4 Tips for Flipping Houses in California
California has proven to be a competitive buyer’s market despite high costs of living and expensive real estate prices. In 2021, home prices in California increased by 2.6%, making the median home value approximately $548,700.
While real estate prices fluctuate over time and are dependent on location, the market could continue to spell opportunity for real estate investors. Here are some other points to consider:
- Livability — Despite California’s cost of living, people from all over the world continue to flock to the Golden State due to its excellent weather, diverse landscape, robust industries, and cosmopolitan atmosphere.
- Loan Landscape — California’s median home prices are more than double the national average. That means that many lenders are okay with adjusting their rates and providing larger loan limits relative to other states.
- Foreclosure Discounts — California has lifted its moratorium on foreclosure, allowing real estate investors to scoop up discounted properties throughout the state.
Real estate investors considering flipping houses in California should understand that markets vary from region to region. San Diego is a world away from San Francisco, and investors should consider that each city has different geography, culture, population, access to public transportation, etc.
You will have to study the market you choose, but to get you started, here are 4 tips for flipping houses in California.
Seek Out Houses in the REO Properties Category
Four of the top ten cities with the most expensive real estate in the United States are located in California. Reviewing a real estate-owned properties (REO) list will help you discover more affordable properties that have been obtained by lenders due to borrowers defaulting on their mortgages. Fortunately, California has the third highest number of REO properties in the US, providing you plenty of opportunity to find an affordable house to flip.
Build a Strong Brand
As a real estate investor in California, you will have a lot of competition. That makes it ever more important to separate yourself from the herd by establishing a unique and trusted brand. You’ll want to attend networking events, look up your local Real Estate Investor Association (REIA), become active on social media, and have your business cards ready at any real estate auction you attend.
Curate a Shortlist of Obtainable Options
California is the third-largest state in the US. That’s great because it means you will have plenty of excellent opportunities for house flipping, but it’s important not to fall victim to analysis paralysis. Many of the options will be too expensive, or located in areas where your talents can’t be maximized. It’s important to create a list of criteria before you begin your search in order to narrow your options and focus on properties that are both obtainable and potentially profitable.
Secure Funding Quickly for Your Project
Flipping houses is an expensive business. Once you’ve narrowed your search to a property that has the potential to earn a profit, you’ll have to secure enough funds to purchase the property and renovate it.
The interest rates that come with renovation loans make borrowing expensive, but most real estate investors don’t have the cash on hand to purchase a property outright, especially in California. Additionally, if you are looking for a fixer upper, chances are the property you buy will be distressed and won’t meet the standards for a traditional bank loan from a financial institution. Even if this is not the case, it can be difficult to secure funds quickly for renovations.
When you are purchasing a home at a foreclosure sale, or searching for a distressed property, you can’t rely on a traditional loan. For these reasons, real estate investors should consider hard money loans or bridge loans. These loans are relatively easy to obtain because the purchased asset is used as collateral and is the main underwriting factor for the loan, meaning that the private lender is taking on less risk.
Wilshire Quinn specializes in funding hard money loans and bridge loans quickly. While we work in the commercial and non-owner occupied residential real estate lending space nationwide, our headquarters are in San Diego, with satellite offices in San Francisco, and Los Angeles. California is our home, and it’s a market we know well. Contact us to speak with a loan representative about hard money loans and bridge loans for your next project.
- Funding typically in 5-7 business days
Loan Amounts from $200,000 to $20,000,000
- Interest Rates from 8% to 10.5%
Loan Term: 3 – 24 months
Commercial & Residential (non-owner occupied) Real Estate
- Purchase, Refinance, Cash-out Refinance, Rehab, Blanket Loans
Foreign National Loans Available
Loans are made or arranged by Wilshire Quinn Income Fund, LLC (the “Fund”) pursuant to California Finance Lenders Law license #603J060. The information contained in this message is for informational purposes only and is meant to provide general background information on the Fund and its manager, Wilshire Quinn Capital, Inc. (the “Manager”). Any and all information herein is deemed reliable but is not guaranteed.
About Wilshire Quinn
Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.
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