You need to interview multiple brokers rather than just using the first one you come across. It is the same as choosing any other expert. You will want to be sure to shop around the Profile.market area to make sure you are getting exactly what you need.
Take into consideration it is much more difficult to get the more traditional financing for some of these properties that require fixing.
When working on fixers you may want to consider seeking a hard money lender for financing rather than a traditional mortgage broker.
You can check our local newspaper for the Profile.market area, and you can find financing options and alternative mortgages here as well as through your real estate agent and via investment property finance firms.
Hard money lenders are willing to loan between 50 and 80% of the value of a property after repairs, whereas traditional lenders will only loan based on a property’s current value.
Because they already have local contacts it is very possible that it will be your real estate agent in that knows exactly ho to call in any investment situation.
It costs a lot more to get a hard money loan than it does to finance traditionally. Basically interest rates average about 12-16% in most cases and you might have to pay about 3 to 5 points right now.
The reason people go this route is they can get money Beyond the actual purchase of the property which is generally unheard of in traditional financing. This money can then be used to make repairs to increase the value of the property.
All you have to do is look at the costs of hard money loans like the cost it takes to do business. To end up with the profits that you are looking for on a property, make sure to include those costs in your purchase and holding costs.
Receiving your initial loan in is your toughest. Once you do it once or twice it will become much easier.
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