One rule of thumb is to seek out multiple brokers and not rely solely on information from the first broker contacted. It is the same as choosing any other expert. You will want to be sure to shop around Alexandria, Arlington, Fairfax and Northern Virginia where you will have access and ample options to meet your financial needs regarding rehab properties.

It can be much more difficult to get traditional financing for these rehab or "flip" properties because they are looked at a little differently than a primary residence.

When working on fixer-uppers or flips, you may want to seek a hard money lender for financing rather than a traditional mortgage broker.

Check with your real estate agent in the Alexandria and Northern Virginia area, and you can request referrals for financing options and alternative mortgages and investment property finance firms.

Hard money lenders are willing to loan between 50 and 80% of the value of a property after repairs, whereas traditional lenders will only loan based on a property's current value.

Since they already have local contacts, it is very possible that it will be your real estate agent in [Profile.market2] who has some established rapport with such investors, and it may be another investor who wants to invest and make a good return.

Traditional financing is much cheaper than getting a hard money loan. Typically interest rates range from 12-16%. Please note that you may be required to pay 3 to 5 points up front as well.

The benefit to the investor is that hard money lenders will lend estimated value after repairs and lend money on that amount allowing you to finance all of the repairs needed.

Make sure you include these repair estimates in your purchase and holding costs so that you end up with the profits you are looking for on the property after all is said and done, and you simply look at the costs of hard money loans as a cost of doing business.

Receiving your initial loan in [Profile.market2] may be your toughest while investing. Once you do it once or twice, it will become much easier.

For more information, please don't hesitate to contact me via mobile telephone 202-255-7790 or e-mail, Lee@RealtyLee.com

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 Tags: Alexandria Virginia Real Estate, Northern Virginia home investor, NOVA investing

Article's Author

Lee Ellis
KW
Alexandria to Woodbridge, VA

Contact Lee Ellis