Loans for Real Estate Investment Property
We specialize in hard money loans and private funding for real estate investors. Loans for investment property can be used for fix and flip projects, BRRRR strategy investors, house hacking and more. See below for what you should anticipate for this type of loan application.
Simply apply online, to get the process started.
What Is The BRRRR Real Estate Investment Strategy?
There is a lot of information online about the BRRRR strategy and how to execute it. We'll keep it simple here, to help you understand the basics. The acronym stands for Buy Rehab Rent Refinance Repeat. This strategy takes the long term, low risk benefits of "buy and hold" investing then couples it with the short term, high yield benefits of "fix and flip" investing.
- Step 1) BUY a property that is in need of some rehabilitation, at a discount from its projected ARV (after repair value). Your target should be to acquire this property for 70% or less of the ARV. You can use your own cash, a HELOC, or borrowed funds from a partner or private lender. This is where we can help, by applying for private funding here. You are looking for a short term cash purchase, as opposed to a traditional mortgage so that you will have 100% equity in the property from the start. We'll talk mortgages in step 4.
- Step 2) REHAB the property so that it is ideal for renters and forces appreciation to your projected ARV. In other words, you are making renovations that will increase the value of the property. Be sure to have a budget in place and a plan so that you don't over spend here.
- Step 3) RENT out your newly renovated property, ensuring you can generate enough revenue to cover the cost of borrowing from the next step, as well as other expenses like property taxes, HOA fees, utilities, etc.
- Step 4) REFINANCE by securing a mortgage against your rented property. If you did your numbers well you should be able to get a loan from a traditional mortgage lender for 80% LTV (the new value/ARV). The bank cuts you a cheque for said value, which you then use to pay off your initial private loan, partner, or yourself if you used your own cash; including the budget that was spent for renovation costs. You are left with a property that has 20% equity in it, a long term loan that is being paid down by your renter, and the cash invested is paid out.
- Step 5) REPEAT this process to further expand your investment portfolio.
What Is House Hacking?
House hacking is a popular low risk method of real estate investing. This method is not ideal for everyone, however new real estate investors may find this strategy ideal for being able to get their feet wet with an investment. The idea of house hacking is to purchase a property you can live in yourself, yet also rent out at the same time with the intention of having your renters cover all or part of your living expenses. There are multiple ways to do this, one example being the purchase of a single family residence. Let's say you have 4 bedrooms in the home. You could keep the main bedroom for yourself, while renting out the other 3 bedrooms to friends or other renters. The revenue generated would either cover your expenses entirely, or significantly reduce them. If you're not a fan of giving up that much privacy, you may consider a duplex or triplex where each unit is private and separate from the others. If you already have a spouse or family, then this may be more ideal. Either way, a house hacking strategy gives you the ability to own a piece of property, while mitigating your cost of living and continuing to build equity in an asset you can leverage down the road.
Is San Antonio A Good Place To Invest In Real Estate?
San Antonio is the 2nd largest city in Texas, and continues to grow. Employment is supported by industries such as manufacturing, cyber-security, technology, energy and bioscience. With lower housing costs, San Antonio residents benefit from a cost of living that is lower than the national average, alongside the unemployment rate also being lower. With a strong and thriving economy and consistent population growth, there is plenty of opportunity to invest in real estate.