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5 Ways Bridge Loans Help Real Estate Investors Increase Profits

February 21, 2019 by Rhonda Costa

5 Ways Bridge Loans Help Real Estate Investors Increase ProfitsBridge loans, which are also commonly referred to as interim financing, gap financing or swing loans, help a motivated home buyer to secure financing before their home or investment property sells. Lenders can usually modify these flexible loans to accommodate a person’s unique needs.

Current real estate market conditions allow savvy investors to make big profits as long as they can move quickly on good opportunities. Low inventories of existing homes and slower than normal construction developments have combined to drive the median home price across the US to $223,900. This represents a 7.6% national average increase through 2018. Market experts expect prices to rise by another 6.3% over the next 12 months which may present very good opportunities for home buyers. 

Bridge loans are a short-term funding solution with some unique features.

  • They usually include payback terms between 2 months to 1 year.
  • Most bridge loan options gain approval in about 15 days.
  • May receive up to 70% of the property’s value in the loan.

Bridge loans are a tool real estate investors can use to increase their holdings in this hot market. How can these funds be used to help you make more money from your properties?

  • When prime properties come up for sale, investors need to be ready to take advantage. If most of your cash is already tied up in other properties, a bridge loan is a perfect way to get the quick cash you need to win the bid.
  • While a property is up for sale, investors can use bridge loans to continue financing new projects. When the sale is complete, the funds can be used to pay off the bridge loan.
  • Hard money loans are a popular option for real estate investors who can’t wait for the normal bank loan process. However, these funds usually come with higher interest rates. Bridge loans are a lower cost alternative, as lenders generally charge less interest for these accounts.
  • Not sure what you’re going to do with your new property? If you wait too long to make your decision, chances are good that the property will be gone. Use a flexible bridge loan to secure your property. If your plans change, it’s simple to convert the funds into a more conventional loan structure.
  • For flippers who buy properties, perform renovations, and put the properties back up for sale for a profit can use bridge loans to quickly increase their holdings without sacrificing the liquid assets they need for material, labors, and other renovation costs.

In order to qualify for these funds, investors need to prove that they can afford double mortgage payments, present a clear plan on how they intend to pay for the loan (either through resale or refinance), and have a property that can be used as collateral with at least 20% existing equity.

When used as part of an overall investment plan, bridge loans help real estate investors buy more properties, which can mean more money in their pockets. Call your trusted home mortgage professional to discuss bridge loan and other financing options that best suit your personal situation. Most importantly, be sure to utilize the skillset of your trusted real estate professional to find ideal investment properties in your area. 

 

 

Filed Under: Real Estate Tagged With: Bridge Loans, Investments, Real Estate

The 2019 Housing Market, While Still Risky, Isn’t All Bad for Buyers

February 20, 2019 by Rhonda Costa

The 2019 Housing Market, While Still Risky, Isn't All Bad for BuyersMany new buyers start looking for homes in the spring. The question in 2019 is whether buyers can afford available inventory or want to buy given changes to the tax code and increase in natural disasters. 

Interest Rates

The 30-year-fixed interest rates have been trending lower recently. This reduction in interest rates, coupled with a slowdown in the resale housing market, is working in the buyer’s favor in some areas. Talk with your trusted real estate professional and mortgage lender to get the specifics for your area and situation. 

Affordability

Inventories of available homes are on the rise, but still out of reach for many Millennials and other first-time buyers. This has been the case for the past five years. One of the biggest factors some buyers second guess in a home purchase is the commission fees paid to real estate agents. Remember, the real estate commission is paid for by the seller of the home, not the buyer.

With advances in technology, the role of the real estate agent is changing. Many customers think they might be able to their own home online. However, agents still have valuable expertise in individual markets which may lead to a more competitive sales process. They also have helpful experience with the closing process which can significantly lower the anxiety throughout the home buying process.

Tax Code Changes

The 2018 tax code changes have big implications for current and prospective homeowners. The cutoff on home mortgage interest deductions dropped from $1 million to $750,000, and there’s a new $10,000 cap on state and local tax deductions.

It may take a few years for the full impact to play out. However, it could mean an unfavorable combination of higher taxes, higher interest rates and higher prices. One favorable solution to this trifecta is new home construction. An increase in the number of homes could help to bring down housing costs, but zoning laws hinder a fast ramp up in many areas.

Hurricanes And Other Natural Disasters

In 2017, Hurricane Harvey decimated the Houston area and revealed a lack of adequate coverage for many homes. This should serve as a wakeup call since natural disasters seem to be on the rise. 

New buyers are more concerned with what the interests rate will be and whether they can afford the down payment. Many don’t even ask if the property is in a flood zone. That may change if the streak of hurricanes, floods, wildfires and other natural disaster events continues.

Even with all of these considerations, 2019 continues to look like a great time to invest in a new home. Contact your trusted real estate professional to discuss these issues and how they might affect your local area and personal financial situation.

 

Filed Under: Real Estate Tagged With: Housing Trends, Market Conditions, Real Estate

Creative Storage Tips When Downsizing Your Home

September 6, 2018 by Rhonda Costa

Creative Storage Tips When Downsizing Your HomeDownsizing at any stage of life can offer multiple benefits. Less square footage may come with a smaller price tag and usually means less space to clean. However, when downsizing a home, there’s usually the question of what to do with everything. That’s when creative storage ideas become essential. 

Before Downsizing, Take Stock

Before selecting the best storage options, it’s important to first take stock of all personal items, from furniture to clothing, kitchen gadgets, and keepsakes. Sort into items to keep, donate, discard, and place in long-term storage. Long-term storage may mean investing in a self-storage unit to hold things like seasonal decor. Less stuff can mean less storage space needed in a smaller home.

Maximize Closet Space

It doesn’t need to be a walk-in closet to have the capacity to store an array of personal items. Maximize any closet’s storage space with a few tricks. Install a second tier hanging rod and rely on an expandable shoe rack to keep the floor clutter-free. Reduce the number of hangers used by layering outfits on a single hanger — blouse, sweater, and necklace or dress shirt, tie, and jacket. Store seasonal clothing, linens, and pillows in space-saver bags that remove bulk.

Rely On Under-the-Bed Storage

Even in homes with expansive square footage, under the bed often is an under-utilized space. Shoes, books, and other items are shoved out-of-sight, collecting dust and remaining unorganized. When downsizing, every space should have a purpose. Depending on the bed height, consider flat storage boxes ideal for clothing, blankets, and other items. Storage boxes with rollers can make it easy to access and act like an additional set of drawers.

Choose Space-Saving Furniture

The popularity of tiny houses and the number of people downsizing has created a boom of innovative space-saving furniture options. For the living room there are ottomans that open to reveal storage space for pillows, blankets, or video cases. Consider a couch with built-in drawers that slide out. In the bedroom, there are multiple bed choices that have built-in drawers and storage, perfect if the room doesn’t have dresser space. 

Open Shelves Provide Functionality Plus Style

Whether in the kitchen, bedroom, or main living area, open shelves offer great functionality in a smaller space while providing style to the home’s decor. Use them as storage for books, collections, and artwork. They’re ideal when there isn’t space for large bookcases or a coffee table. In the kitchen, open shelves can hold everything from dishes to glassware and potted herbs.

When downsizing a home, trust a local real estate professional to find the right space to fit lifestyle and budget needs.

 

Filed Under: Real Estate Tagged With: Home Improvement, Organization, Real Estate

Creative Storage Tips When Downsizing Your Home

September 6, 2018 by Rhonda Costa

Creative Storage Tips When Downsizing Your HomeDownsizing at any stage of life can offer multiple benefits. Less square footage may come with a smaller price tag and usually means less space to clean. However, when downsizing a home, there’s usually the question of what to do with everything. That’s when creative storage ideas become essential. 

Before Downsizing, Take Stock

Before selecting the best storage options, it’s important to first take stock of all personal items, from furniture to clothing, kitchen gadgets, and keepsakes. Sort into items to keep, donate, discard, and place in long-term storage. Long-term storage may mean investing in a self-storage unit to hold things like seasonal decor. Less stuff can mean less storage space needed in a smaller home.

Maximize Closet Space

It doesn’t need to be a walk-in closet to have the capacity to store an array of personal items. Maximize any closet’s storage space with a few tricks. Install a second tier hanging rod and rely on an expandable shoe rack to keep the floor clutter-free. Reduce the number of hangers used by layering outfits on a single hanger — blouse, sweater, and necklace or dress shirt, tie, and jacket. Store seasonal clothing, linens, and pillows in space-saver bags that remove bulk.

Rely On Under-the-Bed Storage

Even in homes with expansive square footage, under the bed often is an under-utilized space. Shoes, books, and other items are shoved out-of-sight, collecting dust and remaining unorganized. When downsizing, every space should have a purpose. Depending on the bed height, consider flat storage boxes ideal for clothing, blankets, and other items. Storage boxes with rollers can make it easy to access and act like an additional set of drawers.

Choose Space-Saving Furniture

The popularity of tiny houses and the number of people downsizing has created a boom of innovative space-saving furniture options. For the living room there are ottomans that open to reveal storage space for pillows, blankets, or video cases. Consider a couch with built-in drawers that slide out. In the bedroom, there are multiple bed choices that have built-in drawers and storage, perfect if the room doesn’t have dresser space. 

Open Shelves Provide Functionality Plus Style

Whether in the kitchen, bedroom, or main living area, open shelves offer great functionality in a smaller space while providing style to the home’s decor. Use them as storage for books, collections, and artwork. They’re ideal when there isn’t space for large bookcases or a coffee table. In the kitchen, open shelves can hold everything from dishes to glassware and potted herbs.

When downsizing a home, trust a local real estate professional to find the right space to fit lifestyle and budget needs.

 

Filed Under: Real Estate Tagged With: Home Improvement, Organization, Real Estate

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