- Not Obtaining Building Permits. Use licensed contractors and pull the correct permits to avoid lawsuits down the line.
- Not using a local real estate agent. Although the web makes a wide variety of resources available, fix and flip projects need proper assessment by a realtor to estimate the most accurate after-repair value (ARV) possible
- Using too fancy finishes. At some point of going higher and higher end you will hit diminishing returns, where the cost of the materials will not justify higher re-sale prices. This is especially true if the finishes greatly exceed those of other homes in the neighborhood.
- Doing a full gut-rehab when easy fixes would have done the job. Often, a property might only need simple fixes such as a paint job, floor polishing, new doorknobs, and new light switches to give it that refreshed appeal, and allowing for a flip without investing a lot of money in the rehab.
- Not being flexible on the project. If the market in your area takes a downward turn, for example, it might be best to hold the property as a rental (and refinance with a traditional bank) rather than take a loss on the sale.
- Incorrect staging. Hiring a professional will go along way in helping with open houses and pictures. You can also use a virtual stager for pictures (we would be happy to recommend one).
- Going too fast. Of course minimizing the holding costs is on every investor’s mind, but racing against the clock and making mistakes is a sure way to fall short on the profit you envisioned.
- Working on too many projects at the same time. The responsibilities with too many projects going on at once may snowball out of control, causing you to miss critical issues, and create a half-finished mess which will affect your reputation and profits. Thoroughly finish each project before moving on to the next.
Top 8 Mistakes to Avoid
- September 23, 2019
To get started with your hard money loan,
please call us at 212-537-5833 or text us at 917-267-9523.
please call us at 212-537-5833 or text us at 917-267-9523.
Hard Money Loans: FAQs
Hard money loans are short-term loans that are used to acquire investment properties to rehab and then flip for resale or rent. These loans are used by real estate investors and others who are looking to finance non-owner occupied real estate.
Yes, we can often pre-approve you on the same day as when you apply. For a pre-approval letter, please call us at 212-537-5833 or text us at 917-267-9523.
Yes, we do fund rehab costs through a hard money loan. In fact, we can fund 100% of your rehab costs. To do so, you will need to complete a portion of the project. We then send an inspector to review it, and we distribute the funds for the completed work. The entire process takes 2 to 3 days.
Yes, we provide extensions up to 6 months or longer on a case-by-case basis. We understand the timeframe complexities when rehabbing or building a new project – we will work with you.