The process of real estate investing is complex and ever-changing. It doesn’t matter if you’ve been doing it for 20 years, or if you’re just getting started.
Oftentimes, the best opportunities come from the ugliest homes. The key, especially with fix and flip property investments, is to remember the 70% rule. This single number can help you determine what price to pay for a fix and flip to help ensure profitability.
The rule of thumb: “Pay 70% (or less) of the ARV (after repaired value) of the property minus the repairs needed.”
If you can capture an investment property below the 70% rule, you are on your way to a very profitable investment opportunity.
When To Get Financing Approved For a Property Investment
Begin any investment opportunity by having your financing in-line and approved first. This allows you to act fast when opportunity knocks.
Find a lender who specializes in property investing, understands real estate investing and the opportunities that exist. They can help you determine 70% ARV and guide in and possibly even network you in the real estate industry to gain investment opportunities.
Whether you want financing for major renovations, a quick fix and flip, or a rental, hard money loans are typically the easiest and fastest way to secure financing for real estate investors.
What are the advantages of a hard money loan?
- Leverages your cash so you gain more opportunities
- Receive money fast, usually within days
- Easy and convenient
- No minimum FICO score for eligibility
- Open to non-owner occupied properties in disrepair
- Perfect for property flips, renovations, rehabs, rentals, quick investments
- No prepayment penalties
Find a hard money lender who is willing to help you on the best approaches to take for your fix and flip project. The tips and pointers they can provide are invaluable and can be the difference between failure and success. This type of help is something you likely won’t get with a conventional lender.
Catalyst Funding is an experienced hard money lender that provides lending for single-family residences, 2-4 unit residences, townhomes and condos in a variety of situations, including fix and flip, foreclosures, trustee sales, auctioned properties, outdated properties, neglected properties, permit issues, home inspection issues, vandalized properties, abandoned properties, fire and water damage.