Financing for your real estate investments: HARD MONEY LENDERS

Throughout the years I’ve spent as a real estate agent, I’ve seen several methods people use to invest in real estate. Some investors choose to buy property to renovate then flip, or sell at a higher value. Others choose to buy, hold onto, and rent and enjoy the monthly income. Some investors use their cash to purchase these properties, but most will use financing (or someone else’s money). I will stop short of telling you about what “ABC Bank” or “ABC Mortgage” have to offer because there so many out there. One innovative way that I’m seeing more investors use to finance their properties is HARD MONEY.

After Repair Value (ARV)

Hard money lenders are third parties, private lenders who, for the most part, don’t base your ability to finance solely on your credit, assets, or even your ability to make your payments. They are more concerned about the After Repair Value (ARV). After Repair Value pertains to a property’s current value in its current condition vs. its potential value once it’s renovated

Simple scenario:

Hypothetically, lets say you choose to buy and invest in a property. Said property is currently worth $100,000 in it’s current condition. Most comparable homes in the same neighborhood are selling for $200,000 (move-in ready). The subject property needs about $40,000 in repairs. Most hard money lenders will finance up to 70% of a property’s after repair value. This property’s potential value is $200,000 if homes in the neighborhood are selling around $200,000. The lender may finance up to $140,000 (70% of $200,000). That gives you $140,000 in cash to purchase the home. Out of the $140,000 cash that the hard money lender finances you, you buy the property at $100,000 and spend $40,000 to renovate. Let’s say you put the property for sale at $200,000 with a realtor to maximize the home’s potential to profit, and it sells for $200,000. After the closing of the sale, you pay back the $140,000 loan to the hard money lender. Sold at $200,000 – $140,000 loan = $60,000 in your pocket. (This doesn’t take into account origination fees)

This is the hard money loan in its simplest form. Additional charges with hard money loans include a higher interest rate. I’ve seen hard money lenders charge 10%-18% interest on their loans, at 3-6 points (3%-6% down payment). Yes it’s high, but remember, the investor isn’t trying to live in this property for 30 years. The purpose is to finance an investment, renovate it, and sell as quickly as possible. If a borrower cannot do this in a reasonable amount of time, the costs add up. Time = Money Lost. Typically, hard money lenders will require a borrower to have the ability to convert the loan to conventional financing from a bank/mortgage lender within a year if they aren’t able to sell. Word to the wise: Rehab and sell as quickly as possible. I also didn’t take into account any Realtor fees that may apply when you list your property.

One wonderful thing to consider with Hard Money Loans is the ease of obtaining them. Usually they’ll take 7-14 days to finance without the red tape and appraisals that regular mortgages require. Whenever you purchase a property using hard money, it is essentially a cash transaction for all intents to the seller.

This example is just one variation of hard money lending. The process and numbers vary from lender to lender, and situation to situation. This is just one common way that I’ve seen here in Austin.

Some of the most common properties investors tend to purchase for flip and/or rent are foreclosures. Visit my foreclosure blog for more information on these great properties with high equity potential.

Contact me if you’re looking for a hard money lender to use in the Austin and surrounding areas.

You’re invited to leave comments below. Feel free to ask questions, or chime in on how you were able to use hard money to flip your property.

You’re welcome to visit my website to find properties to flip

*I am a real estate agent and I do not claim to be a mortgage officer. Just the messenger of good news*
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Homes for Sale Buda TX 78610

The following are full details and all photos of all available homes in and around Buda, TX. For sale property information is a direct feed from Austin Board of Realtors MLS and is updated several times daily. You’re invited to leave comments and questions.

Buda_Cabellas_Water TowerU.S. Census Bureau has reported that San Marcos, TX is now the fastest growing city in the United States. Just 15 miles north of San Marcos is Buda TX (neighboring Kyle to the north), which is experiencing similar growth from both San Marcos and South Austin. Buda is considered a part of the Austin Metropolitan area, as it is just 10-15 miles south of downtown Austin and is the last town before reaching Austin from the south.

Buda sits on IH35 where commuters can easily travel to-and-from the two major metroplexes. Many residents choose to live in Buda because they can enjoy a quiet, small town lifestyle, while still having easy access to Texas State University – San Marcos, Central Texas Medical Center, and the City of Austin. San Marcos, Kyle, and Austin are easy along IH35.   Visit my site for a list of all available properties in the area.

Buda Location Map

Most homes in Buda can be found in large subdivision developments, featuring efficient, newer build homes on the outskirts on both sides of IH35

Is it time to sell your house in Buda?  Request a FREE custom evaluation for your Property in Buda TX 78610.

 

Housing Market Buda TX 78610

In 2013 541 Homes sold in Kyle. That’s a sharp increase from 401 Homes sold in 2012.

2013 Housing Prices in Buda TX 78610

List Price LP/SqFt Sold Price SP/SqFt
Min $62,100 $33 $54,422 $29
Max $849,900 $208 $800,000 $207
Avg $218,905 $101 $214,446 $99

2012 Housing Prices in BudaTX 78610

List Price LP/SqFt Sold Price SP/SqFt
Min $49,000 $37 $49,000 $35
Max $600,000 $176 $577,500 $172
Avg $198,119 $92 $192,212 $89

2013 Market Insider Buda TX 78610:

Market Insider

Market Trends in the Area

According to Market Insider, median list prices in Kyle TX are around $238,790 depending on size and condition. Homes are selling on average within 64 days and only 3.6% of the properties are considered vacant (11% below the national average). About 79% of the homes are owned and about 18% are rented.

Community Info

Schools serving Kyle TX are all part of Hays CISD

The quality of a school can greatly influence home values in an area. Access detailed information on BudaTX  school ratings, test scores by grade, student-teacher ratio, and much more.

Gain valuable insight into the Buda TX 78610 community by looking at household incomes, crime risk, education levels attained, and potential for extreme weather. Use the map to locate points of interest like shopping, restaurants, and health care services.

The official Website for the City of Buda TX can be found here. This website contains information regarding job postings, utilities, and other city services.

 

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Homes for Sale Kyle TX 78640

Kyle Water Tower DowntownThe following are full details and all photos of all available homes in and around Kyle, TX. For sale property information is a direct feed from Austin Board of Realtors MLS and is updated several times daily. You’re invited to leave comments and questions.

U.S. Census Bureau has reported that San Marcos, TX is now the fastest growing city in the United States. Just 10 miles north of San Marcos is Kyle TX, which is experiencing similar growth. In 2000, the population was just under 6,000 – in 2012 it was around 30,000 making it one of the fastest growing cities with it’s neighbor San Marcos.

Kyle MapKyle is about 15-20 miles south of Austin, and 50 miles north of San Antonio. It sits on IH35 where commuters can easily travel to-and-from the two major metroplexes. Many residents choose to live in Kyle because they can enjoy a quiet, small town lifestyle, while still having easy access to Texas State University, Central Texas Medical Center, and the City of Austin. Commutes to San Antonio, New Braunfels, San Marcos, Buda, and Austin are easy along IH35.  Visit my site for a list of all available properties in the area. Most homes in Kyle can be found in large subdivision developments, featuring efficient, newer build homes.

Is it time to sell your house in San Marcos?  Request a FREE custom evaluation for your Property in Kyle TX 78640.

Housing Market Kyle TX 78640

In 2013 736 Homes sold in Kyle. That’s a sharp increase from 586 Homes sold in 2012.

2013 Housing Prices in Kyle TX 78640

List Price LP/SqFt Sold Price SP/SqFt
Min $35,000 $20 $36,000 $23
Max $1,373,000 $264 $1,325,000 $255
Avg $159,484 $85 $156,920 $84

2012 Housing Prices in Kyle TX 78640

List Price LP/SqFt Sold Price SP/SqFt
Min $45,000 $26 $40,000 $23
Max $595,000 $251 $525,000 $221
Avg $144,832 $79 $141,614 $78

2013 Market Insider Kyle TX 78640:

Market Insider

Market Trends in the Area

According to Market Insider, median list prices in Kyle TX are around $169,130 depending on size and condition. Homes are selling on average within 96 days and only 3.8% of the properties are considered vacant (9% below the national average). About 75% of the homes are owned and about 21% are rented.

Community Info

Schools serving Kyle TX are all part of Hays CISD

The quality of a school can greatly influence home values in an area. Access detailed information on Kyle TX  school ratings, test scores by grade, student-teacher ratio, and much more.

Gain valuable insight into the Kyle TX 78640 community by looking at household incomes, crime risk, education levels attained, and potential for extreme weather. Use the map to locate points of interest like shopping, restaurants, and health care services.

The official Website for the City of Kyle TX can be found here. This website contains information regarding job postings, utilities, and other city services.

 

-Thank you for reading this latest blog on Homes for Sale Kyle TX 78640-

 

I invite you to leave comments below and share. I respond promptly.

see more at: http://JTresidential.wordpress.com

You’re welcome to sign up for free information at my website: www.JTresidential.com

Homes for Sale San Marcos TX: The Fastest Growing City in the USA

The following are full details and all photos of all available homes in and around San Marcos, TX. For sale property information is a direct feed from Austin Board of Realtors MLS and is updated several times daily. You’re invited to leave comments and questions.

Old_Main

Yes, it’s true. The U.S. Census Bureau has reported that San Marcos, TX is now the fastest growing city in the United States. I’m very fond of San Marcos and I miss it dearly. I once lived in San Marcos, which is home to my alma mater Texas State University. I was there in 2005 and graduated in 2008 when the population was just under 30,000 and even less when students vacated during the holidays and summer. Just 5 years later that number has ballooned to over 50,000!

Google Map of San Marcos

Just 25 miles south of Austin, and 45 miles north of San Antonio, this beautiful “Gateway to the Hill Country” sits on IH35 where commuters can easily travel to-and-from the two major metroplexes. Famous people like George Strait and former president Lyndon B. Johnson once called San Marcos their home as students at Texas State.  Visit my site for a list of all available properties in the area. With it’s own river, university, hill country to west, flat lands to the east, bars (at the square downtown), and specialty shops, San Marcos is full of life all packed into a town whose city limits barely stretch 8 miles north to south. Beautiful, historic homes are easy to find in San Marcos, especially closer to downtown and the Texas State University campus. More and more homes are being built on the ever-expanding outskirts of the city.

Is it time to sell your house in San Marcos?  Request a FREE custom evaluation for your Property in San Marcos, TX.

Housing Market San Marcos TX 78666

In 2013 181 Homes sold in San Marcos. That’s up from 147 Homes in 2012.

2013 Housing Prices in San Marcos TX 78666:

List Price LP/SqFt Sold Price SP/SqFt
Min $58,590 $36 $60,000 $39
Max $998,500 $230 $1,000,000 $240
Avg $213,813 $106 $205,968 $102

2012 Housing Prices in San Marcos TX 78666:

List Price LP/SqFt Sold Price SP/SqFt
Min $14,900 $14 $14,900 $14
Max $695,000 $202 $68,000 $179
Avg $198,892 $99 $190,550 $96

2013 Market Insider San Marcos TX 78666:

Market Insider

Market Trends in the Area

According to Market Insider, median list prices in San Marcos TX are around $192,570 depending on size and condition. Homes are selling on average within 196 days and only 5% of the properties are considered vacant (9% below the national average). About 59% of the homes are owned and about 36% are rented.

Community Info

Schools serving San Marcos TX are all part of San Marcos CISD and/or Hays CISD

The quality of a school can greatly influence home values in an area. Access detailed information on San Marcos school ratings, test scores by grade, student-teacher ratio, and much more.

Gain valuable insight into the San Marcos TX 78666 community by looking at household incomes, crime risk, education levels attained, and potential for extreme weather. Use the map to locate points of interest like shopping, restaurants, and health care services.

The official Website for the City of San Marcos can be found here. This website contains information regarding job postings, utilities, and other city services.

-Thank you for reading this latest blog on Homes for Sale in San Marcos TX 78666-

I invite you to leave comments below and share. I respond promptly.

see more at: http://JTresidential.wordpress.com

You’re welcome to sign up for free information at my website: www.JTresidential.com