When You’re Flipping a Property, Avoid Making These 4 Common Mistakes

real estate secured lending

The reasons to invest in commercial real estate and residential properties are plentiful, but one of the main reasons is ROI. In other words, both residential and commercial real estate investing can be highly profitable. Although around 32% of people looking to buy a house are first-time home buyers, nearly 6.6% of all single family homes and condos purchased in the first quarter of 2016 were flipped properties — so it’s safe to say that flipping is becoming more and more popular.

But if you’re looking to get in on residential or commercial property investing, there are certain mistakes you’ll want to avoid making. Although these are all quite common, they can lead to unprofitable flips and difficult lessons learned. Your best bet is to learn from these mistakes others have made before you ever have to make them yourself. Here are our top four property flipping mistakes to avoid:

  1. You invest more than you should

    One of the most important residential and commercial real estate investing basics is that you need to go in with a budget and stick to it. Many flippers are too tempted by the potential of their property. You should never sink too much of your own finances into a flip. This can spell disaster, especially when you may have unexpected projects and upgrades to account for. You should look into your real estate secured lending options. Hard money loans for real estate investors can help you to purchase a property quickly in a way that offers better protection for your financial decision.

  2. You don’t give yourself enough time
    Flipping any type of property is extraordinarily time-consuming and labor-intensive. Do not underestimate the time you’ll need to execute a flip. Even negotiating the deal and securing hard money rehab loans take time. Then, you’ll need to actually fit up the property, schedule inspections, and make sure everything is up to code. After all that is done, you’ll need time to put the property on the market and sell it. These meetings and negotiations also take up a lot of time. If you’re not willing to put in the effort, real estate investing and flipping might not be the right venture for you.
  3. You don’t have the skills or knowledge
    There’s something to be said for not being afraid to get your feet wet — but you also can’t go into a new venture totally blind. If you don’t personally have the skills and knowledge to be successful, you need to hire a team of professionals who do. It’s better to hire professionals to do all the work anyway; tempting as it may be, unless you’re highly skilled, this is not the time for a DIY project. But even knowing how to pick the right property, assessing the importance of upgrades, and being familiar with the overall market takes a lot of study. If your general know-how is lacking, make sure you enlist help from people you trust prior to making any big purchases.
  4. You don’t have a back-up plan
    Of course, we all want to believe that our investments will be successful and that we’ll make a big profit. The reality is that this doesn’t always happen. Even if we are totally prepared, find a great buy, and do all of the necessary fixes, you may still have a tougher time selling a property than you might have anticipated. It’s important to hope for the best but plan for the worst. By that, we mean that it’s important to have a back-up plan for your property. Are you able to rent out the property while trying to find a buyer? Could you work with another investor? Even if you’ve used real estate secured lending, your investment isn’t totally protected. If your property doesn’t flip as fast as you wanted, you need to have a viable exit strategy. Preparation is key.

If you’re interested in finding out more about how real estate secured lending can help you purchase and flip properties, contact us today. We’ll answer any questions you may have about real estate secured lending and how these hard money loans can allow you to start pursuing property investment.

02 Feb 2017

What to Know as a First Time House Flipper

renovation financing

Flipping a home, which is the process of purchasing a house, renovating it, then reselling it (ideally for a sizeable profit), is a great hobby for those who are willing to dedicate themselves to the trade. Anyone who gets into this business expecting a simple process is in for a nasty surprise.

While experienced real estate pros may be able to turnaround their houses with the snap of a finger, there’s a lot for first timers to learn. You have to learn all the nuances that separate investing in smaller properties or commercial property investing, what to do with renovation financing and renovation lending, learn all about secured short term loans, and determine where in your community to look.

While you can’t learn everything you need to know about house flipping and renovation financing from a single blog post, you have to start somewhere. Here are some tips from first-time house flippers to help your decision making process go smoothly.

1. Always educate yourself

The more you know about the real estate world, the better. Make it a goal to read something new everyday. Always find more relevant information on the topic at hand, then study, study, study, and study some more.

2. Find a mentor

Flipping houses can be hard work, and many people start off by learning a lot of valuable lessons… the hard way.

If possible, find a mentor who has been through the process a couple times already. Learn from them, and especially take note of their mistakes. Ask if you can help them with their next project as a way to gain firsthand experience. Then, have them help you develop a plan of action surrounding what they have done successfully in the past. Remember, collaboration is key.

3. Understand the ins and outs of purchase contracts

A full 59% of homeowners say they wish they had understood the terms and details of their mortgage better, and that goes for home flippers as well! You are spending a good chunk of change on your home, considering that as of March 2016 the average home sale price in the United States was $186,000.

Also make sure you understand exactly what your home equity is worth throughout every step of the process. Home equity varies per household, and the median amount of home equity for those 35-years-old or younger is around $20,000. If you are at all confused, make sure to talk to a renovation financing expert.

4. Develop a formula, then stick with it

It is important for any home flipper to develop a standard formula to adhere to that calculates how much you are willing to pay for a piece of property and how much return on investment you expect to get from the sale. These can be done manually or digitally.

5. Get out there and do it

Your business will not be perfect after your first try, but you do have to try for the first time. Don’t be afraid to throw yourself into this project.

These tips are beneficial for those looking into both commercial real estate investing and smaller residential properties. Ready to get started? Call the experts at Secured Investment Lending today.

31 Jan 2017

A Simple Explanation of Business Evaluation

Business valuation resources

The maneuvering behind business valuation often confuses those who do not understand the process. Company valuation depends on variables most people are not given cause to consider on a daily basis, but it remains at its core like many free market transactions. This commonality is due to the primacy of the principles of supply and demand. All complex variables aside, the value of a business is the highest amount someone is willing to give to own it. Given that, why then does the matter flummox so many? That question will be examined here in this attempt to provide a simple explanation of business valuation.

The Many Methods of Determining Value

Ask five people how to value a company and you c (more…)

26 Jan 2017

Are You Considering Selling Your Small Business?

Company valuation services

It has always been a little difficult to explain your job, so it should probably come as no surprise that you have also had a difficult time following the basic steps of programs that are supposed to help you with “calculating the worth of my business.”(more…)

25 Jan 2017

Renovating Can You Make A Business Out Of It?

Hard money rehab loans

Renovation is a different landscape than it was in prior decades. In today’s world, many homes are being foreclosed open, or sold cheaply for other reasons. With that in mind, buyers are snapping up these houses with the idea of renovating in mind. For some, renovating is done with a dream home in mind. Rather than spending a lot of money outright on the home they want, buyers spend a little bit on a home that’s in “bad shape” and slowly turn it into the house they want, saving a lot of money in the process. For others, renovation is done with the idea of selling the house for a profit down the road. In fact. some take this second idea so far that they turn it into a business. However, if you want to get started in the commercial real estate business, “flipping” houses for a living, you need to h (more…)

12 Jan 2017

Before Investing in Commercial Real Estate, Ask These 3 Questions

Why invest in reits

Should I invest in real estate?

You may have asked yourself this question before. Although residential and commercial real estate can be excellent investments, getting into the game can be overwhelming at first. Having experienced real estate partners can help you to learn tips and tricks of the trade more quickly, but before you invest in any type of real estate, there are some important questions you always need to ask. If you’re weighing your options and are wondering, “should I invest in property A?” or “should I invest in real estate option B?,” you’ll need to answer these thr (more…)

11 Jan 2017

New Trump Administration Prompts Changes Within the SEC

ria money transferThe U.S. Securities and Exchange Commission (SEC) consists of five President-appointed commissioners who serve five-year terms. The President designates one commissioner or chairman and no more than three of the commissions can belong to the same political party.

Now, both Mary Jo White, the Chairwoman of the SEC and Andrew Ceresney, the SEC Enforcement Director, have announced their resignation once the Trump administration takes over.

“It has been a tremendous honor to work alongside the incredibly talented and dedicated SEC staff members who do so much every day to protect investors and our markets,” said White. “I am very proud of our three consecutive years of record enforcement actions, dozens of fundamental reforms through our rule-makings that have strengthened investor protections and market stability and that the job satisfaction of our phenomenal staff has climbed in each of the last three years.”

According to Legal NewsLine, White was the 31st SEC Chair and has served one of the longest terms in history of the commission. Both White and Ceresney focused on improving the overall market for RIA compliance consultants, investors, and everyone else involved in the industry.

Ceresney, who came into the agency alongside White, has overseen the commission and brought a record number of cases by targeting both small infractions and large scams involving fraudulent RIA money transfers.

“We really have brought important cases across the whole securities realm, in every priority area,” said Ceresney. “Enforcement will always be a high priority, it’s a bipartisan issue. “Any enforcement director should be encouraging their people to be creative and aggressive but also fair.”

Not only that, but The Wall Street Journal reports that under Ceresney’s supervision the enforcement division filed 143 cases targeting inaccurate municipal bond disclosures and various cases involving short selling and other public offering violations.

Because of the incoming administration, and many uncertainties concerning the future of the SEC, RIA consultants who deal with RIA money transfers will be even more focused on the new regulations. In the meantime, like much of the world, many financial advisors and RIA companies will be taking a “wait and see” approach to 2017.

To learn more about RIA money transfer online programs or to speak with professional RIA consultants, contact Focus 1 Associates.

28 Dec 2016

Small Business ValuationA Necessary Commodity

Business valuations

Small business valuation is generally done for reasons of determining the economic value of the interest an owner has in a business. It is a process of procedures carried out to find the worth of a business, commonly known as the premise of value and the standard of value. These are the two key elements upon which a valuation is usually based. A small business valuation is generally done when an owner wants to establish a partnership and bring in another partial owner, or in cases of divorce, or when the owner is considering selling the business.

When the owner of a small business wants to consider how to value a company, they will generally seek out a professional in the field. There are many companies experienced in business valuation that provide trained staff to research and calcula (more…)

28 Dec 2016

Are You Ready For Your First Real Estate Investment Deal?

Real estate secured lending

Are you interested in investing in real estate? Do you want to become your own property owner and landlord? The real estate industry is a growing business that provides many with a prosperous self employment opportunity. However, just as with any other type of business, there is risk in your investment. There are steps that any real estate investor should follow when completing a deal. The following steps will ensure that you are making a good financial decision and that you are prepared for the work. Go through these questions anytime you are considering purchasing a real estate property for investment purposes.

Are you financially ready?

If you struggle to make your rent or mortgage payments on a regular basis, purchasing another property may not be a good idea. If your source of (more…)

08 Dec 2016

4 Types of Commercial Property Investments That Can Help You Make Serious Money

Commercial real estate

See a piece of commercial real estate for sale and wonder what you can do with it? Real estate investing is a lucrative business that doesn’t always require hands-on activity.

Buying commercial real estate means that you own the building, meaning that you don’t have to have the slightest clue about the industry that wants to inhabit your space. Although, it wouldn’t hurt to.

There are a number of industries that are always searching for new spaces. The following business types are great investments when it comes to property buying.


Restaurants are everywhere, and they usually sink or float. For this type of business, you really need to be savvy in the restaurant sce (more…)

08 Nov 2016