When rehabbing a house (buy, fix, and sell) is it best to use a real estate agent to help locate properties in desirable areas with a good sales rate?
If you’re just wanting to buy in “desirable areas” then you’re probably not going to find too many rehab projects- that’s why they’re considered desirable. Sure, there are going to be a few, but I don’t know why you would want to hire a realtor as a buyer’s agent to do that.
Because there are so few rehab projects in nicer areas, the listings will pretty much stick out like sore thumbs because their prices should be significantly lower than all the other listings in the area. The flipside is that the listings (if they are in fact listed by a RE company) are probably going to move fairly quickly, obviously you’re not the only investor wanting to buy in nicer areas.
I just figured it was best to rehab in areas that had good sale results during this slow market to minimize my holding time. What happens if I get a hard money loan, fix up the property, and then it won’t sell. Any advice on how to avoid that?
Try to get a buyer in line before hand,a realtor should help with this.Spend a little time with some realtors,you’ll be able to tell which ones will help.All will say they can just to get a sale,but weed through them till you find a good one who understands you want to keep this going with them.There’s alot of bulldogs that will just make a sale,then you’ll be discouraged.And do your own numbers homework,their’s are never right.Good luck.
sellnbama is right, have a buyer lined ( ie an exit strategy) lined up in place before you even start the project. if you buy the property on a HM loan, and have trouble finding a buyer, simply refi into a conventional NOO loan and rent the property out, problem solved! you can still make cash flow each month on the house, even if you can’t flip it right now.
When can you refi into a convetional NOO loan if your using a hard money lender?
And do all banks do that?
Im looking at a property that is a duplex and needs repairs but I’m thinking I could refi it if I cant sell it.
Refi-ing out of HM into a conventional NOO loan shouldn’t be any different than if you owned the property with non-HM and wanted to refi to lower your rate or cash out or whatever. You do need to check with the bank to find out their title seasoning requirements. The local bank that I’m working with right now does not have any seasoning requirements so I’m doing a cash-out refi on a SFH I will have only owned for 3 months, after the owner/investor financed the acqusition and rehab costs for me on a 3 month note.
Do I know if every bank will do this? No, I have no clue what banks outside my area are doing so you should just call around and ask the LO straight out if they can do it or not.
Overall, this seems to be a successful equation (HM–>refi–>conventional NOO) for buying property right now with the increased lending requirements the banks are wanting. You can either have a full time HM lender do it for you or have the current owner of the property finance the deal for you, its the same concept either way.