There are hundreds of people who want to get into real estate investments, but worry about certain qualifying factors, such as a credit score. Since most hard money lenders, like Do Hard Money, lend based on the quality of the property and not necessarily the lender, we help people overcome this investment obstacle and open the door to financial freedom. What many real estate rookies may fail to realize is that there are many other obstacles and challenges when it comes to investment deals. It’s important to be educated, not only on the ins and outs of rehabbing, but on what makes a deal the ultimate deal; one worthy of qualifying for 100% Financing.
Fortunately, coming here and reading this blog is conquering half the battle. Beyond traditional funding, Do Hard Money helps individuals become as knowledgeable as possible in all aspects of REI deals. We want to make sure you find a fantastic deal so that you can receive the highest possible return on your investment. Thus, in a vein similar to Jeff Foxworthy’s famous “…You might be a redneck” series, we’re here to help you know what factors to consider when determining whether or not a property is lucrative.
Here are some KEY QUESTIONS to consider when determining the value of a deal AND which items can spoil a deal faster than mayo left in the sunshine, basically how to know if “…you might have a resale problem.”
1. Is the property manufactured, mobile, rural, agricultural, recreational, or owner-occupied?
Basically, if you have a mobile timeshare with its own manufactured beet farm and a family of 5 currently living there…you might have a resale problem.
2. Does the property have significant mold issues, fire damage, a history of methamphetamine use/manufacture, foundational problems or roof issues?
Basically, if you have a moldy meth lab with half a roof, which you bought after the great Chicago fire, built on a major fault line…you might have a resale problem.
3. Is the property less than 900 square feet or are you adding to the building or adding new exterior walls?
Basically, if you have a shoe box you’re currently converting into the Taj Mahal…you might have a resale problem.
Other things to take into consideration are the items which may not necessarily KILL a deal, but add to the overall risk factor. Remember: a property’s risk score affects points, interest and the loan amount you can qualify for. Be sure to do your homework and err on the side of caution when it comes to qualifying a good deal. Ask yourself these questions:
4. Is the property in a high-crime area, within 100 miles of the coast or has it been vandalized?
Basically, if you have a graffiti-ridden shack on the beach which used to be the home of Al Capone…you might have a resale problem.
5. Is the property near a commercial building/area or on a major street?
Basically, if you have a home next door to the local mega-mall on route 66…you might have a resale problem.
6. Is the property in a high rental neighborhood, a neighborhood where the average selling days on the market are 120 days or longer, or there’s more than one boarded up house in the neighborhood?
Basically, if you have a property in a condemned ghost town…you might have a resale problem.
Though good deals can be hard to find, if you follow these guidelines you will be far more successful pinpointing the more profitable deals. Plus, these tips are guaranteed to keep you from getting stuck with a lemon that will sit on the housing market, collecting dust.