If there’s one thing investors can count on, it’s market volatility– if it’s not increasing, it probably will be soon enough.
Real estate investing can be one of the most reliable ways to ride out an unstable market. While not without risk, a strong real estate portfolio can withstand many of the daily ups and downs that send stock prices on a rollercoaster.
Here are three tips to help maximize the success of your property portfolio strategy when it includes fix-and-flip investments.
#1. Location, location, location.
The old adage about location is true: choosing properties in the right locations is perhaps one of the most important real estate decisions you can make. When you choose to buy a property in a desirable or up-and-coming neighborhood, it may be more likely to hold its value as an investment, whether you’re holding onto it or rehabbing it to resell. A good deal in the right neighborhood won’t stay on the market long, working with Bay Mountain Capital can help investors move quickly on real estate opportunities that offer great promise. As a hard money lender, Bay Mountain Capital has the agility to handle loan applications and closings with speed.
#2. Keep a firm handle on your debt, including your leverage/debt ratio.
Look for ways to build up a reserve fund as part of your real estate investment strategy. Not only will cash help you weather small problems, but it also puts you in a prime position to pick up affordable investments. By keeping your debt under control, you have greater leverage to move on to prospective real estate deals that inevitably come up for sale during times of market volatility.
When your own debt-to-asset ratio is too high, you risk finding yourself in a tight financial spot during a downturn. If your property portfolio loses value and you’re already overloaded with liability then carrying that level of debt becomes even more difficult. Working closely with your lender during the loan application process can ensure your leverage/debt ratio stays manageable.
#3. Always be willing to walk away from a real estate investing deal.
Real estate, like any investment, will have ups and downs. Downs can require you to draw on more of your personal resources than expected, leaving you in a precarious financial position, especially during a fix-and-flip. When you commit to a deal at all costs, you may find yourself making decisions you wouldn’t otherwise ordinarily make in attempt to salvage it.
By preparing a detailed budget and staying on top of estimates and cost overruns for a real estate project, you’ll have a clear-eyed look at your finances. This will allow you to make decisions based on facts and not your feelings.
Market volatility naturally comes with investing. While it can certainly be concerning, continuing to invest in real estate can help stabilize your portfolio as the value of stocks and bonds bounce up and down. Working with a lender who has an experienced team of real estate and lending professionals poised to act quickly on your loan application can allow you to capitalize on available properties to flip.
Contact Bay Mountain Capital today and learn how a hard money loan can advance your real estate investment strategy.
About Bay Mountain Capital:
Bay Mountain Capital has been in business for more than a decade, closing approximately 2,000 loans. We specialize in financing all types of residential and commercial property investments throughout Texas and Georgia. Using common sense and value-added approach, we strive to incorporate these principles into our underwriting and closing processes.
As a direct lender, Bay Mountain Capital can close a loan within one day after receiving a complete file and clear title. The process generally takes two weeks for a residential loan but can be accelerated where circumstances require it.
We are primarily an asset-based lender, which means that qualification requirements are limited. Our rates and fees are among the lowest in the industry.