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!
Choosing the right investment market in Virginia is the secret behind generating sustainable passive cash flow. Regardless of whether you are seeking low entry costs, optimal monthly rent prices or the long-term appreciation potential, here is a closer look at some of the best performing Virginia real estate markets for fix-and-flip projects.
With a large millennial population base accounting for over a third of the nearly one-million strong population, Richmond is prime real estate for a fix-and-flip investment property. As millennials start to hit ideal homebuying age, there is an increased demand for properties in the Richmond area as only 1.3% of institutional investors acquired property this year—meaning property prices are still affordable and offer great yields. Richmond and the surrounding areasare jam-packed with a variety of amenities from the Virginia Museum of Fine Arts to a vibrant culinary scene. The median sales price remains an affordable $235,000, which translates into a low barrier of entry for aspiring real estate investors. Property is appreciation at a healthy 2% per year in Richmond, which bodes well for long-term profitability.
The allure of fun in the sun is sure to draw viable buyers for a recently flipped property. Virginia Beach is the largest city in the entire state with a population of 425,000 residents and is constantly ranked as one of the most family-friendly areas. Population and employment growth are steadily rising as well. The city boasts a bustling town center, a vibrant social scene, and many outstanding restaurants—all of which will help investors in selling their rehabbed properties at a premium price point. With three and a half military bases, agriculture and tourism all supporting the booming local economy, meaning that potential homeowners will have the buying power and confidence to snap up promising real estate.
Also referred to by locals as the “City of Seven Hills,” Lynchburg boasts a rich and storied history that shaped its currently thriving culture. While its historical architecture, lively downtown area and outdoor recreation draw crowds from all over, the city is also home to some of the best public-school systems Virginia has to offer. That is prompting a notable rise in the population as homebuyers with children flock to the area. On top of all that, Lynchburg is also host of five colleges. The average home sales price is a very affordable $153,000—which has risen by 7.2% in the last year alone. Real estate investors should get involved in this up-and-coming market soon while the prices are still favorable.
If you are a fan of laid-back living on the water, then Norfolk is the place for you. Homeowners can enjoy sailing, watersports, and scenic views everywhere they look, making it easy for real estate investors to quickly resell renovated properties. With a bustling main street and playing host to NATO headquarters and the Atlantic Fleet of the Navy, the largest naval base in the world,Norfolk and the region have a very strong economy and a healthy job growth rate. More and more employees and military personnel will be moving to the area in the coming years, and they will all need a place to live. What’s more, Norfolk is also the location of Old Dominion University and Norfolk State University, which is great news for property fix-and-flip projects as students and faculty are always on the hunt for flexible and affordable housing options.
Roanoke is one of the top-performing markets in Southwest Virginia and has a property to fit any investment approach—from commercial spaces to multi-family complexes. It is the region’s economic and social hub, meaning there is excellent employment opportunities that has led to an ever-increasing number of incoming young professionals all looking for a place to live. With a growing population of over 315,000 residents, landlords should have no concerns with finding viable tenants. Home to Roanoke College and within driving distance to a number of other higher education options, rental properties catering to students and millennials will perform well indefinitely in this quaint, historic city.
Get Started Today
When it comes to funding, having the right lending partner can make all the difference—especially when investing in what can oftentimes be a complex and nuanced real estate sector like fix-and-flip properties. The experts at Coastal Capital Funding have years of experience providing efficient and innovative construction funding solutions. We are intimately aware of the unique challenges and concerns real estate investors must navigate in this exciting asset class. Contact us today to learn more about how we can help you reach your investment goals.
All sectors of the modern real estate sector are evolving at breakneck speed. Although a considerable number of real estate investors have successfully leveraged the notable uptick in price increases to record historic profits, the current market still presents a wide range of uncontrollable variables that make for a dynamic environment in which to conduct business.
The good news is that talented professionals across all sectors of the real estate industry—from lenders to key stakeholders—are actively developing creative solutions to the growing number of challenges that investors face in the rapidly changing real estate market.
Supply Chain Delays
The ongoing COVID-19 situation has created backlogs in several key global supply chains—making it harder and costlier to attain needed construction materials for development purposes. There is presently an overwhelming demand for newly-built residential homes which is fueling price increases and making home ownership untenable for many a would-be homebuyer. Investors should focus on creating and maintaining close working relationships with sponsors and lenders to ensure accurate budget forecasting and that projects stay on track to reduce overall expenses.
Another culprit behind the price creep across the country is the widespread inventory shortage. Due to historically low interest rates, the national real estate market still holds a considerable amount of appeal for both foreign and domestic investment entities. This has led to a significant increase in the number of institutional investors becoming active players in the residential real estate space—particularly in the single family rental class. The resultant bidding wars for the limited number of viable investment properties has driven up property values but has simultaneously put notable pressure on investors and private lenders to adapt. Fortunately, with the expiration of both the federal eviction and foreclosure moratoriums, the inventory situation should begin to improve in the near future.
For a large segment of the real estate investor community, it has been challenging to find a qualified appraiser—a necessary component of any transaction—due to the uptick in delays. Although delays in the appraisal completion fluctuate from market to market, a number of densely populated urban areas are currently experiencing more than a three-to-four-week delay on average. This increasingly common problem is mainly volume and market-driven. For instance, the national number of qualified appraisers has dipped nearly 15% over the last eight years alone and is continuing to rapidly decline as many of the more experienced professionals reach the age of retirement. Help is on the way, however, as a number of official licensing agencies are attempting to reduce the appraiser shortage by altering the certification criteria and implementing virtual options into the training pipeline. Additionally, there is a growing number of desktop and drive-by appraisal companies that real estate investors may want to consider as an alternative solution if they are facing a time-crunch to close on a deal.
Set Yourself Up for Success
One of the most important decisions that you will have to make early on in your real estate investment career is how you will fund your business transactions. Having a reliable and trustworthy lender with the requisite industry experience to offer you invaluable insights and guidance all whilst providing you with fast and efficient access to the capital you need when you need it is something that is hard to find in the modern real estate era—but that is exactly what you get when you choose to partner with Coastal Capital Funding. We are a Nationwide Direct Private Lender that lends on non-owner-occupied property, providing a comprehensive range of products from fix-and-flip loans to new construction financing (and everything in-between). Contact us today to learn more about how we can help you navigate the current marketplace and achieve your investment goals.
At first glance, shorter-term rental loans might seem like the more cost-effective approach when compared to 30-year loans as they typically have a lower interest rate. When you break down all the factors, however, the inherent flexibility afforded by a 30-year loan offers some distinct advantages for real estate investors. Acquiring rental assets is a fantastic investment, particularly when you have the ability to leverage your finances to purchase multiple properties and optimize your cash flow streams. While there are plenty of investors out there that pursue short-term mortgages because their interest rates are lower and they believe they can pay off their debt faster, the more logical approach is to maximize revenue by acquiring several properties via a 30-year rental loan.
Crunching the Numbers
Say you get a 15-year, $200,000 loan for a rental unit at a 4% interest rate. That means the payments will be $1,480 a month. Over the entire lifespan of that loan, you will pay a total of $66,286 in interest. With a 30-year loan at 4.5% interest, the total interest you would pay over the life of the loan would be $164,812.
Now you may see those numbers and the first thing that jumps out is that you are saving $98,526 by opting for the shorter-term loan. The catch, however, is that you are paying interest over an extended timeframe with the 30-year option as opposed to the 15-year loan. The monthly payment on the 30-year loan is a mere $1,014, whereas in a 15-year loan setup you would be paying $1,480 a month.
Assume you reinvested that extra $466 dollars a month you would have if you went with a 30-year loan back into the principal payments of the loan balance, which means you would only wind up paying $79,508 in interest and be paid off in under 17 years. It certainly costs a nominal amount more to carry a higher interest rate, but over the course of 15-years that is only $1,100 additionally per annum—which is even less substantial given the fact that money is worth less over time thanks to the effect of inflation.
Sure, you will end up paying marginally less in interest with a 15-year loan as opposed to a 30-year loan. If you total the payment savings with the 30-year option, you save $5,592 per year and $83,880 over 15 years by going with the longer-term loan.
That extra capital can be utilized for several different purposes that will ultimately produce significantly more value than the $12,000 in interest you would save with the interest you would receive by choosing a shorter-term loan. You can use the cash to solidify an emergency fund. Alternatively, you could pay extra into the mortgage for the time being, and if a situation arises unexpectedly that required you to increase your expenses, you could simply halt the extra mortgage payments for as long as necessary.
From an investor’s perspective, a 30-year loan also enables you to acquire more rentals simultaneously—which allows you to significantly maximize your passive income. For example, assume you buy 119 properties over 30 years with 30-year loans compared to 32 houses with 15-year loans. The first approach would net you $53,000 monthly, whereas you would only realize an $11,000 profit with the 15-year loan option.
Our hard money loans give you the cash you need to submit a competitive offer on your next investment goal without having to wait weeks or months to receive your funds. The experts atCoastal Capital Funding understand the unique challenges and dynamic nature associated with real estate investing and pride themselves in crafting creative and effective financial solutions that are individually tailored to fit your specific needs and objectives. Contact us today to learn more about how we can help you get started on building your investment property portfolio.
For investors contemplating the fix-and-flip model of real estate investing, one of the initial decisions that you will have to make is the type of funding to use to acquire and renovate the property. One of the most ideal financing options are private money loans. The following is a quick overview of private money real estate loans, the potential pros and cons of utilizing this type of funding and what types of transactions are best suited for this approach.
Private Money Loan Basics
Committing to a real estate investment is a potentially lucrative endeavor and can present a viable approach to accruing generational wealth, round out your collective investment portfolio and earn passive income. Private money loans, also referred to as “hard money” or “bridge” loans, are relatively short-term lending instruments that investors can leverage to cover the costs associated with acquiring and renovating properties for a profit. Private money loans are sourced from pools of private investors as opposed to banks or credit unions that generally extend conventional mortgages.
In contrast to bank loans, real estate investors can obtain the capital they need from private money lenders without having spotless credit scores or substantial amounts of cash reserves. Instead, private lenders concentrate on the value of the underlying property asset—which is also used to collateralize the loan itself. More specifically, private lenders premise the amount they can lend to a borrower on the ‘after repair value’ or ‘ARV’, which is an estimation of the property’s value after the completion of the rehab or development stage of the project. ARV is calculated by referencing local comparable properties sold in recent history to the subject asset (also called ‘comps’) that are closely relatable in terms of condition, year built, square footage, style and build.
Benefits of Private Money Loans
There are several potential advantages for using a private money loan to fuel real estate investment transactions instead of conventional financing options. Here are a few of the main upsides private money has to offer:
- Efficiency: The application process for conventional financing through banks is a lengthy and involved process, partially due to recent regulations implemented in the mortgage industry associated with the Dodd-Frank Act. Traditional loans can take months to close, a delay which could jeopardize potential deals in a competitive market. Alternatively, private money loans can disburse funds in a matter of days or weeks. That’s a significant plus if you’re planning a big development transaction and need to complete the project on time to remain within your budget.
- Flexibility: Because private money lenders are not restricted by excessive regulatory measures, they have more freedom to negotiate with borrowers and develop innovative funding solutions that fit their financial needs. They may be able to adjust repayment schedules or reduce origination fees as part of the relatively short underwriting process.
- Collateral: Private money loans are typically secured by the property being acquired—but lenders may afford borrowers some leeway in this aspect of the loan as well. For example, some lenders permit investors to secure the loan using their personal assets such as with retirement funds or their primary residences.
The Time is Now
Private money real estate loans are an ideal option for investors looking to obtain funding quickly without having to navigate the complex approval process associated with conventional financing. Coastal Capital Funding adopts a client-focused approach specifically designed to deliver innovative and efficient funding solutions that are individually tailored to fit each and every one of your needs. We have years of experience in assisting successful investors reach their goals—contact us today to learn how we can do the same for you!
They say Virginia is for lovers, and there is definitely plenty to love for aspiring real estate investors—especially those concentrating on AirBnb and rental properties. Ideally situated in the Mid-Atlantic, Virginia is close to just about everything: from the employment hub of Washington D.C. to the sandy beaches of the Chesapeake Bay. Whether you’re in search for vibrant urban cities, quaint mountain towns or historical attractions, Virginia certainly has something to offer all lifestyles. Being one of the 13 initial colonies, the federal government has for centuries had a significant influence on the local economy that continues to present day—particularly in neighborhoods close to the nation’s capital, the headquarters of the Central Intelligence Agency and the Pentagon. There is a steady stream of residents choosing to relocate to Virginia, and the most popular demographic are young professionals seeking job opportunities in D.C.
All of these factors make Virginia a perfect market for real estate investors. The state plays hosts to multiple professional sports teams, has world-class event venues and idyllic natural attractions that make the area a sought after destination for conferences, games, concerts and vacations—all of which draw a steady stream of viable tenants seeking flexible housing options for short- to longer-term stays. Real estate investors should take note of the following cities in Virginia where the market is primed to acquire reliable revenue-generating assets for rental properties.
It’s obvious by the city’s name that it’s primary draw is the ocean and all the fun-filled activities that go along with it—but you would be remiss to assume that the sand and the sun is all that Virginia Beach has to offer. The area boasts a plethora of distinctive neighborhoods and communities each with their own unique culture and lifestyle. Virginia Beach is the most populous in the state, with around 425,000. Despite its considerable size, the city is extremely family-oriented and safe, with its own lively town center, an active art and music scene and many award-winning restaurants. With three major military installations, a booming agricultural market and booming tourism offerings, the local economy is strong and resilient—attracting educated millennials in droves that move to the city in search of the perfect blend of social and economic opportunity that the area is known for. Based on current market data, landlords can anticipate 26 leads and under two weeks on the rental market, meaning that properties will not sit vacant for long. Property values are appreciating at an above-average 3.9% annually and the average two-bedroom unit can be rented for around $1200 a month.
Whether you say “Nor-folk” or choose to blend in with the locals by saying “Naw-Folk,” there’s one thing that’s not up for debate: if you love living by the water, Norfolk is the place for you! With the Chesapeake Bay, Atlantic Ocean and several rivers surrounding the city, it is the perfect location for outdoor lovers seeking a prime location for sailing, watersports and all-around coastal living. The picturesque community has been designated as an official Tree City with sprawling displays of trees and flowers enhancing the many historic and beautiful residential areas. In addition to having a vibrant downtown area and serving as the headquarters for NATO forces, Norfolk is also home to the biggest naval base on the planet and has two major universities in Old Dominion University and Norfolk State University. Collectively, these are all positive qualities for investors as students and military members alike are constantly on the hunt for affordable living accommodations. Norfolk real estate investors can expect an average of 39 leads and just 16 days on the rental market before their home is occupied at a premium rate optimizing return on investment.
The majority of neighborhoods comprising Richmond have high rental demand that offers investors the potential for reliable passive income for the foreseeable future. Certain locations within the Richmond area exhibit increased demand due to their proximity to colleges and notable regional employers such as Virginia Commonwealth University, the University of Richmond and the Medical College of Virginia. Accordingly, investors should focus their property searches in and around the iconic Fan and Museum Districts as well as Oregon Hill, Monroe Ward and Shockoe Bottom. As the state capital of Virginia featuring a vibrant social scene and healthy, diverse local economy, investors would be well-advised to put Richmond at the top of the list when it comes to viable investment markets.
With the largest concentration of military personnel outside of the Pentagon, with over 86,000 active-duty personnel stationed in the immediate area representing all branches of the Armed Forces, Chesapeake is a regional epicenter of economic activity and stability. Due to the high concentration of military members, a recent market analysis conducted by Realtor.com indicates that the Chesapeake housing market has the lowest median down payment in the country as service members typically take advantage of the VA Loan program. This increases potential homebuyers’ buying power and contributes to an active real estate marketplace—which is great news for real estate investors. With a constant stream of service members relocating to the area there will always be a high demand for housing options, meaning your rental property will not sit vacant for long.
Newport News’ ideal location just minutes from Williamsburg and a short drive to Virginia Beach makes it an in-demand area for potential homebuyers and renters alike. Add to that a nationally-recognized school system—which have been recognized by Newsweek as the top 5% collectively in the country—and a local government renowned for its commitment to sustainable environmental practices like reducing collective energy usage and incentivizing residents to be more environmentally conscious, and you have an ideal real estate investment market. Investors should start their investment property search in the newly revamped Center City neighborhood that is the heart of downtown and boasts profitable businesses, restaurants and brand-new residential properties that is sure to draw prospective buyers looking for housing options.
The Capital You Need, When You Need It
With 30 years of industry experience, Coastal Capital Funding has a proven track record of success partnering with real estate investors, landlords and new home builders throughout the Hampton Roads region and across the country. In an increasingly competitive market, it’s now more important than ever to have efficient access to flexible financing options so you can capitalize on emerging opportunities. With a comprehensive suite of customizable loan programs specifically geared towards real estate investors and a streamlined underwriting process with no unnecessary red tape, Coastal Capital Financing is the logical choice when it comes to private lenders. Contact us today to learn more about how we’ll take your investment business to the next level.