National foreclosure rates are at all-time lows – except in one area: the Tri-state area. New Jersey, Delaware and Maryland posted the top foreclosure rates in 2018. Part of the reason for the high foreclosure rates is the states’ long foreclosure process. Properties from the housing crash are just now reaching foreclosure.
Knowing that there is potential to make money off real estate in the Tri-state area, more house flippers are setting their sights on this location. If you are thinking about it, too, here are five secrets that will help you pull off a successful fix and flip in the Tri-state area.
1. Buy at the right price.
In order to make money off your flip, you need to buy the home at the right price. With a number of foreclosed properties, inventory is more plentiful than in other areas. Stick to your criteria, such as finding properties that don’t need a ton of work. If you buy the property at the right price and can turn it around quickly, it’s more money in your pocket.
2. Buy in the right location.
Buyers in the Tri-state area want locations that are near mass-transit, have good schools and see low crime. When you narrow down potential properties, make sure they are in good locations. Also consider who you are trying to sell to and what amenities they will find important. For example, couples with kids want safe neighborhoods that are within walking distance to parks, libraries and swimming pools.
3. Target townhomes and condos.
In New Jersey, townhomes and condos are more in demand than single family homes. Buyers prefer these types of properties because they are easier to maintain. Most have an association that takes care of snow removal, lawncare, tree and shrub maintenance and more. If you come across a townhome or condo that needs updating, don’t pass it up.
4. Add inexpensive special touches – don’t over improve.
If you buy a property in a neighborhood where most homes have laminate countertops and linoleum floors, you don’t need to install granite and hardwood. You probably won’t get your money back. Stick to improvements that have an impact but don’t cost much, such as changing out light fixtures, painting cabinets and updating hardware.
5. Use a hard money lender for quick financing.
Traditional lenders want money down and take their time when approving loans. Hard money loans are fast, and lenders generally don’t care about credit scores. You get the money you need within a few days, allowing you to be competitive. The funding can be used to buy the home and complete the rehab. When you sell the property, you can pay back the loan and have a profit for your next investment.
The Tri-state area remains an attractive place to live because of the close proximity to big cities and everyday amenities. If you want to invest in a fix and flip property in this area, contact First Equity Funding to secure a hard money loan.