Hard Money Facts

When you’ve successfully launched your first rental investment—maybe you've renovated the place and stayed within budget, tenants are secured, and you have consistent cash flow coming in—it can feel like you’ve cracked the code. Passive income, long-term equity growth, and tax advantages are just a few of the reasons smart investors look to investing in rental properties in the first place. But the real momentum starts when you go from one or two properties to building a full-scale portfolio.

So, how do you scale strategically and what should you keep in mind as you grow? We've outlined a few smart strategies to help you build your rental empire, one property at a time.

If the Federal Reserve’s rate hikes have your stomach in knots, you’re not alone. America is grappling with an affordable housing crisis. Demand remains high, but rising interest rates have created a gridlock in supply. It’s tempting to hunker down and wait for the storm to pass during such uncertain times. While this defensive approach is common, history teaches us that challenges often mask opportunities.

As the new year approaches, the real estate market continues to evolve, presenting new challenges and opportunities for investors. Whether you're focusing on fix-and-flip projects or building a portfolio of long-term rental properties, staying informed and agile is key. Here are some practical tips to help you thrive in the year ahead.

As the new year approaches, it's the perfect time to set fresh goals and shape your investment strategies for success in 2025. Real estate investment properties offer exceptional opportunities to build wealth, but maximizing returns requires a thoughtful plan. Here are some key steps to help guide your investment property strategies and make 2025 your most profitable year yet. 

As you trade those shorts and tanks for sweaters and fireside blankets, try not to get too cozy—motivated real estate investors know that this chilly season can offer a hotbed of opportunities. From less competition to potential tax deferment, we're outlining some compelling reasons why winter might just be the perfect time to get your next project underway.

As we move further into 2024, the real estate market continues to evolve, with suburban areas emerging as prime spots for rental property investments. The pandemic’s lasting impact on work-life dynamics has driven many families and professionals to seek more space and a better quality of life outside urban centers. For real estate investors, this shift presents a golden opportunity. Let’s explore some of the hottest suburban markets for rental properties in 2024.

This month, Fitch Ratings downgraded the United States’ long term ratings from AAA to AA+, citing growing government debt and repeated fights in congress over raising the debt ceiling as major factors in their determination. You might be wondering: is this bad news for single-family real estate investors?

Hold that thought.

Is your stomach turning every time the Fed raises their rates? You’re not alone. America is facing an affordable housing crisis; demand for affordable housing is high, but the high interest rate environment created by the Fed is producing gridlock when it comes to supply. You may be thinking it’s a good time to circle the wagons and wait out the storm. A defensive stance like so is not uncommon in times of economic uncertainty. But if history has a way of repeating itself (and it does), then now is the time to hunt for opportunity.

According to the 2022 US Home Affordability Report by ATTOM, median-priced single-family homes and condos were less affordable in the fourth quarter of 2022 compared to historical averages in 99% of counties in the US. Moreover, major home-ownership costs now eat up 32% of the average national wage, the highest percentage in fifteen years.

With high interest rates, soaring property values, and inflation forcing the average home buyer out of the market, many real estate investors today have pivoted their investment strategy to focus on single family rentals. The problem is their rehab budget hasn’t pivoted. Many flippers are using the same approach to rehab rentals as they would a flip—to the detriment of their ROI.

Here are some things to consider when budgeting to flip vs. hold.

Rehabbing Fix and Flips vs. Rehabbing Rentals 

Every budgetary concern with your flip needs to align with your exit strategy. It’s not simply about rehabbing too much or too little (although that’s part of it); It’s about choosing upgrades that align with your ultimate goal, to flip or hold. Buyers and renters evaluate and use your property differently, so every decision you make—from which rooms to prioritize, to landscaping, appliances, and finishes—needs to take their perspectives into account.

With 450 million travelers worldwide choosing vacation rentals over hotels in 2020, it’s no wonder why this investment strategy seems so appealing to investors. As the market continues to quickly grow with the prospect of profit (and a few other perks), there are still some considerations to weigh.

Whether you were flipping houses long before Chip and Johanna Gaines had a television show or you’re just now considering dipping your toe into the industry – this market is sure to leave you wondering if now is the time to start (or continue) your fix-and-flip journey. Together, we’ll be looking at the opportunity for profit and the obstacles that currently stand in the way.

1. Is the current market conducive to making a profit?

Home prices are still on the rise. The nationwide median listing price for active listings in September 2021 was $380,000, up 8.6 percent from the previous year and up 20.6% compared to 2019. The S&P CoreLogic Case-Schiller Index published the Home Price NSA Index on September 28, 2021, revealing home prices had soared 19.7% in the last 12 months. With affordable housing inventory still low and buyers (or renters) incredibly hungry for a place to call their own, sellers are being showered with offers that are much higher than list price. No one know when the market will flatten out or turn – that’s why it is so important to never forget that there are still other market factors to take into consideration when assessing an opportunity.

Now that we’re less than half a year away from 2022, what do we know so far about 2021? In the last year alone, median values of single-family homes and condos rose more than 10% nationally. This rising surge of new house hunters and a super tight supply of housing inventory was also impacted by an ongoing pandemic. With mortgage rates remarkably low, home buying became an attractive option for many Americans seeking more space, a second home, or a work-from-home office with a better view.

SLIGHT DIP OR REAL DOWNTURN?

Now, halfway into the 10th year in this housing boom, many home investors wonder: will real estate markets flatline or drop? How long will these high prices last? While we can’t see into the future, we have some new data about how 2021 compares so far to prior years, both before and since the housing boom. According to a report from ATTOM, fix-and-flip real estate investments have fallen to the lowest level since 2000. In the first quarter of 2021, the same report cites only one in 37 transactions, or only 2.7% of home sales, were flips. Compare that figure to where we were in the first quarter of 2020: down from 7.5%, or one in 13 sales were categorized as fix-and-flips.