Freddie Mac, over 80% of those surveyed said that renting was more affordable than owning. A year prior, only 67% of users believed this to be true. The question is, why have nearly 20% of people changed their mind about home ownership? And can anything be done to make home ownership more affordable? The Home ownership Hurdle In a perfect world, renters would likely love to be homeowners, but they simply can’t afford it. In addition, real estate agencies across the country are starting to see the inventory of available homes dry up. With fewer homes on the market, the competition becomes fierce and renters have even less choices. With fewer homes to buy, the demand for rentals increases and landlords raise prices. Thus it creates a constant cycle of trying to save for a down payment on a home, but also having to save enough money for increasing rents. This creates the impression that people are “locked in” to renting, even though there are effort
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How to Win a Real Estate Bidding War

So you’ve done it. You’ve found the home of your dreams. It’s perfect and everything you ever wanted. Except there’s just one problem. Someone else feels exactly the same way. And when you make an offer, they do as well, escalating a bidding war. In fact, sometimes it’s not just one other person or couple. Sometimes, in particularly competitive real estate areas where the markets are hot and homes are in-demand, you could be competing with dozens of other people or even investors. Getting embroiled in a bidding war doesn’t necessarily mean that you’ll miss out on the home, but it does test the limits of what you want to pay for it. So how can you win out over the competition? Let’s take a closer look: Increase the Amount of Your Down Payment or Earnest Money This strategy, in essence, forces you to put your money where your mouth is. In terms of an earnest money deposit, it shows that you’re very serious about buying their home. Investors tend to flock from home to home just loo
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Why The Self-Employed Have a Harder Time Getting Home Loans

When you’re self employed, you get to enjoy all sorts of freedoms, such as being your own boss and setting your own hours. But one of the things you’ll learn quickly is that other things, such as getting a loan for a home, can be unnecessarily difficult. Most people who aren’t self employed have a fairly straightforward process. They’ve got their W-2 and income records that show stability and a consistent income. The self employed don’t always have that luxury. You may need to provide 1099s from anyone that paid you over the last two years, In addition, you have to provide accounting records so that lenders can verify how much you made after expenses were taken out. Of course, that isn’t to say it’s impossible to get a mortgage. You’ll just need to be better prepared and organized. Here’s what you’ll want to have before you approach your bank or lending institution:   A copy of your free credit report  A letter from your tax preparer showing your gross and net annual income fro
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How to Estimate the After Repair Value of a House to Flip

Want to start flipping homes but don’t know what to look for when evaluating a property? It’s an easy trap to fall into, especially for first-time investors. You have so many questions and no real direction -- until now. Let’s take a closer look at one of the key factors that will determine how quickly a fixer upper might sell after rehab -- its ARV or After Repair Value What’s an ARV? The ARV is a metric used by investors in order to determine how “strong” an investment property is. Essentially, it’s an estimate of what a property is worth after all of the work has been done. You simply estimate how much rehabilitation has been put into it, along with the sales of similar properties in the neighborhood (once the appraisal of your own property has been done). This gives you a general number to aim for when it comes to selling the property on the real estate market. How Do You Calculate the ARV? So, how exactly do you calculate this number? The first step is to apply for a loan.
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Fixand Flip Properties: How to Find the Best

What real estate investor doesn’t want to take advantage of more deals, especially fix ‘n’ flip deals in hot, in-demand real estate markets? But where do you find these diamonds in the rough? The good news is that for the keen-eyed investor, there are many resources available -- you just have to know where to look! Wholesalers  Wholesalers are fantastic options for real estate investors -- they’re like the human search engines of fix’n’flip deals. They find these deals, along with the seller of the property in need of repair, and then send the property details to a buyer through a real estate investing network at a great price. If there’s a match in terms of what the investor is looking for and it looks like a good deal, then the investor works with the wholesaler to buy the property. It’s that easy! Auction Websites There are a variety of auction websites out there that host properties in need of repair, including Auction.com and Zillow.com . As an investor, you can search th
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How Much Will I Make on My Real Estate Investment?

Whether you’re new to the world of real estate investing, or you have some experience investing in real estate, you rightfully want to know “how much will I make on my real estate investment?” Of course, there is no “one size fits all” approach to real estate investing, just as there is no one single answer or guide that you can follow that will tell you exactly how much you’re going to make. It depends on two things: The state of the real estate market  The right investment decisions  The market will rise and fall with economic, financial and other details, and the market can be experiencing very different effects in different locations, but when it comes to real estate investment advice , at LBC Capital, we can absolutely offer you some tips to help you make better real estate investment purchases. How to Choose a Great Location  Investing in real estate first and foremost involves choosing a great location. Initially, some areas may be priced higher than others, but that
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