Isabel Marant said it best, “In Los Angeles, you can have the city life but feel like you’re on vacation at the same time”. When I lived in LA I would drive by the beach on my way to work and think to myself, this is paradise. You can stand on the beach in Santa Monica while looking at the snow on the mountain tops in the distance. LA is the most populated city in California and the second most populated city in the country after New York City. LA has so many landmarks that people come from all over to visit: the Hollywood sign, The Capitol Records Building, Grauman’s Chinese Theatre, Griffith Observatory, Hollywood Boulevard, and so many more. LA is also known as the entertainment capital of the world and a place that is known to the world is the Hollywood Walk of Fame where a reported 10 million tourists visit each year.

But let’s talk about the real estate market in LA. As a private lender, LA is a market that gets us very excited. The California housing market is one of the hottest and most profitable in the United States and the Los Angeles housing market is considered to be one of the premier housing markets for investors. While Los Angeles home prices may be increasing slightly over the next year or so, the fact remains that there are many homes available at fair prices. According to LA.cubed.com typical home prices in LA are about 8 times higher than the median income. According to Zillow.com, the median home value is $687,700 which has gone up 2.7% over the past year.

Since LA is such a hot market for real estate, Sharestates has taken a big interest in forming relationships there. Here are a few projects that we have recently funded.

This first property is located in Encino, California. Encino is a neighborhood that is located in the San Fernando Valley region of LA. The median household income is $78,529 and the average household size is 2.3 people. The neighborhood is filled with quiet blocks and big homes but also has apartment building clusters here and there. Encino is considered to be an upper-middle-class historic neighborhood. Residents love its small-town feel with amenities within walking distance. This property is a residential property where the borrower acquired funds for renovations, such as replacing the cabinets in kitchen and bathroom, relocation of all plumbing/gas fixtures, and updates to the existing structure.

Loan Amount: $1,950,000

Loan Type: Refinance

Property Type: Residential

 

The second property is located in Central LA, close to Hollywood. There are so many great advantages to living in this area. From walking through Hollywood to a short drive to Dodgers Stadium for some baseball to heading to The Grove for the afternoon to get some shopping done. The list of things to do is endless. This property is an 8 unit multi-family property that the borrower acquired with the intention of adding value through renovations. This large project includes adding two additional units making a total of ten units. New stainless steel appliances will be added, all new paint, new bathrooms, central air conditioning, and each unit will receive a washer/dryer.  

Loan Amount: $1,463,000

Loan Type: Purchase

Rehab Fund: $218,285

 

The last property showcased here today is a residential property located in the neighborhood of Westchester. This neighborhood is close to the beach towns such as Santa Monica and Venice beach on one side of LAX (Los Angeles International Airport) and Manhattan Beach and Hermosa Beach on the other side. This home is only about 2 miles from LAX. The borrower acquired this property as a “Fix & Flip”.  Rehab will consist of a complete overhaul of the property starting with the foundation all the way to new plumbing, a new HVAC system, new appliances, new roofing, adding in a gas fireplace, windows, flooring, tile, and hardware like cabinets and doors.

Loan Amount: $920,000

Loan Type: Purchase

Rehab Funds: $609,450

 

 

To see more of Sharestates recently funded projects or find out how to get funding for your next real estate project click below.

When someone mentions The Bronx they usually think of Yankee Stadium, the Bronx Zoo or the Botanical Gardens because they are all popular tourist destinations. When it comes to real estate opportunities, this borough has had a much lower profile than its famous neighboring borough, Manhattan. Since the late 1980’s, however, there has been a significant amount of development which was first brought on by the city’s “Ten-Year Housing Plan”. In 2006, The New York Times reported that “construction cranes have become the borough’s new visual metaphor, replacing the window decals of the 1980s in which pictures of potted plants and drawn curtains were placed in the windows of abandoned buildings. In addition, there is a revitalization of the existing housing market in areas such as Hunts Point, the Lower Concourse, and the neighborhoods surrounding the Third Avenue Bridge as people have been buying apartments and renovating them. There are also several boutique and chain hotels that have opened in recent years.

According to some reports, several Bronx neighborhoods saw double-digit price increases in 2017. Some of those who have been priced out of Manhattan and Brooklyn have increasingly looked for homes in The Bronx due to the easy accessibility to Manhattan. According to Property Shark the elevated housing demand in the neighborhoods around the boulevard pushed the median home sale price to increase 68% in just 5 years—from 2014 to 2018. The housing market near the Grand Concourse has surged in the past 5 years, including neighborhoods such as Mott Haven and Bedford Park. Concourse Village has an authentic NYC feel to it, with plenty of bars, restaurants, coffee shops, and parks. The crime rate has dropped over the years, and public schools in the neighborhood have an above-average rating.

Sharestates has been busy funding loans in The Bronx and formed many great relationships there. One such recently funded property was a multifamily building located in the South Bronx neighborhood Mott Haven. Mott Haven is primarily a residential neighborhood that has been undergoing a gradual reinvention, with restaurants opening and people coming in and rehabilitating buildings and/or building new ones. The borrower is planning on doing rehab work to add value. Rehab includes a complete overhaul including but not limited to new structural work, new HVAC system, all new electrical systems, iron & steel work, all new drywall, and new plumbing. When rehab is complete the property and or units will be leased out to tenants.

  • Loan Amount – $3,235,000
  • Rehab Budget – $2,250,000
  • Loan Type – Purchase
  • Purchase Price – $2,100,000

Another recently funded property was a multifamily property located in the Wakefield section of the Bronx. Wakefield is a middle-class section of the northern part of the borough and borders Westchester County to the north. Though Wakefield is about an hour commute via public transportation, it has a bit of a suburban feel to it which is attractive to its residents. The borrower has approved plans to convert the property into additional residential units and add square footage. With plans to rehabilitate this property, there will be a new plumbing system put in, electrical, windows, and repairs on elevators and much more. The borrower plans on selling the property once the project is complete.

  • Loan amount – $4,945,000
  • Rehab Budget – $2,510,000
  • Loan Type – Refinance

The last recently funded project we’ll highlight was a residential property located in the East Tremont neighborhood of the Bronx. East Tremont is in the western part of the borough and is also a very urban neighborhood made up of mostly apartment complexes and high rise apartment buildings. Commuting to midtown Manhattan can be done by way of the subway or Metro-North railroad. The borrower plans on doing rehab work to increase the value of the property and then stabilize the investment.

  • Loan Amount – $542,000
  • Property Type – Residential
  • Loan Type – Refinance

 

To see more loans that Sharestates has funded in the Bronx or inquire about funding your next loan click below.

An opportunity zone is a federally designated low-income area targeted for investment in order to revitalize the communities and kick start the economy. Real estate developers are offered tax incentives for reinvesting capital gains into these zones. Recently, LOCUS published a report ranking the top opportunity zones in the U.S. But what does this ranking mean for real estate developers?

An Overview of Opportunity Zones

There are currently more than 8,700 opportunity zones in the continental U.S., district of columbia, and U.S. territories. The LOCUS National Opportunity Zone Ranking Report compares these zones against three primary metrics – Smart Growth Potential, social equity, and a Vulnerability Index score (SEVI).

Smart Growth Potential is a proprietary filter to help investors identify which opportunity zones take priority based on their potential to deliver economic, environmental, and social returns. This filter rests on four identifiable metrics: Walkability, job density, housing diversity, and distance to the nearest top 100 central business district (CBD). Scores range from a minimum of 10 to a maximum of 20. For social equity and SEVI, LOCUS used four variables: transit accessibility, housing, and transportation affordability, diversity of housing tenure, and the Social Vulnerability Index. Again, the minimum score is 10.

Using these metrics and the scoring algorithm, LOCUS made some interesting discoveries. Only 2% of the opportunity zones scored a 10 or higher on these metrics, 13% of the opportunity zones with Smart Growth Potential less than a score of 10 are in rural areas, and only .18% of Americans live in both a high opportunity and a high equity opportunity zone (i.e. they are walkable urban places and socially and economically inclusive).

Where are the Top U.S. Opportunity Zones Located?

According to the report, the top scores for opportunity zones among the top 30 metro areas with the most Smart Growth Potential are New York, Los Angeles, Philadelphia, and Chicago. Charlotte, San Antonio, Orlando, and Dallas received the lowest scores. The states with the highest scores include New York, California, Maryland, New Jersey, Pennsylvania, and Ohio.

According to the report, the top scores for opportunity zones among the top 30 metro areas with the most Smart Growth Potential are New York, Los Angeles, Philadelphia, and Chicago. Charlotte, San Antonio, Orlando, and Dallas received the lowest scores. The states with the highest scores include New York, California, Maryland, New Jersey, Pennsylvania, and Ohio.

The top 11 opportunity zones based on Smart Growth Potential are:

  1. Downtown Portland (CBD) – Census FIPS 41051010600
  2. Downtown Oakland
  3. Downtown Seattle
  4. Center City East in Philadelphia
  5. Inner Harbor of Baltimore
  6. Downtown Newark
  7. Downtown Portland (CBD) – Census FIPS 41051005100
  8. Downtown Detroit
  9. Journal Square in New York
  10. Downtown St. Paul
  11. Wilshire Central BID in Los Angeles

The top 10 social equity and vulnerable places with high Smart Growth Potential include:

  1. Downtown Portland (CBD)
  2. Downtown Oakland
  3. Downtown Seattle
  4. Downtown Newark
  5. International District in Seattle
  6. Downtown Sacramento
  7. Wilshire Central BID in Los Angeles
  8. Westlake in Los Angeles
  9. Campus District in Cleveland
  10. Downtown Honolulu

Top U.S. Opportunity Zones by Product Type

Product types make a difference too. New York, for instance, scored high among offices asking for rent, multifamily properties asking for rent, and retail space asking for rent. Other notable high scorers among office space include Hollywood, San Francisco Bay Area, Miami, and Seattle. Among multifamily properties, Cleveland’s Campus District, various Los Angeles neighborhoods, San Francisco, and Seattle scored high. Rounding out the top five in retail are Miami, San Francisco, Los Angeles, and Seattle.

Top opportunity zones across all product include Hudson Yards/Hell’s Kitchen in Manhattan, East Village in Manhattan, Kips Bay in Manhattan, Williamsburg in Brooklyn, Greater Flushing Queens, Brooklyn Heights, East Harlem, Central Harlem, Downtown Brooklyn, and Williamsburg South in Brooklyn.

The Four Opportunity Zone Quadrants

When scoring, LOCUS categorizes each opportunity zone as either high or low equity and either high or low opportunity, based on their scores in the associated metrics. In that regard, each opportunity may be considered to fall into one of the following four quadrants:

  1. High Equity / Low Opportunity
  2. High Opportunity / High Equity
  3. Low Equity / Low Opportunity
  4. High Opportunity / High Equity

The report contains a lot of detail on each opportunity zone with each of the metrics analyzed for each opportunity zone. It’s a great read, and developers looking for opportunity zones to invest in would do well to check it out.

An opportunity zone is a federally designated low-income area targeted for investment in order to revitalize the communities and kick start the economy. Real estate developers are offered tax incentives for reinvesting capital gains into these zones. Recently, LOCUS published a report ranking the top opportunity zones in the U.S. But what does this ranking mean for real estate developers?

An Overview of Opportunity Zones

There are currently more than 8,700 opportunity zones in the continental U.S., district of columbia, and U.S. territories. The LOCUS National Opportunity Zone Ranking Report compares these zones against three primary metrics – Smart Growth Potential, social equity, and a Vulnerability Index score (SEVI).

Smart Growth Potential is a proprietary filter to help investors identify which opportunity zones take priority based on their potential to deliver economic, environmental, and social returns. This filter rests on four identifiable metrics: Walkability, job density, housing diversity, and distance to the nearest top 100 central business district (CBD). Scores range from a minimum of 10 to a maximum of 20. For social equity and SEVI, LOCUS used four variables: transit accessibility, housing, and transportation affordability, diversity of housing tenure, and the Social Vulnerability Index. Again, the minimum score is 10.

Using these metrics and the scoring algorithm, LOCUS made some interesting discoveries. Only 2% of the opportunity zones scored a 10 or higher on these metrics, 13% of the opportunity zones with Smart Growth Potential less than a score of 10 are in rural areas, and only .18% of Americans live in both a high opportunity and a high equity opportunity zone (i.e. they are walkable urban places and socially and economically inclusive).

Where are the Top U.S. Opportunity Zones Located?

According to the report, the top scores for opportunity zones among the top 30 metro areas with the most Smart Growth Potential are New York, Los Angeles, Philadelphia, and Chicago. Charlotte, San Antonio, Orlando, and Dallas received the lowest scores. The states with the highest scores include New York, California, Maryland, New Jersey, Pennsylvania, and Ohio.

According to the report, the top scores for opportunity zones among the top 30 metro areas with the most Smart Growth Potential are New York, Los Angeles, Philadelphia, and Chicago. Charlotte, San Antonio, Orlando, and Dallas received the lowest scores. The states with the highest scores include New York, California, Maryland, New Jersey, Pennsylvania, and Ohio.

The top 11 opportunity zones based on Smart Growth Potential are:

  1. Downtown Portland (CBD) – Census FIPS 41051010600
  2. Downtown Oakland
  3. Downtown Seattle
  4. Center City East in Philadelphia
  5. Inner Harbor of Baltimore
  6. Downtown Newark
  7. Downtown Portland (CBD) – Census FIPS 41051005100
  8. Downtown Detroit
  9. Journal Square in New York
  10. Downtown St. Paul
  11. Wilshire Central BID in Los Angeles

The top 10 social equity and vulnerable places with high Smart Growth Potential include:

  1. Downtown Portland (CBD)
  2. Downtown Oakland
  3. Downtown Seattle
  4. Downtown Newark
  5. International District in Seattle
  6. Downtown Sacramento
  7. Wilshire Central BID in Los Angeles
  8. Westlake in Los Angeles
  9. Campus District in Cleveland
  10. Downtown Honolulu

Top U.S. Opportunity Zones by Product Type

Product types make a difference too. New York, for instance, scored high among offices asking for rent, multifamily properties asking for rent, and retail space asking for rent. Other notable high scorers among office space include Hollywood, San Francisco Bay Area, Miami, and Seattle. Among multifamily properties, Cleveland’s Campus District, various Los Angeles neighborhoods, San Francisco, and Seattle scored high. Rounding out the top five in retail are Miami, San Francisco, Los Angeles, and Seattle.

Top opportunity zones across all product include Hudson Yards/Hell’s Kitchen in Manhattan, East Village in Manhattan, Kips Bay in Manhattan, Williamsburg in Brooklyn, Greater Flushing Queens, Brooklyn Heights, East Harlem, Central Harlem, Downtown Brooklyn, and Williamsburg South in Brooklyn.

The Four Opportunity Zone Quadrants

When scoring, LOCUS categorizes each opportunity zone as either high or low equity and either high or low opportunity, based on their scores in the associated metrics. In that regard, each opportunity may be considered to fall into one of the following four quadrants:

  1. High Equity / Low Opportunity
  2. High Opportunity / High Equity
  3. Low Equity / Low Opportunity
  4. High Opportunity / High Equity

The report contains a lot of detail on each opportunity zone with each of the metrics analyzed for each opportunity zone. It’s a great read, and developers looking for opportunity zones to invest in would do well to check it out.

Chicago, like every other major city in America, has its good attributes and bad ones. Your experience living in Chicago has a lot to do with where you live. From Uptown to Hyde Park, East Garfield to the Loop, each of the metro area’s 77 official community areas brings its own unique personality. Since Chicago is located in the midwest, most residents ooze friendliness. Though, once the winter months appear, all bets are off. U.S. News analyzed 125 metro areas in the US and Chicago was ranked #87 for best places to live and #39 for best places to retire too.

The cost of living in Chicago varies greatly from neighborhood to neighborhood. The average cost of a home in Chicago is $222,350, but in certain areas, houses can cost upwards of $1M and more. Another obvious conversation about whether or not to live in Chicago is the weather. Summers can be extremely hot while winters can be unbearably cold, but public transportation is a major perk to living in the Windy City. Many Chicagoans opt-out of owning their own vehicles due to traffic and lack of parking, but there is a robust public transportation infrastructure to support them.

Sharestates has funded many properties in Chicago. One such property is located in the neighborhood of Kenwood. Kenwood is on the shore of Lake Michigan and on the South Side of the city. This neighborhood has some of the largest single family homes in all of Chicago and is the home of President Barack Obama and some other famous people in American history, including Muhammad Ali. Kenwood was once considered the most affluent neighborhood in all of Chicago.

The borrower for this property is acquiring the building with the intention of adding value through rehab. Rehab for this property consists of new drywall, new inside plumbing and electrical, all new kitchens with new appliances and a new HVAC system. When the rehab is complete, the property will be leased out to tenants.

  • Loan Amount: $597,000
  • Purchase Price: $465,000
  • Multi-Family
  • LTV: 50%
  • LTC: 73%
  • Average renovation budget: $349,550
  • ARV: 60% or $1,000,000

The second property is located in the neighborhood of Auburn Gresham more commonly referred to as “Gresham”. This area is about 9 miles south of downtown Chicago. This area is called the “Bungalow Belt’ due to the streets lined with hundreds of arts and crafts inspired brick homes throughout the residential area. These row houses are unique and beautiful. Gresham is also known for the finest “soul food” in the city that people come from all over to try.  

The borrower for this property previously acquired and renovated the building. The borrower intends to refinance the property, in order to pull out equity and pursue new real estate opportunities. The borrower will rent the property and obtain traditional financing to repay the loan.

  • Loan Amount: $390,000
  • Purchase Price: $312,000
  • Mixed Use
  • LTV: 74%
  • LTC: 76%
  • ARV: 50% or $785,000

The last property we’re showcasing is located in the Bedford Park area of Chicago. With a population of less than 700, the neighborhood is primarily a tiny residential area with large amounts of heavy industry. Bedford Park only covers about 6 square miles with a median household income of about $64,000. The median property value is about $168,000. The average age is in the high 30’s, and most people own their own homes.

The borrower for this property previously acquired the building and is refinancing to obtain construction funds to begin the build-out. The borrower is planning on updating the heating system, add new appliances, windows, wood flooring, and painting. The borrower intends to complete the build-out and either sell at completion or refinance into a conventional loan.

 

  • Loan Amount: $330,000
  • Purchase Price: $465,000
  • Multi-FamilyLTV: 63%
  • Average renovation budget: $111,300
  • ARV: 65% or $510,000

 

 

To see some more of Sharestates recently funded properties in Chicago or other parts on the U.S. or to learn about our loan programs to get funding for your next real estate project please click below.

What can I say about Brooklyn, NY? It’s one of my favorite places. It is the most populated borough of NYC with an estimated 2.7 million residents as of 2017 and one of the most diverse as well. Bordering Queens and Long Island NY, there is easy access to Manhattan commuters through bridges and tunnels by bus, rail or fixed gear bicycle. Brooklyn has a long and storied history, but as of the 21st century, it’s the preferred destination for young professionals looking to make their mark on this rapidly transforming borough. With all of these new arrivals choosing to live in Brooklyn as a lifestyle choice as opposed to settling on Brooklyn out of the need to save money, there have been dramatic price increases in real estate throughout the borough.

Brooklyn is well known for all the different ethnic communities that have settled there over time. There are many different ethnic enclaves of Brooklyn including Jewish, Chinese, Latin, African, Caribbean, Italian, and Russian/Ukrainian just to name a few. These close-knit communities are one of the reasons Brooklyn is such a unique place and is sought after by many looking for diversity in culture and, most importantly, restaurant options.

Brooklyn is also becoming a place where tech companies and entertainment companies are quickly moving to get out of the high rent areas of Manhattan. The job market in Brooklyn has grown exponentially in recent years, causing more people to consider the move out of Manhattan for better work-life balance.

Sharestates has formed some fantastic relationships with builders and brokers in Brooklyn and has funded a ton of real estate projects. From ground-up construction projects to multi-family buildings and fix & flip renovations projects, Sharestates has helped Brooklyn developers reach heights.

Here are only a few of our recently funded properties in Kings County:

This first property is located in the Sunset Park section of Brooklyn. Sunset Park is made up of more than 120,000 residents from many different ethnic backgrounds. It is divided into 2 neighborhoods, Sunset Park West and Sunset Park East. The property will feature one Community Facility unit on the first floor, two one-bedroom units on the second, third and fourth floors, and two 2- bedroom duplex units on the fifth and penthouse levels.

  • Loan Amount: $3,500,000
  • Mixed use
  • LTV: 62%
  • Average renovation budget: $400,000
  • ARV: 58% or $4,975,000

The next property is located in the Bushwick neighborhood of Brooklyn. Bushwick is located on the north side of the borough with accessibility to Manhattan via subway and/or bus. Since the early 2000’s real estate prices have increased in Manhattan making the further reaches of Brooklyn, including Bushwick, more attractive to young people moving to the city.  At the time of this loan, the building was vacant but plans will consist of an 8 unit multi-family building.

  • Loan Amount: $2,950,000
  • Purchase Price: $3,300,000
  • Multi-Family
  • LTV: 75%
  • LTC: 74%
  • Average renovation budget: $665,000
  • ARV: 72% or $4,100,000

The next property is located in the Bedford Stuyvesant community of Brooklyn. This community borders the very popular section of Williamsburg and Bushwick. Bed Stuy as it is referred to is made up of streets with historic brownstones that Brooklyn is famous for. This property consists of a vacant four-story, six-unit, multi-family dwelling built in 1931 that is currently in the process of being gut renovated.

  • Loan Amount: $2,040,000
  • Purchase Price: $1,800,000
  • Multi-Family
  • LTV: 80%
  • LTC: 74%
  • Average renovation budget: $951,400
  • ARV: 56% or $3,625,000

The final property showcased in this article is located in Crown Heights. Crown Heights is a centrally located neighborhood of Brooklyn that has access to the 2,3,4, and 5 subway lines, making the commute to Manhattan very convenient and quick. This property is currently vacant and is a 4 story, a mix-use building that was built in 1910. The property will undergo a major gut renovation and be converted into an 8 unit residential building.

  • Loan Amount: $2,125,000
  • Multi-Family
  • LTV: 72%
  • ARV: 64% or $3,300,000

 

For more information about other properties, Sharestates has funded or to submit your upcoming projects to get funding click below.

According to the Texas A&M Real Estate Center, the Texas housing market decelerated in 2018 with total sales rising only 1.7%. Sustained growth in the national and state economies supported housing demand, but low listings inventories and waning affordability continued to be affected. Builders ramped up construction activity, but supply constraints persisted for homes priced less than $300,000. Home prices were largely unaffected by the 2008 crash, according to Forbes, and have been climbing up about 10% per year since then.  Although the market isn’t yet seriously overpriced, it’s on the way. Prices are expected to keep rising for several years.

Sharestates has been active in the Texas real estate market and has funded some impressive projects there recently.  One such property that Sharestates recently funded was in an area called River Oaks, in Houston. This area is located between Downtown and Uptown Houston and was once considered one of the most expensive neighborhoods in Houston with real estate values ranging between $1 million to over $20 million. The neighborhood is surrounded by beautiful parks, culture and a great school district.

  • Loan Amount: $2,660,000
  • Purchase Price: $3,000,000
  • Residential
  • LTV: 77%
  • LTC: 79%
  • Average renovation budget: $370,000
  • ARV: 65% or $4,110,000

Another property that Sharestates recently funded was in West Columbia in Brazoria County. This is a small town located about an hour drive from Houston and also about an hour drive from the beaches of the Gulf of Mexico. There are only about 4,200 people who live in the city, with a median income of  $38,090.

  • Loan Amount: $1,650,000
  • Purchase Price: $2,200,000
  • Multi-Family
  • LTV: 72%
  • LTC: 75%

 

 

For more information about other properties, Sharestates has funded or to submit your upcoming projects to get funding click below. 

Hard money loans are short-term higher-interest loans that assist real estate developers and investors acquire property and bankroll expenses related to their real estate projects so that they remain solvent, liquid, and increase their chances of success. They’re an integral part of the real estate investing process with some clear upsides and downsides.

The Pros of Hard Money Loans

There are several reasons why serious real estate investors rely on hard money loans to finance fix-and-flip projects. Here are the top benefits of hard money loans for house flippers:

l  Speed – Hard money loans can be acquired much more quickly than traditional bank loans. They do not usually require credit checks and other due diligence that causes the process to move more slowly at banks. Many hard loan lenders are able to provide money for real estate investments because their primary consideration is whether an investment is a good deal or not.

l  Flexibility – Every hard money lender has their own set of criteria to loan money for a real estate project. Most hard money loans do not come with a list of restrictions that usually beset conventional loans. For that reason, they are more flexible and allow real estate investors to change project goals midstream if necessary.

l  Leverage – Hard money loans provide tremendous leverage for fix-and-flip investors. The investor can enter a project without putting their own money at risk and remaining liquidity.

The Cons of Hard Money Loans

While there are incredible benefits to using a hard money loan for fix-and-flip real estate investments, there are some downsides. Before taking a hard money loan, do your due diligence on the loan, the lender, and, of course, the property investment.

Some downsides to hard money loans include:

l  Interest rates – All real estate investors should consider the cost of capital. Hard money loans are typically higher-interest loans because they are riskier for the lender.

l  Higher-risk – The lender is not the only person assuming a risk on hard money loans. The borrower is also taking a risk. Because the loans are higher-interest and short-term, these loans are riskier because they can lead to high financial burdens if not entered wisely.

l  Must be paid back quickly – Hard money loans are short-term loans. They are typically for 12 months or less, and the investor is on the hook for repaying the loan in the time frame specified. If they are not paid back on time, the investor may be seen as a bigger risk on the next loan and find it difficult to get a loan for their next fix-and-flip project.

Where to Find Hard Money Loans

Hard money loans are not hard to find. Banks, however, do not offer them. Years ago, local private real estate lenders were the primary source of hard money. More recently, however, the JOBS Act of 2012 has made it easier to find hard money loans online. Real estate crowdfunding platforms, marketplace lenders, and other peer-to-peer business models may or may not refer to themselves as hard money lenders, but that is, in essence, the service they are providing.

When you are ready to fund your next fix-and-flip property, be sure to conduct your due diligence on potential lenders thoroughly. Whether you get your hard money loan from a single lender or from an online marketplace with multiple investors financing your project, make sure you look at the lender’s loan history and review the terms of your loan closely. Ultimately, you’ll want to find a partner with a track record of success lending on the property type you’re interested in developing, so that you can grow together over time with more successful projects down the road.

Learn more about Sharestates track record.

When you think about luxury communities near top U.S. ski destinations, what comes to mind? For many people, names like Telluride, Breckenridge, Big Sky, and Park City are at the top of the list. But do ski properties make good investments? Today, we’ll discuss the pros and cons of investing in ski properties. Is it worth it?

Pros of Investing in Luxury Ski Properties

Ski resorts offer investors a unique opportunity. For starters, this is a luxury market, and it’s not just a luxury market. It’s a high-end luxury market. People who buy ski resorts are often buying their second home, and the thought process is typically different than it is for buying a first home.

Before you rush in on a ski property investment, you should decide what you are going to do with the property. You have several options. If it is a fix-and-flip property, you’ll need to make sure your after-repair value will leave you room for a profit. Other options such as renting the home, offering it as a timeshare property, or making it your second home could be just as lucrative in the long-term, but you must decide on your plan. Develop your exit strategy before you enter the investment.

That said, there are some distinct advantages to investing in a ski property. These include:

  • The clientele – Since you are dealing with a luxury property, and quite possibly a second home, you will be doing business with people who have a lot of money at their disposal.
  • A ready-made market – Ski properties have a built-in market. Not only are they luxury investments, but ski property buyers are in a class by themselves. According to the Mountain Resort Market Outlook by RCLCO Real Estate Advisors, mountain resort sales transactions correspond with the number of skier visits at the resort. If you invest at a popular resort, you’ll be sitting pretty.
  • Potential ROI is higher – Because luxury ski properties tend to start in the upper six-figure range, your potential ROI is higher, especially if you invest in a fix-and-flip and buy at a better-than-average LTV.
  • Predictable market – Ski resort property markets are more easily predictable than average housing markets. For one thing, it’s seasonal. If you wait to buy at the beginning of ski season, you are too late and will see more competition. Another consideration is the specific geographic location. A more popular resort lends itself to potentially higher transaction values and less time on the market. Another market indicator may be the overall state of the economy.
  • The timeshare option – Many winter vacationers do not want to own a property they will only live in for two or three months. A ski property lends itself to timesharing. In fact, there is a solid market for vacation properties that offer fractional opportunities.

In general, there are plenty of upsides to investing in luxury ski properties, but there are also pitfalls.

The Cons of Investing in Ski Properties

One downside to investing in high-end ski properties is property taxes. Higher values homes come with bigger tax burdens. If you are a buy-and-hold investor, prepare to pay a lot of real estate taxes. Other downsides include:

  • Property maintenance – If you own the vacation property, you are responsible for the upkeep. If you don’t live near the ski property, that can be a burden. You’ll need to hire someone you can trust to keep an eye on the property.
  • Association fees – Many ski resort properties are a part of co-ops, or they are condominiums. If you invest in these properties, expect to pay association dues.
  • Risky investment – High-end luxury vacation properties are risky investments. All sorts of things can go wrong. And if you lose on these investments, you could lose a lot of money. The key is to buy at the right place in the right location, and at the right time. Remember, develop your exit plan before you enter the investment.

Ski properties are great opportunities for serious investors if they have a solid business plan. Just make sure it’s solid before getting started.

Here are some properties in Park City that have been funded by Sharestates

  • Loan Amount: $2,562,000
  • Purchase Price: $2,400,000
  • Property Type: Residential
  • LTV: 80%
  • LTC: 80%
  • ARV: 58%
  • Loan Amount: $2,103,000
  • Purchase Price: $900,000
  • Property Type: Residential
  • LTV: 80%
  • LTC: 73%
  • ARV: 64%

To look at more real estate properties that Shareshares has funded or to inquire about funding your next project click below

Baltimore’s real estate market is experiencing quite a bit of attention from investors recently. The economy has been experiencing slow but steady growth, making it a reliable choice to invest in real estate properties. The top industries that have been boosting the Baltimore economy are in areas such as healthcare, education (due to so many large colleges in the area), life sciences, and cybersecurity, but also the Port of Baltimore to a large extent. According to mashvisor.com, fix-and-flip investments proved successful for Baltimore real estate investors in 2017, 2018 and may continue through 2019. In fact, fix-and-flip investors boasted a whopping 96.6% average return on investment in 2017! This was supported by a year-over-year increase of investment property prices in excess of 2.4%. According to baltimorepostexaminer.com back in November 2018 the median home price in Baltimore was $237,855, much lower than some bigger real estate markets in the country, leaving investors with a lot of opportunity to expand their real estate portfolios.

Sharestates recently funded several blanket loans in Baltimore with properties in several different locations of the city. Several property locations are surrounding Druid Hill Park, a beautiful urban park in northwest Baltimore. Druid Hill Park, like Central park in NYC, is one of the oldest landscaped public parks in the US. Neighborhoods surrounding Druid Hill Park are known to feel suburban like in an urban city with good schools and smaller parks but also a good bar scene for the younger crowd. The following blanket loan was for a borrower acquiring the properties with the intention of adding value through renovations. The initial loan was for $2,745,000 with a rehab budget of $465,000. The properties in the blanket loan were all single-family residential properties.

Property Photos:

 

  • Loan Amount: $2,745,000.00
  • Purchase Price: $2,095.029.52
  • LTV: 58%
  • LTC: 80%
  • Average renovation budget: $465,000.00
  • ARV: 47% or $5,825,000.00

 

 

 

For more information about other properties Sharestates has funded or to submit your upcoming projects to get funding click below.

Private and institutional investors are branching out into smaller markets to achieve higher returns. According to Forbes.com more than half (55%) of the apartment properties bought and sold for more than $1 million in 2017 were located in secondary markets which is up from 42% in 2010. Also according to Forbes.com there are a few key benefits:

  • They are less volatile in downturns, which makes them particularly attractive late in the investment cycle.
  • Deals in these markets are not overvalued and offer higher returns.
  • They offer stronger growth potential due to a lower cost of living and less supply.

For portfolio diversification, Sharestates offers investment opportunities in secondary markets also. Here are a few properties recently funded by Sharestates, below.

This first property is located in Austin which is the capital of Texas and also one of the largest cities in the US.The city of Austin is about an hour and twenty minutes from San Antonio and about three hours from Houston. Austin is known for its live music scene, endless sunshine, natural beauty/outdoor adventures and the great balance of small town feel to big metropolis.

  • Loan Size: $303,000
  • Residential
  • Purchase Price: $295,000
  • LTV: 72%
  • LTC: 84%
  • Average renovation budget:   $67,200
  • ARV: 68% or $466,000

The second property is in Saint Paul, the capital of Minnesota. Saint Paul has big city amenities like museums and sport stadiums but also a very midwestern feel. Separated by the Mississippi River, the Twin Cities (Minneapolis/Saint Paul) are considered one metropolitan area but actually include two unique cities, featuring downtown cosmopolitan cores surrounded by distinctive neighborhoods and suburban communities.

  • Loan Size: $233,000
  • Residential
  • Purchase Price: $206,847
  • LTV: 76%
  • LTC: 76%
  • ARV: 66% or $351,000

The last property we’re highlighting is in Charlotte, North Carolina. Charlotte is the most populated city in North Carolina and has been ranked as one of the fasted growing cities from 2004 through 2014. There are many great reasons to live in Charlotte. The job market is booming with both the corporate headquarters of Bank of America and the the east coast hub of Wells Fargo located there. Charlotte has fantastic schools, and the quality of life is often cited as a reason for moving to the area with a cost of living below the national average by about 4%. 

  • Loan Size: $2,670,000
  • Residential -Town House
  • Refinance
  • LTV: 64%

 

 

For more information about other properties Sharestates has funded or to submit your upcoming projects to get funding click below.