There are some fairly simple things you can do to expedite the approval process and get your private money loan from Buy Now LLC. Many of the tips below can also help ensure that the real estate investment you make will be profitable for you.
Take Lots of Photos: Videos Are Even Better!
Take a digital camera, or your mobile phone, or video camera with you whenever you visit a property you are considering buying. Take pictures of everything! All exterior sides of the building, all kitchens, baths, and all mechanicals, including heating, hot water and electrical panels.
Take pictures of each room and don’t forget the exterior shots of the properties immediately around the property you want to buy. If there is a view, don’t forget that either.
There are lots of reasons to take these photos:
- They will help with your rehab estimate when you are home and can’t remember one property from another, because they all blend together.
- If you sell the property, you’ll have documentation of the “before” when the buyer’s lender questions why the value went up $100,000 in only 3 months.
- If you have an insurance claim during the course of ownership, these may be helpful.
- You won’t have to go back to the property later to take the photos that you should have taken in the first place.
- If you haven’t taken photos or video, don’t let that stop you from moving forward!
Provide a Complete Loan Package
When we are missing critical information, it slows the process. If you don’t have all the information, contact us to discuss it, so we can jointly determine the best way to get it.
- Application (fill out all pages)
- P&S or Signed Offer (If they are not signed yet, send the unsigned version with what you have verbally agreed to.)
Have a Stake In the Outcome
It’s called ‘skin in the game’. You must have either cash in the deal, or provide additional collateral (another property you own) to demonstrate that you have something to lose besides the profit in this deal.
If you need to borrow more than is normally warranted by the LTV, or don’t have enough cash, consider cross-collateralizing another investment property.
Be Conservative When Estimating Values
In a declining market, your profits can evaporate quickly. An improving market can turn. Be conservative when estimating both the current ‘as-is’ value of the property, and the After Repaired Value or Completion Value.
Have Multiple Exit Strategies
If the market changes, and you can’t sell your property as planned, have a back-up plan. This will ensure you can make money regardless of the market.
Consider All Expenses When Evaluating a Deal
A well-structured deal takes acquisition, carrying, financing and selling costs all into consideration, since they add up quickly and can dramatically impact your profit. And don’t forget opportunity cost: what you would be making with the money if you put it in your 401k, or stock market account, mutual fund, or your mattress. Scratch the mattress – you can’t make anything in a mattress.
Expect the Unexpected
You actually can plan for the unexpected. Assign a dollar amount as a miscellaneous or contingency expense in your rehab budget. If it’s your first deal, plan for an extra 20% of your rehab budget.
To wrap things up, the best tip we can give you is to read Ann Bellamy’s Blog Posts on various topics to do with real estate investing and hard money loans. She is among the most respected experts in the field, as well as an entertaining read. Enjoy!