Learn How to Make Money from Real Estate
Frustrated with the Housing Market?
Are you frustrated with your search for the perfect house? Looking to find a loan for a house purchase, or renovation and repairs, can be difficult. Once money is mentioned, the idea of it sometimes gives you a headache. Don’t stress about it. Noble Mortgage and Investments wants to help, no matter how bad your credit is. With Dallas hard money loans, we give you the opportunity to purchase and renovate a house in the Dallas area without that stress.
Typically, our Dallas hard money loans are used to help with real estate investments such as house flipping. Because of the higher rate, the need for the loan is mostly used for projects that are short term in nature. Instead of needing put down a large lump of cash, however, we use leverage instead.
What We Mean By Leverage
So what exactly is leverage? Well, generally speaking, leverage occurs when you use a tool to reduce the amount of force needed to move a large or heavy object. Ergo, a lever. In terms of investments, leverage occurs when you use borrowed money for making an investment. This is a great choice when you expect that the profits will be greater than the interest.
When it comes to real estate investments, leverage typically refers to using the property itself to acquire the loan. Unlike a traditional loan or mortgage with a cash down payment, failure to pay does not end up in a loss of cash. Instead it results in a loss of property. Because of this, you can acquire very sizeable loans even with a bad credit score. Depending primarily on the quality of the property. Leveraged loans tend to have a higher interest rate than traditional loans, but their short terms and high profitability tend to make it more than worthwhile for the average house flipper or real estate investor.
3 Ways to Leverage Dallas Hard Money Loans
1. Flip Houses
House flipping takes some time, money, and determination, but is a great way to make good money quickly for a task driven individual with an eye for real estate. Let’s say you buy a run down house for $200,000 but the cost of repairs will add an additional $40,000. This will add up to $240,000. Traditional mortgages will only give you the $200,000, and typically require 20% down. That’s $40,000 in cash. Chances are, you don’t have that kind of cash lying around, so that’s where we step in. A Dallas hard money loan can provide you money to cover the purchase, pay for repairs, and a little more for your own piggy bank
If the ARV (after repair value) is estimated to be $300,000, you may be able to get that much in your loan. If you’ve done your math right, that means that any sale over $240,000 (cost of propety and repairs), is cash in your pocket. So take it from us, don’t just look for the cheapest property, look for the one that’s going to be the easiest to sell at the best profit.
2. Purchase Multiple Homes
Another way to leverage a Dallas hard money loan is through multiple properties. Maybe you’re looking at purchasing multiple distressed properties and selling them, but need to acquire them quickly. For example, you may decide to pull out a $450,000 loan in order to purchase three homes for $150,000 each. A traditional mortage would cost you about $30,000 per house ($90,000 total). Add in the cost of repairs, and you’re looking at an investment of over $150,000.
For many investors, that’s some serious cash. If the after repair value of the house (ARV) is estimate to be $200,000, you may qualify for a $600,000 loan. And if you hire some good remodeling contractors, and can sell each at $225,000, well you just took in around $75,000. Now that will certainly take some time, will power, and good old elbow grease. Nevertheless, it’s an incredible 6 month investment if you can do it.
3. Become a Landlord
You may not have thought of it, but being a landlord doesn’t have to be a full time occupation. And even if you own multiple rental properties, you can hire a management company to oversee the property for you. In fact, the most successful landlords we know tend to be the least involved in their properties. Many investors leave it up to the property management pros to provide the best care and service possible.
Are you interested in using a Dallas hard money loan to become a landlord, that is, a rental property investor? If so, then you’ll want to check out our Joe the Investor, combination loan program. These loans start off as a typical 6 month hard money loan, but then transition to a 20-30 year conventional mortgage. This will give you the opportunity to make some cash on the hard money side, while generating long term passive income through traditional rental property means.
Get Pre-Qualified for a Dallas Hard Money Loan Today
If you are looking into making a large profit return from real estate within the Dallas area, get pre-qualified today! Call us today at (214) 492-0100 or apply online and see how Noble Mortgage and Investments can help you.