With a decrease in homes acquired from distressed sales, in gross profits on flip homes, and in housing prices, fix and flip loans help investors stay in the game and generate more income by flipping more homes per year.
According ATTOM Data Soulitions’ home flipping report for 2018, the average home flipped home sold for $65,520 over the original purchased value. This is nearly $5,000 less than the average a year ago. Experts consider that the decrease in this amount is due to the reoccurring difficulties of finding distressed property. Distressed property traditionally has been a niche for flippers wishing to purchase property well under market value. The incentive for purchasing this property type is that it can be renovated and sold for a better profit than renovating a non-distressed home: in the most recent quarter, an average of $65,000.
With less distressed homes on the decline and a shortage of available homes, flippers are having to turn to other means to acquire property. The low-hanging fruit seems to have been taken. It is time to climb higher. Perhaps a home is available and a decent buy at a distressed stressed sale. But other methods may be necessary, such as advertising the purchase of homes for cash, sending out email campaigns, beating around the bushes of local neighborhoods and acquaintances to find extra business, or developing relationships with local wholesalers. Building a pool of resources outside of the conventional distressed sale to find property worth flipping has become a growing necessity.
Though the decline in returns for flip homes and the availability of distressed property is currently a market trend, there is still money to be made, and the right homes are out there to buy. With an average net of $30,000 per flip, flipping two or more houses per year can easily provide a supplementary or primary income after establishing a pool for finding new flip homes.
Fix and Flip Loans Can Increase Total Annual Returns
There are other ways of further monetizing by using fix and flip loans in Arizona to acquire more real estate rather than acquiring with personal cash. Where alone an individual investor can may be able to purchase a property to flip one or a number of houses, a private or hard money lender is able to greatly increase this amount. While the cost of financing using hard money is high, fix and flip loans allow flippers to flip more houses per year thus increasing the total potential earning than flipping, without the limits of personal cash flow.
Contact your hard money broker at Level 4 Funding to find fix and flip loans right for you.
Building a pool of potential properties using means other than distressed sales, finding properties off the beating path, and using financing to purchase more flip houses per year are becoming the growing trends in the market. If the latter is of interest to you, contact your hard money broker at Level 4 Funding to find fix and flip loans in Arizona that are right for your flipping business.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.