Real estate investors who are searching for an effective way to finance real estate deals should pay special attention to this article. Generally speaking there are three different types of things that a investment property mortgage company or rehab loan company will require in order to loan money. All investment deals require that you know the after repaired value, the fixup costs and the purchase price.
First and foremost determining the after repaired value when working with a private money lender for a rehab loan will require you to analyze comparable sales in the area. You will want to first take a look at the active comps and solds in the area to determine the 30 day sales price of the property after it has fixed up. This is a critical component that can't be overlooked when analyzing a real estate investment deal.
And finally you will need to know how much money it's going to cost to fix the property up by working with a qualified general contractor. After doing a few projects you will get really good at determining the fixup costs but for now let's consider working with a qualified general contractor to give us a fair estimate of repairs.
And finally your private money lender or rehab loan company will want to know what the purchase price is. Every successful real estate investor has a specific buying formula that they follow when buying investment properties to ensure a profitable project. Normally any moderately strong market if you follow the formula of the after repaired value minus the fixup costs and you multiply this number which is the as is number times 65 to 70% you will have more than enough profit in the deal.
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