Category Archives: Fix & Flip

In-a-Hurry Loan to Cover the Gap

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There are several reasons why a fix-n-flip investor might want to secure a fast loan to cover a gap. A gap loan, as the name implies, is a loan that bridges a span of time. It helps you gain control of a property quickly even if you are still scrambling to get all your paperwork done for a full rehabilitation loan.

A Buyer in a Hurry
At some time or other, you might face a seller in a hurry. One situation that puts a seller in a hurry is foreclosure. Many property owners in this situation are in denial so they wait until the last week or so, or even days, before the foreclosure sale to act on saving their credit. To save their credit, they must pay the bank all they owe on the mortgage right now. The house might actually be worth much more than what they owe if they have been paying on the loan a long time or put a large payment down on it. But, a foreclosure on their record will ruin their credit. So, for them, it is better to sell at a discount and survive to buy another house another day.

In this scenario, an owner in foreclosure has agreed to sell the property to you at a steep discount, but they need to close the deal quickly. You, the investor, want to buy this property and you make an offer. However, the competition is extremely stiff, and another investor is sitting in the wings waiting to obtain the property. Your offer locks up control of the property temporarily. You need to move quickly to secure a loan. Normally the loan process takes a minimum of 7 working days and typically takes 10-15 working days.

A Nonrefundable Deposit

Another reason you might need funding in a hurry is that you have stumbled upon a wholesale purchase with a tight deadline to close, perhaps 2 to 5 days. The property is ideal for your purposes and you want to make an offer. However, if you don’t get the deal closed by the deadline, you will lose the nonrefundable deposit you are required to put down and control of the property you are seeking.

 

mind_the_gap

Getting Control of the Property

Here is where obtaining a gap loan is useful. A gap loan allows you to purchase the property as is while you are in the process of obtaining a rehab loan. The gap loan can be secured in 2 to 3 days typically. Your strategy is to obtain control of the property through this gap loan, begin paperwork to refinance the loan immediately and eventually complete the rehab and offer the property for sale.

REI Capital Resources has funds available for fix-n-flip loans with terms up to 6 to 9 months with a minimum of 3 months.

Fix-n-Flip Option 2

E-mail or call for more information on minimum and maximum loan amounts, interest rates, terms, and fees for specific project. I can help you with first liens only and these loans are limited to the Austin, DFW, Houston, and San Antonio Metro areas.

Pat St.Cin

Patrick@reicapital.cash

512-213-2271

Austin, Texas

Commercial Real Estate: Warehouses & Fulfillment

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Malls on our Minds

Although the malls built in the 1970s are no longer thriving, they still have locations that can be reformed for commercial use. According to a Wall Street Journal video on May 6, 2019, Amazon is buying up malls because they are located in good commercial locations with access to massive spaces for building and parking, population centers for labor, and highways for shipping. In addition, the infrastructure is already in place. Amazon has bought Randall Park Mall in Cleveland, OH and Euclid Mall in Euclid, OH for fulfillment centers.

Although online purchasing is taking a toll on brick and mortar establishments and causing mall closures, many creative uses for the buildings and parking have been devised: data centers, microlofts (in providence Rhode Island), office space, film studios, charter schools, resorts, medical centers, and self-storage units.

With online purchasing comes the need for warehouses. Take a lesson from Amazon and when you are looking at commercial real estate to purchase, fix and flip or fix and rent, look for these 4 features of the location:

  1. Big space, massive space
  2. Residential areas nearby for the people who will work in the building
  3. Nearby highways with good access on and off
  4. Infrastructure already in place.

Let me know if you have found any deals this month that you know you can turn around and resell with enthusiasm. I hope that I can be of help to you this month.

I can be reached at
Patrick@REICapital.cash
512-213-2271
Austin, Texas

References

WSJ.com, commercial real estate, video.

Mall image: Alina Zienowicz Ala z [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0/)%5D

2 Home-Buyer Surveys of Note

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Buyer Surveys

Earlier this year, the National Association of Home Builders (NAHB) surveyed nearly 4,000 home buyers, those who have either recently purchased a home or plan to purchase a home within the next 3 years. Realtor.com also reviewed home transactions between January 2018 and September 2018 and compared them to the 2017 home sales to come up with some statistics about who will drive home sales in 2019.

These statistics become meaningful when you apply them to your own real estate investment plan as much as possible. As you approach your real estate fix-n-flip project, it is important to apply the money in your budget toward the areas that will give you the most buyer draw for the dollar. This is not easy, and the target is constantly moving as new products come onto the market, new buyer demographics emerge, incomes fluctuate, and young buyers learn from their parents, study what their parents have done and listen to what they would have done differently.

Millennial Generation Buyers

When you first start looking for the right property to remodel, you may want to consider looking in areas where the largest group of people are looking. The realtor.com survey of emerging home buyers in 2019 points out that affordable homes, jobs, and the availability of entry level homes are “magnets for young buyer.” A large segment of the millennial generation will be turning 30 years old in 2020, so they are starting families, and, as rents rise, moving out of apartments and buying houses.  According to the NAHB survey, 64% of buyers preferred to buy a home in the suburbs. 24% of buyers were looking for a house in a rural area. 11% of buyers were looking for a house in or near the center of a city.

Storage and Energy Efficiency

The information in the NAHB buyer survey gives you some general guidelines on what home buyers are looking for in their homes. After location, buyers prefer

  • laundry rooms
  • energy saving appliances
  • energy saving insulation
  • energy saving windows
  • home storage
  • garage storage
  • walk-in pantries
  • hardwood flooring
  • patios
  • exterior lightening

A few rising trends were noted in the NAHB buyer survey that may pique your interest and inspire some research, including: houses are getting smaller, engineered quartz countertops, vinyl and resilient flooring, wireless controls, open interior and exterior spaces in kitchens, and higher-end fixtures in bathrooms, such as wall-mounted sinks, faucets, and toilets, are becoming more popular.

REI Capital Resources built its reputation on finding private funding for investors for quick turn purchases and difficult situations.  This is still true today.  

Give me a call or send an e-mail and share with me your plans and needs, and I’ll see what lending solution I can generate for you.

Patrick St.Cin

512-213-2271
Patrick@REICapital.cash
Info@REICapital.cash Menti

Thinking Like Your Buyer: Color

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As an investor in fix-n-flip real estate, you already know that a fresh coat of paint is the cheapest and easiest way to refresh a home. I suppose it is possible, when you are an old hand, that the drama of picking a wall color wears off, and you go for cream or white every time without even hesitating over the luxurious deep greens or the vibrant bright blues on the paint chips.

I don’t think I have ever gotten over the struggle with color. There are so many to choose from. Each color brings its own feeling to a room. Yellow reminds us of the sun and mint greens lower blood pressure and light greens inspire and renew. I still remember the issue of Martha Stewart Living that featured wall colors that matched the colors of farm fresh eggs. I even bought chickens and took pictures of the eggs in a collander myself.

IMG_00003744

When you are selling a house, everyone advises you to paint with neutral colors because you don’t know who will buy the house and what their color choices are.

In 2019 there are a lot of beautiful neutral colors to choose from. A couple of my favorites are hazelnut and lilac grey. The hazelnut is a combination of cream and beige and the lilac grey is a warmer gray.  I found some of these colors in an old wall paper, but sometimes really old is…NEW!

There is also a newer color that I really like called “greige.”  Greige is a grey and beige mixed together, the color of stone.  Stone_steps

 

Your buyers may prefer houses that have open, multifunctional spaces. A beautiful neutral can go a long way in a home, through the living room, kitchen, home office, hallways, and bedrooms. In fact, many millennials and generation Xers work at home and have home offices. According the home office warrior, good colors for a home office include both deep gray and dove grey, and greige.  The deep gray represents security, reliability, intelligence, and organization, good concepts for home and office.  The dove grey brings to mind logic, modesty, and efficiency.

A neutral throughout a home will go with anything and allow the new owner to add a wall of color or a splash of color here and there to suit their own tastes without having to repaint the entire home.

If you have a real estate investment project in mind and know how much you need to fund the remodel, give me a call or send an e-mail and I’ll see if I can fund it for you.

Patrick St.Cin
W – 512-213-2271
Patrick@REICapital.cash

 

 

Needed: Homes for Modest Incomes

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“The lower end of the market is hot, while the upper-market is not,”

Lawrence Yun Chief economist at the NAR

According to the National Association of Realtors, developers built more expensive homes in recent years, while middle-income Americans are eager to buy cheaper properties. Thus, the high-end market has slumped and the market for mid-priced homes has increased slightly, equaling a 4.9% decrease in existing home sales in February 2019.

The article “Home Sales Fall 4.9% in Slow Start to Spring Buying Season,” Associated Press Wire Service, by AP Economics Writer, Christopher Rugaber. also says that mortgage loan applications are up, but cites no sources for that information.

As always, do your research and put your money where you see there is a need. In that market, it will sell.

gray house under blue and gray sky

If you find that modest home that you can remodel for a middle income family, let me know.  I have the funding tools to help you.

REI Capital Resources is a loan originator for select investor single-family residential projects. Our goal is to provide fast closing loans to fund your investment projects, so you don’t lose a great deal. This includes bridge loans for the acquisition of property.

Give me a call or send an e-mail for assistance funding your project.
Patrick St.Cin
512-213-2271
Patrick@REICapital.cash

 

 

A Family of Land Websites to Admire

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I recently stumbled onto a family of fascinating websites for those of us who love land.   Whether you are interested in a vacation rental or garlic farming, solar farming or raising timber, hunting quail, or building a deer hunting preserve, this family of sites has much to offer those with land on their minds.

agriculture barn clouds cloudy

The first one I discovered was landflip.com because I was thinking about investing in vacant or rural land.  Land Flip lists the best vacant and rural land available.  So, if you  are looking for hunting land with a cabin, 100 acres in Sierra Blanca, or a poultry farm in Arkansas.  This is the site to visit.  And it is a beautiful site with property descriptions and lots of gorgeous land photos in its galleries.

The sibling in the family is lotflip.com.  Here is the site to go to if you are looking for commercial sites and land. Some of the same properties appeared here as on Landflip.com, like the poultry farm and the land in Sierra Blanca, but they were joined by industrial sites in New Jersey and housing sites in Northern Arizona.

The middle child in the family is farmflip.com, a site that features just what it promises, farms, but with much variety. Here you can find that horse farm in Wyoming, hobby farms, a working cattle ranch in Sabine County Texas, and timber tracts in Florida.

Auctionflip.com is the next site, and it features upcoming auctions, including galleries showcasing fenced land in Kansas, residential development land for auction in Indiana, a home on 15 acres in Platte County, Missouri, and a log home and bed & breakfast lodge with 52+ acres in Houston being auctions on April 27th at 10 am. The property includes a barn, a shop, horse stalls, feed room, chicken coop, dog kennels, and 2 ponds. This could be an interesting investment for the right person.

If your dream involves commerce, hard work, and land, and if you are looking for a piece of urban or rural land to perform on, the not-so-little brother in the family of websites is the one to visit, commercialflip.com.  I think this site had my favorite unique commercial opportunity, a trading post with 34 cabins in Gunnison County, Colorado, right in the heart of the Rocky Mountains. As a kid, I always dreamed of my family owning a trading post of bar in the mountains.  This would have been the place.  The site also featured a gallery of other commercial opportunities, like a Lake Michigan vacation home, a river ranch with cabins in Missouri,  and a family restaurant and motel in Michigan.

Finally, the daddy and the mommy site of the family, as far as I am concerned, where you can learn all about land is landthink.com This is where the blogs, articles, facts, and opinions live.  Here you find information to use and admire about topics like

  • the unique gourmet crops that will make money for a farm,
  • when to get into debt for land and when not to,
  • how to get a timber appraisal,
  • how to organize a community garden, and
  • how to clear land.

I am not sure but this might be my last post. I am off to plant garlic and willow trees.

Not really. But, I do recommend studying these websites for information and possible deals for your next investment, maybe a vacation rental.

Give me a call or send an e-mail and share with me your plans and needs, and I’ll see what lending solution I can generate for you.

Patrick St.Cin
W – 512-213-2271
Patrick@REICapital.cash
Info@REICapital.cash

 

 

 

 

Delicious!

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Did I mentioned avoiding termites when buying a house and appealing to the senses when staging your house for sale?  Yummy qualifies.   Looks like that is a tried and true professional fix-n-flip strategy.toon779-1

My I am still focused on funding your success and I have more tools to work with.

Contact me at
Patrick@REICapital.cash
512-213-2271

Used with permission.

 

 

 

 

Thinking Like Your Buyer: The Joneses?

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The Neighborhood

As part of your regular routine, before you invest in a house to fix-n-flip, you will be researching the after-repair value, figuring out what price the house will sell for after it is remodeled, and how it fits in with the other houses in the neighborhood. While you are doing this, picture your buyer. Are they young and first-time home buyers? Do they have children? Are they older and downsizing?

If your buyers take the advice of  Investopedia’s “How to Buy Your First Home” a tutorial by Amy Fontinelle, they will want to pick a neighborhood that is a close fit to their own lifestyle so they will feel at home with their neighbors. They can find facts and statistics about a neighborhood’s average income and college educations on websites, forums, and neighborhood message boards, places you will want to look too.

Pressure to Spend
Like professional landscaping and groomed yards, expensive vacations, weekly maid service, landscaping contractors, cosmetic surgery, boats, restaurant-quality kitchen appliances, certain types of vehicles, and country club memberships can put pressure on people who live in neighborhoods that encourage conspicuous consumption. To be frank, will your buyer feel comfortable or will they feel pressure to keep up with Joneses who live next door if they come to live in the neighborhood where your fix-n-flip project is located?

“Stop Keeping Up With The Joneses – They’re Broke.”  Investopedia, (2014)

Lisa Smith, the author of the article, “Stop Keeping Up with The Joneses,” reminds us that spending money for the sake of flaunting your wealth, once something only done by celebrities, has come to suburbia, and to regular neighborhoods all over the world, but not necessarily for the good of their financial or their blood pressure.

 

white cruise ship on the sea

Photo by GEORGE DESIPRIS on Pexels.com

So, if you are remodeling a modest house, it might be best to find one in a neighborhood that is not extravagant about spending for the sake of the modest buyer who might buy your modest house.  This will speed up your investment turnaround.

It is true that you cannot always pick the house and neighborhood where the greatest deal pops up, but remember, you only get your money out of the house, if you sell it; and, if you are going to invest your money, time, and credit into a house to resell, be sure you can sell it to a real person in as short a time as possible.

Please give me a call when you find that perfect investment in the just-right neighborhood. I am still focused on funding your success and I have more tools than ever to work with.

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash

 

References

Cruise Ship: Photo by GEORGE DESIPRIS on Pexels.com

Smith, Lisa, Stop Keepng Up With The Joneses – They’re Broke , Investopedia 

Fontinelle, Amy, How to Buy Your First Home: A Step-By-Step tutorial, Investopedia

In the Path of a Storm

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Alert: Harvey, Irma, Rita, Katrina

Don’t worry, it is not hurricane season yet. However, there are things you need to know now, before the storms approach.

I was just looking at reasons a real-estate investor might lose money on a fix-n-flip project or a vacation rental property deal and stumbled upon natural disasters as a possible cause of investment loss. After reading several articles and searching the real estate websites, I ran into tips for real estate investors facing an approaching natural disaster at yourflipcoach.com, Your Virtual Real Estate Coach. Be sure to visit Ryan’s site if you have a minute.

Insurance Binding
First, as a practical matter, it is very important to know that insurance companies will not bind a new policy or add additional coverage to an existing policy if a hurricane or large storm is headed for Texas. This is important for you to know if you are planning to invest in a property in Texas.

Make sure a hurricane is not on its way. Buy insurance that covers flood and wind damage and replacement costs, and don’t buy the property or the insurance if you can’t bind an insurance policy. Both you and your lender will want insurance on the property. Buy flood and wind insurance on your new property and make sure insurance binders are active well before the next storm.

Closings Disrupted
Second, when you have found a buyer and a storm is approaching, time the closing of the deal so that closing is complete well before the storm event. The storm can get in the way of your closing in so many ways. Following a storm, roads and properties may be damaged and inaccessible. Even if you are dry, routes in and out of your area might be blocked or flooded. You could lose your buyer because they cannot get to you or to the property, or because the property is damaged.

A study performed by the Federal Reserve Bank of Dallas concludes that the “typical hurricane raises real house prices and, to a lesser extent, reduces real incomes for a few years.”

New Business Opportunity 5 Years Out
Third, be ready for new business opportunities following a storm. Damaging natural disasters and the insurance money that comes into the market after they pass can create new opportunities for real estate investors. Some property owners may want to sell, particularly if they did not have insurance. Even if they are insured, many home owners will take their insurance check and sell the property for whatever they can get. Some lots are sold at land value after the home was removed; but once a house is rebuilt, it can be resold again at near the same price in future years (about 5 years).

aerial view atmosphere clouds cold front

Residential Prices Rise Because Housing is Needed
The value of property that is high and dry after a hurricane will increase because homes are lost or uninhabitable. Housing will be needed. And, buyers and investors will be seeking solutions.

An article in Forbes by Jordan Lulich points out that right after a storm, home sales go down because property owners are too busy cleaning up. According to his article, two months after Hurricane Harvey, 31% of residential neighborhoods saw an increase in median house prices here in Texas.

It is still smart to invest in real estate in hurricane prone areas because residential property values increase over time. Repair costs associated with storms are certainly worrisome. Just be sure to buy insurance that covers wind and water damage to protect your asset.

Please give me a call when you find that perfect investment, and I can help you fund the project.

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash

 

 
References
Ryan Kuhlman, January 8, 2018, Natural Disasters and Real Estate Investing, https://yourflipcoach.com/natural-disasters-and-real-estate-investing/

Jordan Lulich, June 28, 2018, Does Hurricane Damage Negatively Impact Your Real Estate Value/
Forbes https://www.forbes.com/sites/jordanlulich/2018/06/25/does-hurricane-damage-negatively-impact-your-real-estate-value/#381ca6d5107b

Murphy, Anthony and Stroble, Eric, October 2010, The Impact of Hurricanes on Housing Prices: Evidence from US Coastal Cities. Federal Reserve Bank of Dallas, Research Department, Working Paper 1009, https://www.dallasfed.org/

 

ILS is Now REI Capital Resources

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“Focused on Funding Your Success”

Formerly Investor’s Lending Source. New name, new products, same management

Hard Money Lending

REI Capital Resources is a funding source for SFR Fix-n-Flip, Fix-to-Rent, and Refinance projects as well as larger commercial projects such as office buildings, 5-40 door multi-family buildings, and many others.  These programs vary wide and far throughout the gamut of lending. Call or e-mail for more information.

Long-Term Rental Financing

REI Capital Resources is instrumental in finding conventional non-conforming lenders for investors using their business entities and, also non-entity, personal holdings, as a method to purchase, refinance, and cash-out of rental properties.  These loans are geared toward single-family residence properties with up to 4 doors for a given property.  Portfolio loans are also available. Earn money continually from your rental property. You can get there from here with a fix-to-rent loan.

Short-Term Rental (Vacation or AirBnB) Lending

As the lending industry adapts to the market place, REI Capital Resources is adapting too and is now able to provide funding for the short-term vacation rental market.

You Can Get There From Here

REI Capital Resources built its reputation on finding private funding for investors for quick turn purchases and difficult situations.  This is still true today.

Give me a call or send an e-mail and share with me your plans and needs, and I’ll see what lending solution I can generate for you.

Patrick St.Cin

W – 512-213-2271
Patrick@REICapital.cash