1. Do I need to use my own money to finance or can I use “hard money”?
An “investment” by definition is utilizing our own funds to gain more. But in this new, investment landscape, it’s become a prevalent practice to leverage yourself with cash that is not your own, by borrowing hard money. The disadvantage is that you are still essentially using “outside” funds to purchase. While not as cumbersome as conventional financing, it is still not the same as your own “Cash”.
FLIP FOR PROFIT
2. What is the profit I can expect to see if I flip a property?
“Flipping” properties is a great way to make money. Popular media has encouraged this belief. But what they don’t show you is the risk involved! The entire process is a gamble on market values, contractor pricing, and timing. All our REALTORS® of the Coastal Homes Group are experienced at “flipping” houses. We have actually all done it ourselves, as well as holding onto investment properties. We know what to look for and what to avoid. We can help you with the process to ensure you get the maximum profit for any given property.
HOLD OR FLIP
3. What is the advantage of holding a property and renting versus flipping?
We’ve all heard the saying, “Land rich, cash poor.” This doesn’t really have to be the fact. If you make a wise investment in a neighborhood that’s desirable to renters and buyers alike, it’s possible to see immediate income from renters as well as a future profit from a sale.
THINGS TO CONSIDER
4. If I buy a property to rent out, what should I know up front?
If the property is part of a planned community, you should be aware of the CC&Rs. Do they restrict rentals? And just like any other purchase, you want to look at the comparable properties in the area—i.e. comparable rentals. What do they offer in amenities? What is the average monthly rent? Are utilities included? What about a gardener?Is there rental control or other factors that may affect expected income?
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