What is the 70% Rule?

The 70% rule is a common term used by many Real Estate Investors when fixing and flipping houses. The rule is basically a standard equation to go by when figuring out how much you should pay for a property depending on its overall worth and investment costs. In general, this can be a helpful guide, but it is not a flawless solution that can be used without considering all factors of the property.

The rule states that the buyer/investor should be paying 70% of the ARV worth (after repaired value) minus the cost of any repairs needed. Therefore, if the home’s ARV is $130,000, 70% of that would be $91,000 – but the property needs a total of $15,000 in repairs. You would then subtract $15,000 from $91,000, meaning the 70% suggests that you should pay $76,000.

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Top Five Mistakes to Avoid When Flipping a House

Flipping a house requires lots of work such as designing and overseeing renovations, budgeting, and hiring out contractors. You need to make sure that you know the housing mmarket, your own money and time budget, and what your profit margins are before going into any new project. Flipping a house is labor intensive and if done correctly, the reward is truly worth the effort. Below we have listed the top mistakes that any new home buyers, or investment property owners will want to avoid when looking to flip a house.

Do not spend too much money on the house

Of course, it is easy to get swept away in the project and to blow your budget by thousands if you’re not careful. Whether that is upgrading the heating system, or splurging on high-end finishes, you don’t want to break the bank on the house. Although this may seem counterintuitive, it is important if you want to get any financial gain out of the house. Whether you are planning on living in the house or selling it, ensuring that you spend less than 70% of your projected after-repair value for the home will pay off in the long run.
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Using Bridge Loans to Fund Short Term Rentals or Airbnb

Can bridge loans help to fund something like a short-term rental, including Airbnb properties? The short answer is yes, but there is a little more to it to keep in mind.

How Can I Fund My Short-Term Rental or Airbnb?

When it comes to funding your short-term rental or Airbnb efforts, it may seem as though more doors are being shut in your face, as opposed to opportunities to get the loan you need. It is true that some lenders are a little skittish, even as Airbnb has become one of the biggest sources of income to come along in quite some time.

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Why Do Hard Money Lenders Require A Down Payment?

Do you really need to worry about hard money lenders requiring a down payment? Often, this is going to be a requirement you will have to contend with. It is better to understand why this is the case, than to be surprised later with something you were not expecting.

Hard money lenders are particularly appealing to real estate investors. That is unquestionably a field of interest in which you do not want any unforeseen financial surprises. Understand what you are going to be getting with hard money lenders right out of the gate.

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Fix and Flip Loans: Private Lending for Real Estate Investors

Flipping houses is a sought-after investment preference for many people looking into investing. There is good money to be made there if you know what you are doing. How does one get started if you do not have your own money yet?

A conventional mortgage was designed to be in place for the long-term to help buyers purchase a long-term residence. As such, they are not as useful for a short-term investment like house-flipping. As investing in real estate through the fix and flip method became more and more popular, a new loan mtype was created to be the bridge between the property’s purchase and renovation costs and the buyer’s capital.

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The BRRRR Method

Whether you are investing in real estate personally or trying to start a real estate investing business, you’ve probably heard of BRRRR. This investment method involves taking a run-down property and investing money to fix it up so you can make a profit on it.

The BRRRR method has been proven to provide a great cash flow, even making it possible to have financial independence through rental income. However, this type of real estate investing isn’t right for everyone. What is this method exactly, and is it right for you?
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