Tom Spaniel

Preston Hollow Financial Services, Inc

Is a Hard Money Loan the Right Strategy for You?

by

Is a Hard Money Loan the Right Strategy for YouWhen used as a part of an effective real estate investment strategy, hard money loans are an excellent tool to quickly increase holdings without risking existing properties. However, these loans aren’t for everyone.

What investors get the most value from hard money loans?

Investors With Less-Than-Stellar Credit

Investors with credit challenges can qualify more easily for hard money loans. That’s because these loans aren’t based on the borrower. While you will have to prove a measure of creditworthiness, hard money lenders are more interested in the property you plan to buy. If you default on your payments, the lending bank simply takes possession of your property. For that reason, high-value properties in good condition fetch the best terms with hard money lenders. 

If you’re turned down for more conventional funding sources, you may still be able to move forward with a hard money loan for the right property.

Cash-Strapped Veteran Investors

When the market is hot, it’s not unusual for an investor to sink the majority of their liquid assets into new properties. However, this can leave them left out in the cold when new properties come up for sale.

Experienced flippers who are temporarily out of cash can use hard money loans to fund the purchase of additional properties. This allows them to continue expanding their holdings without compromising money earmarked for other projects. The short loan term is no problem for these investors since they know a property sale is always imminent.

Quick Investments: When You Can’t Wait

Sudden auctions can be a blessing to real estate investors. Sometimes, however, these deals pop up at the least opportune time. If you have your eye on a property that promises to go fast, a hard money loan can get you the cash you need in less time than conventional sources. That means you can take advantage of rock-bottom cash auctions quickly.

Since hard money loans don’t have the most favorable repayment terms, many investors choose to convert them into more conventional loan structures after the initial purchase. This strategy allows investors to participate in quick sales without sacrificing too much profit to interest payments.

Hard money loans are a unique source of funding for real estate investors. Use them wisely to realize the benefits and increase your investment income.

Your trusted home mortgage professional can help guide you through all of your financing options. Be sure to set an appointment when you are thinking of investing in a new property.

Auction 101: Bidding On Your First Property

by

Auction 101 Bidding On Your First PropertyWith the right combination of strategy, knowledge, and luck, flipping houses can create big profits for short-term investors. However, your path to success starts at your first auction.

For first-timers who are intimidated by their lack of experience at public auctions, follow these steps to ease the confusion of your first property purchase.

Locate Auctions In Your Area

Finding live auctions is as simple as an internet search. Websites run by government agencies list homes that have been seized due to tax liens or foreclosures. Try searching databases maintained by:

  • Fannie Mae
  • The FDIC
  • The US Department of Housing and Urban Development

Another option is your local newspaper. Banks publish foreclosure notices in the public notice section. You can also find advertisements from auction companies and information from the sheriff’s or county tax collector’s office that helps you hunt down low-cost properties.

For busy investors who plan to use real estate as an extra income, it could be worth your while to enlist the help of a professional real estate agent. They often keep lists of homes in foreclosure in the surrounding area.

Assess Available Properties

All properties are not created equal. To find the right fit for your project, find the following information for each potential listing.

  • Current bid price
  • Previous purchase price
  • Length of time property has been unoccupied
  • Property condition
  • Number of bedrooms and bathrooms
  • Sales history of homes in the surrounding neighborhood

This information isn’t always readily available. You may be able to find more information via an MLS search, public lands records, or various real estate websites that publish property data. Of course, if you’re working with a real estate agent, they will provide all the data you need to make the right decision.

Some auction sites include pictures and map data. At other auctions, bidders may be allowed to visit the property or hold open houses before the sale occurs.

Perform A Title Search

When you’ve found a few properties that you like, take some time to do a thorough title search. This process ensures your property doesn’t come with some unfortunate surprises.

During your search, you’ll need to:

  • Obtain records from the tax assessor to verify the tax status of the property.
  • Locate the property’s deed either physically or online.
  • Investigate the property’s sales history to ensure no one else can claim ownership.
  • Check for liens, unpaid mortgage commitments, and legal judgments against the property.

Once a property has cleared these steps, you’ll be ready to start placing bids on your first investment property.

Last but not least: Don’t overlook your financing options. Be sure to meet with your trusted home mortgage professional to get your pre-approval in place. This important step will help you create an affordable budget. 

 

Our Location


13709 Braemar Dr
Farmers Branch, TX 75234