There is a new market arising for home flippers due to Airbnb and VRBO. Some home buyers want a property fixed up so they can turn around and use it for short-term rentals or vacation properties. A few years ago, the answer to the question, "How has the fix/flip industry changed?" had to do with fewer foreclosures. Now many savvy home flippers are less concerned with foreclosures and more worried about finding homes in areas without restrictive HOA (homeowner associations) or county regulations that make it more difficult for Airbnb hosts and landlords. Home flippers also construct homes with two separate living areas in mind for the Airbnb hosts that want to reside in part of the home while renting out the other side of the house. According to an article by The San Diego Union-Tribune, the short-term rental debate drew a lot of people to the San Diego City Council's committee on short-term rental regulations. Experts in San Diego calculate that if trends continue, the number of new Airbnb listings will surpass new homes constructed by 2019. As far as profits, some point out vacation home listings often gain a projected monthly income of as much as $9,800 in areas such a Pacific Beach. In Florida, short-term rentals are also popular.
Checking out the HOA
Before choosing a home to flip with the purpose of marketing to an Airbnb host, thoroughly check out the homeowner association rules and regulations. If possible, talk to the property management company associated with the subdivision. While outsiders are not necessarily allowed to attend an HOA meeting, most HOA presidents or board members will give an honest answer about the attitudes toward Airbnb or similar rental programs. Some associations require the owner to live in the home for at least a year before turning the home into a rental. Ideally, find a home to flip in an unincorporated area without CDD (community development district) fees or HOAs. With no deed restrictions, it's easier to market the home as a short-term rental friendly home. Keep in mind the home is ideally near amenities, shopping, grocery stores or tourist attractions. If it's too far off the beaten track, come up with a theme such as the "bird sanctuary," or "fisherman's haven."
Constructing a home within a home
Ideally, it pays to invest in duplexes if you have Airbnb at the back of your mind. Airbnb hosts who want a place to live love duplexes because they can keep a watchful eye on their property next door while still enjoying privacy. If you invest in a single-family home to flip, find out how much it will cost to add a separate private entryway and second kitchen. For some hosts, a mini kitchenette is enough for them or their guests. The key is to make sure each separate living space has at least one private bedroom and bathroom, and small living area. If local restrictions do not allow for drywall to completely enclose the two different living areas, opt for a secure door that separates the spaces. Avoid making the access to the vacation apartment through a garage or back sliding glass door. Ideally, guests want to walk through the front door or a side door to their rental.
Other important factors for a home renovated for Airbnb include private yard access or outdoor living areas, parking space and good outdoor lighting. Invest in doors with a keypad for a key-less entry. Some guests want access to a washer and dryer. If the investment property is not close to a laundromat, consider a stackable washer and dryer. When marketing your fix-and-flip property, make it abundantly clear to potential buyers that the home is suitable for Airbnb or similar short-term rentals. By doing the homework for your home buyers first, you create a profitable niche. If you know the kind of money other hosts draw in a similar area, point that out to potential buyers. At Center Street Lender, we know investors often wonder how the fix/flip industry has changed through the years. We are an experienced private money lender ready to serve your financial needs. For more information, contact us.
Using modern trends is one of the best ways to get a property flipped and on the market. Whether you use color or over-sized baseboards, walls are an easy and highly visible platform for trendy renovations. But if you want to keep a relatively neutral color palette, a good compromise is an accent wall. The best material for warming up a room and adding a pop is with brick veneer. Figure out the best placement for the feature with these four questions:
1. What other changes are you making to the room?
A brick veneer wall isn't cost-prohibitive or too technical for a weekend DIY project. That means you can either do it to add a dramatic statement in a room you think is a bit drab or you can incorporate it into a whole host of renovation projects you're making to the space. If it's the only change you're making, all you need to do is check the coloring and style against the room's current color palette. Pay particular attention to any window, cabinet, and door hardware in the room. While brick goes well with anything, some shades don't match certain metal patinas. If you're renovating the whole room, you have a bit more of a visual challenge, but you have more options, too. Decide what the primary basis for your new coloring scheme is going to be -- whether it's the veneer wall, the flooring, or the other wall colors, and make the others match accordingly.
2. Is there enough light?
Brick really warms up a room, but it can make it look a little dim or crowded if you don't find a great place for it. Brick veneer walls work best in a few different spots. If you're working with an interior space, choose the smallest wall of the room. These won't shrink down the room and it lets the other three walls lighten up the room. It's also a great backdrop for lighter-colored furniture and even better if it's broken up by a suspended television. If you're renovating an exterior room, choose the wall with windows or a glass door. The natural light brightens up the feature while letting the brick keep the cozy look you wanted in the first place.
3. What does the fireplace look like?
Depending on the style of the house, the fireplace may already be set with brick or a brick veneer. If you're adding an accent wall in the same room as it, make sure both bricks match (even if it's not precisely the same) and that the two brick features don't overwhelm the room. If you have an open floor plan or you can see both the wall and the fireplace at the same time, making them work well together is essential; adding a brick veneer wall to a bedroom or upstairs space gives you much more room to pick another shade and style. And you don't have to let your fireplace have the final say. If you like a certain shade of brick veneer more than you like your current fireplace, redo both based on the best choice for the color palette.
4. Do you want antique, reclaimed, or new?
Finding the right brick veneer for your walls is about more than finding the right coloring and gradient. It's also about the full statement you want to make with your wall. Adding antique brick veneer gives your home extra history, especially if you are in New England or near historical metroplexes across the Midwest. Using antique brick also helps tie the exterior and interior of your building together if you bought a property in an older neighborhood. Reclaimed brick has the same weathered, lived-in tones, and it's good for the environment. Instead of using newly constructed materials, choosing reclaimed brick veneer means you're saving bricks from being demolished and sent to landfills; it also means there's no environmental cost through the construction of new materials.
Adding a brick veneer wall to your investment property is a great way to add new style to the walls and transform the space for quicker sales. For more tips or help financing your next project, contact us.
Millennials are not only addicted to avocado toast, but to HGTV because of dreams to own their own home. While millennials contributed more than $514 billion as part of the largest generation of home buyers in the United States, experts point out many still can't buy homes. By helping the younger generation overcome the top issues that stand in the way, it's possible to reach the millennial market as a home flipper. When it comes to how to sell your flip to millennials or how to buy a home to flip as a millennial, start with a budget. Most millennials can't afford luxury homes. Aim to flip a starter home to reach the young buyers. According to an article by cnbc.com, millennials are not self-indulgent or lazy. Instead, they deal with affordability issues and other generations' home-buying habits. A recent survey of people ages 18 to 75 revealed a lot of frustration related to housing.
Qualifying for a loan with a partner
Experts say millennials feel like homes as well as apartments are too expensive because of lower wages. Also, there are not as many starter homes on the market. Today's average home buyer is 40 years old with a median income of about $87,000. They are typically married or living with a partner. To tilt the odds of qualifying for a mortgage, some millennials team up with a partner. As a home flipper, keep in mind that your buyers will possibly want two separate living spaces within the home. By adding a door and a second kitchen, it's feasible to create a home within a home. By pooling resources, buyers are more likely to have a 20 percent or better down payment. Thirty-percent of millennials buyers say they went over their budget when buying a home. With the right financial partner, it's easier to stay on a realistic budget.
Outsmarting other generations
Housing analysts also point out millennials can't buy homes as easily because of younger and older generations. Generation Z competes for the starter homes. Also, baby boomers either stay put or downsize, eating up even more of the starter home inventory. Some millennials rent out part of their homes so they can afford a higher mortgage cost. One survey showed millennials have a more optimistic attitude about home buying compared to other generations. In fact, people in their late 20s and 30s are 49 percent more likely than older people to think the American dream is within reach, a Hearth survey reports.
While some young buyers opt to live with siblings or roommates, others buyers have small families. When flipping homes, stick to the basics as far as a fenced yard, attractive landscaping, a laundry area, at least three bedrooms and two bathrooms. Buyers of all ages love an open space concept, but a split floor plan provides privacy. When it comes time to stage your fix-and-flip property, gauge the reaction of potential buyers. While you can't easily change the floor plan to respond to criticism, it's easy to alter the staging. Because so many young buyers love to watch HGTV and other home improvement shows, stick to the modern and contemporary interior colors and styles such as Modern Farmhouse that feels right to the younger buyer.
At Center Street Lending, we provide short-term loans for investors ready to turn a fixer-upper into a dream home. Whether you are a first-time investor or an experienced home flipper, contact us and we can help with financing to renovate a home quickly for a solid return.
As a residential property investor, you'll want to improve the properties that you've purchased with a minimal amount of investment. It's essential to select the right kind of design updates to get the best return on your money. If you're planning renovations, the following interior design trends will add beauty and value to any home.
Paint the Interior – Simply painting the rooms is one of the easiest ways to give a home a fresh and updated look. Neutral colors have become the most common choice. With neutrals, homebuyers have more decorating options. Neutrals also go with any style of home from traditional to contemporary. The most popular neutral color is white. Beige is another excellent color to choose. Gray has become trendy among homeowners, and recently, taupe has also become a stylish selection for interiors, which combines gray with a bit of brown.
Large Kitchen Island – Many homes no longer have breakfast nooks, and eating casual meals in a formal dining room isn't always comfortable for a family. As such, many homeowners now love to use their kitchen island for serving breakfast, lunch, and snacks to their family. To accommodate a family, a large island with bar stools becomes ideal. A big kitchen island also gives more preparation space for meals and an area for children to do homework and other projects. Opt for a gorgeous quartz countertop for ease of care and durability. A slightly less expensive but elegant choice is marble. Either one will add a chic look to the kitchen.
Bold Powder Room – Because a half-bath is small, decorating choices often seem limited. However, you can design a trendy-looking powder room quite simply. Consider using textured wallpaper in the space to make it stand out and give it a more luxurious look. A raised sink is also a fabulous and fashionable addition. Opt for large floor tiles instead of small ones. Large tiles make a small area feel spacious because it doesn't look as divided up but more like one continuous space. For powder rooms without a window, you'll also want brighter lights to make the area feel less claustrophobic.
Home Office – With people working such long hours, an office in any home is a necessity these days. Not all homes have a separate space designated for work though. However, when selling a property, you can stage one of the bedrooms as an office. When you set up an area like this, it lets prospective homebuyers see alternate options on how to use the room. Also, if the bedroom is tiny, an office setup won't call as much attention to the square footage. Just place a small but attractive desk and a comfortable-looking chair in the room, along with one or two bookcases. Keep the space open and feeling airy so it will appear more spacious than it is.
Freestanding Tub – Consider installing a freestanding tub in the master bathroom. This option has quickly become a favorite design element in today's homes. Whether you choose a traditional clawfoot tub, a transitional design with ball feet, or a modern style with an apron, you can't go wrong with updating the bathtub. Built-in spa tubs are nice, but a freestanding design adds grace to the decor and an expensive, custom feeling to a master bathroom. Homebuyers will immediately picture themselves soaking in the tub after a long day and view it as the perfect retreat where they can rid themselves of their stress.
If you need financing for one or more homes, please contact us today. Our loan programs – designed for investors who repair and improve properties – contain no hidden fees. We provide flexible underwriting and quick funding. We welcome the opportunity to work with you.
How Private Money Loans Can Help a Real Estate Investor
Investing in real estate and flipping properties can be a great way to earn a significant income. When you are looking for properties to purchase, one of the biggest decisions you will have to make is how to obtain financing to make the purchase. When you are looking for financing for your investment property, there are many different options to choose from. While many people choose to go to a traditional bank, there are several advantages that come with getting a loan from a private money lender.
Easier Underwriting and Qualifications
One reason why you should consider getting a loan from a private money lender is that the underwriting process is easier and the qualifications are not as significant. When you get a loan from a traditional bank, you will likely have to spend a significant amount of time providing the lender with bank statements, income verification statements, and a variety of other reports. The bank will then spend a considerable amount of time reviewing all of this information and asking you plenty of questions while they go through their underwriting process. This can be a very stressful time and could lead to a loan denial if you do not meet all of the parameters.
While a private money lender will request some information from you to determine whether they want to provide the loan, they will be focused more on your business plan and experience than your current financial position. Furthermore, they are not subject to the same rigid approval standard and are more likely to be able to provide you with the loan.
Another advantage for getting a loan from a private money lender is that it is a much quicker process. When applying for a loan from a traditional bank, the process from initial application to loan funding is upwards of 60 days in length. For those that are looking to buy a deal at a discount to flip, this can make it impossible to react quick enough to win the best opportunities. On the other hand, when you take out a loan from a private money lender the process is much quicker. Private money lenders typically need only a few days to review the loan proposal and provide you with the capital necessary to finance the purchase. This can help you to make a much more attractive qualifying bid when looking to buy an investment property.
When you are looking to purchase a property as an investment to renovate and flip there is always a good chance that you could incur higher costs than you originally expected. If you took out a loan from a traditional bank, there would not be much that you could do to get more money from the bank. However, private money lenders are more knowledgeable about real estate investments and understand how costs can increase higher than expected. The private money lenders will likely be willing to work with you to find a solution that will provide you with the capital necessary to complete the project.
Finally, private money lenders are very experienced with house flipping projects and could provide you with valuable insights into your business plan. They will be able to provide you with additional ideas that could allow you to earn a greater return on investment or help you identify project risks that you were not previously considering.
If you are considering investing in real estate and want to flip a home or have been in the business for some time, contact us to learn more about how we can help you and ensure you are able to earn a great return on your investment.