Category Archives: Fix & Flip

Downtown by the River

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If you watch much of the show “Buying Alaska,” you will be very familiar with the phrase, “It has a view.” In Alaska, it is all about mountains, glaciers, and sometimes a lake, but in many cities the desired view involves an urban river. According to an article in the Wall Street Journal, “The Latest Housing Hotspot Is Downtown and by the River.” I think that San Antonio already knows this.

“Urban Energy and Natural Beauty”

Ceclie Rohwedder, (WSJ, December 6, 2018) writes about couples in Minneapolis, Washington DC, and Omaha trading in their country homes for homes in remodeled power plants and other industrial buildings in downtown areas along urban rivers, buildings that have been turned into modern condos. What does their new home offer, she asks? “Urban energy and natural beauty” one couple says.

I must agree. Watching a river is like watching a fire, its mesmerizing. But it is interesting and beautiful too with boats, birds, and fishermen. And those old buildings left over after industry has moved on, I have often looked at them, the old brick warehouses and mills that sit along the elevated freeways of our cities, the ones with the fading billboards high up on one corner, and vacant windows. What is the architecture like, I’d wonder? They look so sturdy. They are not going to come down soon, but who is going to use them.

Americans Just want to Live Downtown

Well the city planners, developers, and investors are way ahead of me. They are turning these behemoths into housing with a view, housing near culture and sports arenas, and water. Young professionals and retirees alike, it seems, crave community and walkability along with a touch of nature. And Americans overall (this year anyway) want to live downtown. An urban riverfront close to downtown offers work, culture, and play.

These are the areas that are drawing people to look at the old and want to make something new out of it. It is the buying and the fixing up of the building that is the investment. But investors are doing this all over the country and people are buying.

So, even if you are not up for buying and remodeling the old paper mill down by the river, when you are looking for a house to buy as a fix-n-flip investment, do not forget to scout around in these riverfront areas of your town. There, in the shadows of the big buildings, might be some smaller projects, homes or shops, more to your liking.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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Museums and Investment

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The Guggenheim Effect

When you are buying a house to fix up or lending money for that fix-n-flip project you hope to profit from, the value the property has now and will have after the renovation is complete is what you are focusing on. You will be thinking about neighborhood and what makes a neighborhood a good place to live. These days, according to Alina Dizik of the WSJ, you should look around for a nearby museum.

Museums are revitalizing neighborhoods all over the world. The neighborhood revitalizing phenomenon of a museum is called the Guggenheim Effect. According to the Economist and the WSJ the Guggenheim Effect is the phenomenal revitalization of an industrial town that was dying, Bilbao in Spain in this instance, into a “sleek tourist destination” by the construction of a museum (Economist).

Walkability, and Safety, Interesting Things to Do

According to research done by Stephen Sheppard, an economics professor at Williams College in Massachusetts, “property values of homes near museums rise between 20% and 50% over the course of five years (WSJ ). ” Homebuyers, according to Dizik, are drawn to a museum building’s bold architecture, its rotating exhibits, “its guest lectures, and attractive indoor and outdoor common areas.” Some are looking for safety and amenities in one place. Entertainment and restaurants that you can walk to are also big draws.

There are museum districts in several towns in Texas. Look around your town and see if a museum is raising property values near you. This may be where you want to invest next.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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Mercedes-Benz Museum in Stuttgart, Germany, during blue hour.  Julian Herzog [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 4.0

Austin Museums

In Austin, the museum district is more of a museum partnership and there are many museums in the downtown. There is a plan here to connect the walking and biking trails into a big loop of urban trails that will extend 30 miles, traversing the city from Lady Bird lake to Walnut Creek Metropolitan Park, creating a safe walkable and bikeable commute route through downtown. So living near or on that route may be attractive. http://www.austinmuseums.org/

Mexic Arte Museum, 419 Congress Ave

The Blanton Museum of Art, University of Texas Campus

The Harry Ransom Center, 300 W. 21st street, University of Texas Campus

Mondo Gallery, 4115 Guadalupe St

Bob Bullock Texas State History Museum

Yard Dog Art Gallery, 1510 S. Congress Ave.

Arthouse at the Jones Center, 700 Congress Ave.

Houston Museums

There is one in Houston and it boasts 4 walkable zones, 19 museums, and over 2,300 residents according to http://houmuse.org/. Homes in the museum district sell faster than average compared to other neighborhoods in Houston. Realtor.com The neighborhoods and surrounding area are a mix of historic homes with character and charm, to modern townhomes, and high rises.

Museum of Fine Arts Houston Expansion

Moody Center for the Arts at Rice University

The Houston Center for Contemporary Craft

Czech Center Museum

Buffalo Soldiers National Museum

Lawndale Arts Center

Houston Museum of African American Culture

Children’s Museum of Houston

Houston Museum of Natural Science

Dallas Museums

In Dallas, the museum district is the Arts District downtown. It is a cultural hub of music, art, and theatre. The Dallas Arts District is bordered by St. Paul Street and Ross Avenue as well as major throughways Woodall Rodgers Freeway and Central Expressway. http://www.dallasartsdistrict.org/

Dallas Museum of Art

Modern Art Museum of Fort Worth

Nasher Sculpture Center,

Perot Museum of Nature and Science

Kimbrel Art Museum

Dallas Contemporary

Meadows Museum

San Antonio Museums

In San Antonio, a river walk extension completed in 2009 is called the Museum Reach. It extends past the zoo, the Japanese Tea Gardens, Brackenridge Park, the Pearl District, and three of San Antonio’s museums, all listed below. https://www.thesanantonioriverwalk.com/explore/museum-reach

The Do Seum, San Antonio’s Museum for Kids, 2800 Broadway

The Witte Museum, 3801 Broadway

San Antonio Museum of Art, 200 West Jones Avenue

 

What do all these neighborhoods have in common, interesting things to do, walkability, and safety.

References

Dizik, Alina, To Discover an up-and-Coming Neighborhood, Look for a Museum, The Wall Street Journal, November 25, 2018

The Economist, The Guggenheim Effect, Can other cities imitate Bilbao’s cultural-tourism success? August 18, 2018

 

 

 

 

How to Use a Hard Money Loan to Get Your Real Estate Property Ready to Sell

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How Much Money Do You Need?

There are some basic things you need to know before you can get a hard money loan. First, you need to know how much you need to borrow and how much collateral you have. You begin by finding out how much your real property (house or apartment complex) is worth as is.1 Note the words “as is.” You can get this information from a real estate appraiser. Then you ask them to make a second estimate about how much more the property will be worth if obvious repairs are made.

IMG_00003652Next, get a remodeling contractor to give you a bid on the repairs and a plan or time frame the repairs will take. You might want to get several bids and choose the one that looks best to you.

How Much Collateral Do You Have?

Second, find out how much you owe on the property. The difference between the amount you owe and the appraised value of the property is your equity. It is the equity that will determine how much the lender will lend you.2 Compare the amount of the cost of the repairs to your equity after the repair is make. If your equity is larger than the repairs, you might be able to make a profit after paying off the loan.

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The amount of money you need to borrow is the amount the repairs will cost plus a cushion of maybe 15 percent. The amount of collateral you can offer the lender is the equity in the real property. If the equity value of the real property is larger than the amount it will take to fix the property up, you have collateral to get a hard money loan.

Who Are the Lenders?

Hard money loans are typically issued by private investors (individuals or groups) lending their own money to borrowers with real property. The real property is their protection for making the loan and will be taken if the loan is not repaid. The primary basis for making a hard money loan is the liquidation value of the collateral backing the note.3  While the bank on the street corner will check basically everything before issuing a loan, including your credit scores, your income, the stability of your income, any missed payments, the amount of outstanding credit you have, and how the internal revenue service feels about you, the hard money lender will be are more interested in the value of your collateral than in your credit history. The hard money lender will determine the value of the property by getting an independent appraisal.

How Much Will It Cost Me?

Interest rates on a hard money loan will start at about 7.7 percent.1 The rate will depend on several things, including the liquidity of the asset. If the house you are repairing is in a bad neighborhood, it might be hard to sell even after it is remodeled and thus the interest rate on the loan will be higher. Broker fees also apply if a broker helped you find the funding source.

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The broker offers personal service to the borrower and administrative service to the lender. They give advice, do the paperwork, and make the phone calls involved in the transaction. They will also have the day-to-day experience and contacts to find the best rates for you. They then pass on the completed application to the lender.

Summary

In summary, if you are in a bad credit situation, have equity in real property you own, anticipate a project that will not take too long, and need money quickly, the hard money loan is probably for you.

If you find a deal, give me a call for a quick closing fix-n-flip rehabilitation loan. You can e-mail too.

Patrick@InvestorsLendingSource.com

Austin, Texas

512-213-2271

References

1. Hard Money Loans: A Complete Guide. California Hard Money Direct. Available at https://californiahardmoneydirect.net/2017/04/21/hard-money-loans-guide/. Retrieved November 2018.

2. Justine Pritchard, Hard Money Basics, How Hard Money Loans Work. Available online at https://www.thebalance.com/hard-money-basics-315413. Updated October 31, 2018. Accessed November 2018.

3. Wikipedia. Hard Money Loan. Available online at https://en.wikipedia.org/wiki/Hard_money_loan/. Accessed November 16, 2018.