Houston Real Estate Investors are doing more loans to fix homes damaged in Hurricane Harvey. Flipping houses has now become a cultural trend, and Fix-and-Flip Loans Demand are on the rise, creating new opportunities for Hard Money Lenders.
The huge destruction the storm did left thousands of homes damaged. Savoy Investors are snapping the Houston Investment Properties up. Then renovate and flip them for resale.
No one claims that Houston fix-and-flip loans are easy. While the conflict and solution generally come in an hour’s time on television, the reality is that flipping houses is serious work and requires a lot of capital to take advantage of market opportunities.
Costs include the down payment on the property, the renovation costs, insurance, permits and fees, and more. Once the renovation and sale are completed, the seller is responsible for recording fees, title search fees, escrow fees, and other costs.
According to new research from ATTOM Data Solutions’ 2017 Home Flipping Report, house flipping in the U.S. increased to an 11-year high in 2017, creating an excellent opportunity for brokers who offer fix-and-flip mortgages. In fact, for the second year in a row, more than 200,000 homes were flipped.
And the trend has gone national. Pennsylvania was the state with the highest gross ROI (108.3%) with a tidy $78,000 gross profit on each. Ohio, Louisiana, Maryland, and Illinois rounded out the top five states.
Investors seeking capital to purchase, restore and sell investment properties often turn to non-bank sources for fix-and-flip loans because they lack a consistent source of income to qualify for a traditional bank loan.
Brokers sometimes turn down these opportunities because they don’t understand the options available for servicing borrowers who are hard to qualify.
Traditional, owner-occupied residential property mortgages are focused on the buyer’s personal income and credit to meet the strict guidelines established by government service agencies like Fannie May and Freddie Mac. A Hard Money Loan Houston will provide the Investor more flexibility.
However, mortgages for investment properties are often asset-based, meaning their focus is on the value of the property and its revenue-generating potential.
Because of this, the use of asset-based lending solutions allows brokers to qualify self-employed flippers who may not qualify for a traditional mortgage.
Asset-based lenders are also willing to fund fix-and-flip projects that traditional banks won’t touch, including the cost of renovations, through short-term loans based on the property’s “as repaired value” or ARV. Such financing is the key to winning the business of fix-and-flip investors.
Mortgage brokers who both understand and know how to use asset-based mortgage solutions can take advantage of cultural trends that are currently driving the real estate investment market.
Unlimited Mortgage Solutions has many Fix & Flip Loan options.