Invest

An investor who decides to purchase a property and hold it for possible rentals is considered to conduct a "buy and hold" purchase. They have conducted research and concluded that this method is most feasible financially.

Whenever you are considering a "buy and hold" option, it is imperative that you research the current capitalization rate (cap rate) in the area. A capitalization rate determines your overall Return on Investment and/or Net Operation Income. It is also the ratio between an investor's Net Operation Income and purchase price.  An investor should compare the capitalization rate of potential properties prior to purchasing and, always remember that the higher the capitalization rate, the better. 

An investor who decides to purchase a home and sell it post renovations is considered to conduct a "buy and flip/sell" purchase. They have conducted research and determined that the Return on Investment (ROI) is worth while. A portion of an investors' research is based on comparable properties, also known as "comps". Comps are derived by finding properties that are close in square footage, bedrooms, bathrooms, and features that have either recently sold (within the past year) or are currently pending.

Hard Money Lenders are private individuals and/or entities who are willing to lend money to investors. Beware that every hard money lender operates differently (e.g. interest rates, loan terms, willingness to loan, etc). Be sure to shop around for the best rates. Read the fine print. Become familiar with the timeframes to flip the investment property mentioned in the contract. Most Hard Money Lenders will provide financing for 70-85% LTV (loan to value).