For real estate investors planning to start the process of acquiring a new property asset to add to your portfolio, you will have to make an important initial decision when it comes to handling the financial aspect of the transaction. The majority of investors will have to borrow capital from a lending entity; however, there are a broad range of potential lenders to choose from—and the funding source that you end up settling on will significantly impact your experience over the lifetime of the subsequent loan. One of the biggest distinguishing factors among the lending options that you have available to you is whether they are classified as a traditional or private lender. Although each and every investment property acquisition differs in some aspect, the majority of seasoned real estate investors choose to work with private money lenders as opposed to a traditional bank. The experienced team of financial experts at Coastal Capital Funding have years of experience crafting innovating funding solutions that enable investors to grow and scale their businesses—here’s their take on some of the main advantages of working with a private lender.
Conventional banking institutions are required to abide by stringent federal guidelines when underwriting loans. That translates into severely reduced flexibility when it comes to offering investors financial options to close a deal. Banks are also usually larger organizations. Meaning that while you may submit your loan application at the nearest location, there may be hundreds of affiliated offices scattered throughout the country all managed by a remote corporate office that sets the overarching policies. So if you do not met their specific requirements exactly, you have no other alternative but to seek out an alternative lender. This is not how private lenders function. For starters, the applicable statutes for private lenders are far less restrictive, allowing them to work with investors to develop viable funding plans that are individually tailored to each unique investment project. Private lenders are also typically much smaller entities. Just miss the credit score requirement by a quarter of a percent? A traditional bank would show you the door. Only need a loan for six months? There’s a good chance a bank would laugh you out of the office. A private lender like Coastal Capital Funding, on the other hand, is willing to work with you in both scenarios to come up with a solution.
On top of having the ability to adjust the underwriting requirements to qualify for a loan, private lenders are also capable of adjusting course midway through the loan term to adapt to changing circumstances. Unexpected developments and setbacks can and often do happen during investment projects that can inhibit an investor’s ability to make timely payments. Banks’ standard operating procedure is to send you a few delinquency notice letters then repossess the property. Or, alternatively, if you generate more revenue than expected and attempt to pay off the loan ahead of schedule, they will hit you with a huge prepayment penalty. Private lenders can adjust repayment schedules easily and Coastal Capital Funding does not impose prepayment fees. At the end of the day, your success as an investor is a win for the Coastal team—and we are more than willing to go the extra mile to make it happen.
A Trusted Lending Partner
Coastal Capital Funding is a direct private lender that prides itself in offering accessible and efficient funding solutions for investors throughout Virginia and North Carolina as well as across the country. We implement a transparent, common-sense philosophy when it comes to underwriting, allowing us to facilitate transactions of all sorts in a fraction of the time and hassle it takes if you were to work with a traditional bank. What differentiates CCF from other lenders is Service, Service and Service. Our phones are available to our clients 7 days a week. With over three decades of collective experience in the real estate industry, the CCF team has the insight to help you take your investment business to the next level. Contact us today to learn more!
Political and economic uncertainty can significantly influence various sectors, including the real estate market. In times of instability, investors and consumers tend to exhibit caution and adopt a wait-and-see approach. In this article, the Private Lending experts at Coastal Capital Funding explore the potential relationship between political and economic uncertainty and its effects on the real estate market, highlighting the key factors that contribute to fluctuations in this sector.
Investor Confidence and Market Volatility
Political and economic uncertainty erodes investor confidence, leading to increased market volatility. Investors can be hesitant to commit to long-term investments, such as real estate, due to concerns about policy changes, unstable economic conditions, and potential shifts in government regulations. This hesitancy can lead to decreased demand for properties, impacting both residential and commercial segments of the real estate market.
Financing and Mortgage Rates
During times of political and economic uncertainty, financial institutions become more cautious and tighten their lending standards. This can make it more challenging for individuals and businesses to secure financing for real estate transactions. This is a great time to build a relationship with a hard money lender or a private lender who can bridge that financing gap.
Additionally, uncertainty can result in fluctuations in mortgage interest rates, making it difficult for potential buyers to predict borrowing costs accurately. Higher interest rates may discourage individuals from investing in real estate or make it harder for them to afford properties, leading to a slowdown in the market.
Consumer Sentiment and Buying Behavior
Uncertainty affects consumer sentiment, influencing their buying behavior in the real estate market. When individuals are unsure about the future economic and political landscape, they may delay purchasing decisions, especially regarding significant investments like real estate. Reduced consumer demand can result in longer selling times, increased inventories, and potentially lower property prices.
Foreign Investment and Global Capital Flows
Political and economic uncertainty in one country can have a spill-over effect on global capital flows. Investors, particularly those from abroad, may divert their capital away from countries experiencing instability and direct it toward more secure markets. Consequently, the real estate market in countries with high levels of uncertainty may experience a decline in foreign investment, impacting property values and market activity.
Government Policies and Regulations
Political uncertainty often leads to a reevaluation and potential revision of government policies and regulations. Changes in regulations can significantly impact the real estate market, such as altering tax structures, land-use policies, or zoning regulations. Uncertainty surrounding these changes can create instability and deter real estate investors, as they face an unpredictable environment for their investments.
Regional Disparities and Market Segments
Political and economic uncertainty may affect different regions and market segments unevenly. For instance, in times of uncertainty, investors may seek safer investments, leading to increased demand for properties in stable regions or specific market segments, such as prime residential areas or commercial properties with long-term leases. Conversely, regions heavily reliant on specific industries or vulnerable to policy changes may experience more significant declines in real estate activity and prices.
Real estate investing offers several positive reasons to consider it as a great opportunity, regardless of the economic market. With its long-term value, potential for cash flow and passive income, tax benefits, diversification potential, inflation hedge, control over the investment, and portfolio diversification advantages, real estate can be a lucrative and stable investment option. While market conditions may influence specific investment strategies, real estate investing provides the potential for wealth creation and financial stability over the long run.
While uncertainty may lead to decreased activity, longer selling times, and potential declines in property values, it is important to remember that the real estate market is resilient. As stability returns, market dynamics can change, and opportunities for investors and consumers emerge. Understanding the relationship between political and economic uncertainty and the real estate market can help stakeholders navigate these challenges and make informed decisions during times of flux.
The back-to-back increases in builder activity in both January and February 2023 suggest that there is renewed optimism in the construction industry for the upcoming year. While it is difficult to make a blanket statement about the state of the housing market for the entire year, as the market is subject to various factors such as permits, starts, material prices, construction labor, and deliveries, Coastal Capital Funding has provided an analysis on the new construction market for real estate investors and developers to consider as they plan and prepare for the remainder of 2023.
The 2023 new construction market is expected to see steady growth, with a 6.1% increase in the US construction industry and a compound annual growth rate of 5.2% between 2023 and 2027. However, there are some challenges to keep in mind, such as the projected decrease in single-family starts and permits, and the expected increase in construction material prices.
Builders and developers may want to pivot from spec homes to pre-sold homes to limit risk and ensure a profitable exit, and also factor in higher labor costs for a more accurate budget in 2023. Despite these challenges, demand for new builds is still very solid, with a critical mass of buyers in the market.
Overall, while the new construction market may not be as profitable as in previous years, there is still plenty of money to be made in new home sales and starts across the market. Investors and builders should remain attentive to the various factors that may impact the market, such as interest rates and material prices, however the fundamentals are there for builders to succeed and profit in 2023.
CCF offers a comprehensive approach to lending for real estate investors, with a focus on customized loan programs that are designed to meet their specific needs. The emphasis on smart, efficient lending decisions and fast, flexible financing without red tape shows that CCF is committed to helping its clients move quickly in a competitive market. Our quick approvals and hands-on approach demonstrates our dedication to providing excellent service to our clients. If you are looking for a strong, RELIABLE partner for your real estate investing needs, look no further.
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For seasoned residential real estate investors, you probably have experience handling a wide range of new-build initiatives, whether its single-family houses or multi-family developments. However, successfully transitioning from blueprints to fully completed residences entails meticulous planning, considerable time, and—perhaps most importantly—reliable financing.
The good news is that there is a plethora of loan products for you to access the capital you need to complete your next construction project. One great option is using a new construction loan. The lending experts at Coastal Capital Funding have been assisting successful real estate investors for years obtain the financial resources they need to achieve their goals and have leveraged that experience to provide you with the following overview of the major benefits of new construction loans and how you go about obtaining this specifically structured funding.
Construction Loan Basics
To assist you in starting your next construction project off on the right foot, you can opt for a new construction loan to pay for project expenses prior to transitioning to a more long-term form of funding like a conventional mortgage. New construction loans are intended to provide a streamlined capital solution for developers planning to build new homes from the ground up. While it is somewhat similar to your standard mortgage, a new construction loan is distinct due to its efficient underwriting timeline, compressed duration and periodic disbursal schedule at clearly distinguishable project milestones as opposed to one lump sum disbursement.
These short-term funding plans usually only extend for approximately one year instead of continuing for the multiple years conventional mortgages typically do. Based on the particular construction plan, the new construction loan can be used to cover the acquisition of the land, obtaining any necessary licenses, paying fees, or acquiring materials, workers and contractors. Because new construction projects are often on a strict deadline, investors should be prepared to provide their chosen lender with a detailed overview of their proposed development during the underwriting process—including key metrics such as overall operating budget, anticipated timeline and architectural schematics.
Advantages of a New Construction Loan
- Accessibility & Speed: Private lenders like Coastal Capital Funding offer a streamlined underwriting process, allowing them to evaluate, approve and disburse funds in a fraction of the time it takes conventional banks to do so. And because hard money lenders have greater flexibility when it comes to the individuals they lend to, they are able to work with investors who may not have a stellar credit score or verifiable income but still have a viable construction project with tons of potential upside.
- Cost-Effective Funding Alternative: Although conventional financing options and personal loans may carry reduced interest rates, those loan installment plans usually last for multiple decades—meaning you end up paying a ridiculous amount in the form of interest over the lifetime of the loan. Compare that with a new construction loan, where the entire balance will be completely paid off in around a year, with most plans requiring you to only pay interest on funds drawn to date until the project is done. When you crunch those numbers, it is readily apparent that new construction loans can save you a ton thanks to their relatively short duration.
Private Real Estate Lending Made Easy
Coastal Capital Funding is a Direct Private Lender, funding a variety of real estate projects throughout Virginia, North Carolina and Nationwide.CCF offers quick, efficient common-sense funding solutions when traditional lending institutions fall short in terms of speed, underwriting and out of the box thinking.The CCF team brings thirty years of experience in the real estate industry. Our market knowledge and experience has us uniquely positioned to be your private lender of choice. We understand the needs and wants of our clients and we are hands-on with you every step of the way. We approach each deal as if it were our own- by identifying capital requirements and providing the correct funding solution. Get in touch with us today to learn more about how we can assist you in achieving all of your investment goals.
The more advanced technology has become, the more it has altered the real estate investment landscape—enabling investors to accomplish a wide range of investment-related task right from their phone. Just as importantly, technology has enhanced our networking and sharing capabilities significantly, allowing investors to effortlessly connect with fellow real estate professionals to locate, purchase and fund new deals. Breaking into the real estate investment sector is literally only a few clicks away.
Finding the Ideal Investment Asset
Selecting the right investment property that is aligned with your long-term investment strategy is an essential step for successful real estate investors. Digital real estate platforms like Zillow have made it easier than ever to obtain pertinent data for properties across the country so you can assess key metrics like potential ROI, listing price and neighborhood information. Additionally, the site also allows investors to market their properties to viable tenants or buyers—all from the convenience of their computer or cell phone. Having all the information you need almost instantaneously provides investors with a notable advantage in today’s ultra-competitive market, allowing them to make informed buying and selling decisions with minimal delay. Investors may also consider mobile applications like Connected Investors, which aggregates fellow real estate professionals and potential deals that may not appear in regional MLS listings.
Acquiring Investment Properties
Gone are the days of mountains of paperwork and endless signature lines associated with closing a property transaction. Innovative and super convenient mobile applications such as DocuSign eliminates the need for paper altogether and allows for the digital processing of real estate documents. All involved parties can quickly and easily review and sign off on contracts, lease agreements, disclosure and bank documents. The app offers state-of-the art encryption and security features to ensure all data is protected and stored safely.
Another great technological advancement is DealMachine, an online platform that allows investors to digitally search properties and directly reach out to the owners by email or phone. Often it is the most basic tasks that hold up a potentially lucrative deal from moving forward, and this application takes care of one of the most imposing hurdles investors run into: soliciting homeowners and letting them know they are interested in acquiring their properties.
Evaluating Potential Investment Deals
For investors exclusively searching for viable fix-and-flip deals, the PropertyFixer app is an extremely useful tool that makes it easy to forecast renovation budget and providing key insights regarding expense breakdowns (i.e., taxes, insurance, permits, etc.). Investors now have the ability to quickly tap into an accurate analysis of the costs associated with potential fix-and-flip deals so they can calculate hypothetical return on investment and ultimately decide whether or not to commit to a deal.
A comparable application for the rental market is DealCheck, which offers an even more in-depth data analysis for listed properties. This free and user-friendly platform provides a thorough break down of projected costs, expected net profitability and more while offering real-time MLS updates and up-to-date property images.
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The stark reality is that technology is increasingly becoming an integral component of the real estate investing marketplace. Real estate investors should leverage the numerous benefits offered by digital innovations to optimize their workflow and enhance their profitability. Embracing proven technologies and having the willingness to proactively explore emerging ones is a great mindset to have that will keep you relevant and competitive in an industry that is constantly evolving.
The perfect complement to a thorough understanding of available investment technologies is a trusted lender that can provide you reliable and efficient access to the capital you need to close deals. That’s exactly what you can expect when you partner with Coastal Capital Funding, a direct private lender with over three decades of experience assisting successful investors throughout Virginia, North Carolina and across the country. CCF provides quick, efficient, common-sense funding solutions that conventional lenders simply cannot content with. Contact us today to learn more about our comprehensive range of funding solutions!
All signs point to the current housing boom taking place not only in Virginia but the entire country continuing for the foreseeable future. The Commonwealth State experienced an impressive 54% uptick in transactional activity in the past year alone. Now is a fantastic time for savvy investors to capitalize on the favorable market dynamics and lock in assets that will produce consistent returns on investment for years to come. The experts at Coastal Capital Funding crunched the numbers to highlight some of the best areas to kick off your investment property hunt in the Hampton Roads and Northern Virginia markets.
Despite the ongoing COVID-19 situation, the Falls Church area recorded an exponential increase in property sales of 127.3% from June 2020 to June 2021. Surrounding areas experienced similar levels of activity, with Fairfax County reporting a 48.8% spike in home sales during the same period. The number of home sales isn’t the only data point that is trending upwards in the Northern Virginia market—the average home sale price has also risen significantly. The median selling price in the area has jumped 14% from 2021 to $741,574. Fairfax City homes are currently selling for more than 13% than last year, with the average price currently sitting around $615,000. Comparable increases have also taken place in Arlington and Alexandria, where median home prices have risen to $820,150 and $701,302 respectively. Homes are not staying on the market for long either—which is great news for real estate investors as this indicates demand is high for housing options. Prospective homebuyers are willing to pay premium prices for the right fit, meaning there is little concern from an investor’s point of view when it comes to potential vacancy issues.
Here’s a closer look at some of the best Northern Virginia Markets to invest in:
- Fairfax: This suburban community was the first county in the entire country to hit a six-figure average household income. Fairfax offers an abundance of amenities including public parks, museums and dining options and also boasts one the most highly-ratedschool systems in the entire country. The median home price is $544,700 and is projected to increase an additional 3.1% in the coming year. The average monthly rate is currently $1,826 with the median household income reported at $115,717.
- Alexandria: It should come as no surprise why Alexandria tops our list as one of the best NOVA markets to consider for a real estate investment property. Perfectly situated just 10 miles from Washington, D.C., scores of workers flock to this waterfront community drawn by the quick commute to work and the numerous restaurants, shops and parks. Landlords will have no problem finding quality tenants for rental properties and the area’s strong economic performance ensures optimal return on investment.
Some of the key metrics to consider when looking for a market to acquire an investment property in are quality of life, housing prices and employment. Hampton Roads excels in each of these metrics. The region encompasses a wide variety of property types and neighborhoods that offer potential investors an abundance of options. Hampton Roads refers to seven individual cities located throughout Coastal Virginia: Chesapeake, Suffolk, Newport News, Hampton, Portsmouth, Norfolk and Virginia Beach. All of these are solid investment options due to the following unique characteristics:
- Economic Stability: Nearly one-third of the Hampton Road’s economic activity is related to the defense industry. There is a robust military presence in the area and the surrounding economy receives a constant influx of workers, money, and business thanks to its close ties with the industry. Additionally, the tourist sector is thriving thanks to the area’s location on the coast. Vacation rental properties are an excellent option that can produce above-market returns in the Hampton Roads area.
- Ongoing Development: All seven cities comprising the Hampton Roads area are expected to continue to grow in population at a rate well above the national average over the course of the next five years. The steady influx of new residents means there will be a reliable demand for viable housing options for the foreseeable future—a great market trend for investors.
- Amenities: There are a number of educational, recreational and cultural amenities that draw people to the Hampton Roads area. Home to several institutions of higher education such as Old Dominion University and Hampton University, the region has a strong student population that makes multi-family rentals a smart investment option in the area. Furthermore, attractions like the Norfolk Botanical Gardens, Virginia Aquarium and Museum of Contemporary Art draw countless visitors every year—meaning a correctly marketed vacation rental could be a lucrative investment in the area.
A Trusted Lending Partner
The market is primed for successful real estate investments—let the Coastal Capital Funding team use its experience, market knowledge and client-centered approach to lending to assist you in accomplishing all ofyour investment goals! We specialize in delivering individually tailored funding solutions in a fraction of the time it takes traditional banks. Our streamlined underwriting process and flexible terms give our clients a distinct edge in today’s competitive market. Contact us today to learn more!