Ultimate Lauderdale County Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. BRRRR is a strategy for repeated expansion. It is essential that you be able to obtain a “cash-out” mortgage refinance for the strategy to work.

When you have finished fixing the home, its market value has to be higher than your total purchase and renovation spendings. After that, you take the value you created from the investment property in a “cash-out” mortgage refinance. You utilize that money to get another home and the operation begins anew. You add appreciating investment assets to the portfolio and lease revenue to your cash flow.

When your investment real estate collection is large enough, you might outsource its management and collect passive cash flow. Find the best property management companies in Lauderdale County MS by using our directory.

Factors to Consider

Population Growth

The increase or decrease of the population can tell you whether that area is interesting to landlords. If you find vibrant population increase, you can be confident that the area is drawing likely tenants to the location. Employers consider this community as promising place to situate their enterprise, and for employees to situate their families. An expanding population develops a stable base of renters who can stay current with rent raises, and a strong property seller’s market if you want to liquidate any assets.

Property Taxes

Real estate taxes, maintenance, and insurance spendings are investigated by long-term lease investors for determining expenses to estimate if and how the project will be successful. Rental property located in steep property tax areas will have lower returns. Steep property taxes may signal a fluctuating region where costs can continue to rise and should be thought of as a warning.

Price to Rent Ratio

The price to rent ratio (p/r) is a signal of how much rent can be collected compared to the acquisition price of the property. The price you can charge in a location will affect the amount you are able to pay depending on the number of years it will take to repay those costs. You want to discover a lower p/r to be comfortable that you can set your rents high enough to reach good profits.

Median Gross Rents

Median gross rents are an accurate barometer of the approval of a lease market under examination. Look for a continuous expansion in median rents during a few years. If rental rates are declining, you can scratch that area from discussion.

Median Population Age

Median population age will be similar to the age of a usual worker if a region has a strong source of renters. You’ll find this to be accurate in communities where workers are moving. If you discover a high median age, your supply of tenants is becoming smaller. A vibrant investing environment can’t be supported by retired individuals.

Employment Base Diversity

Accommodating diverse employers in the city makes the market less volatile. If there are only a couple major employers, and either of such moves or disappears, it can lead you to lose paying customers and your real estate market worth to drop.

Unemployment Rate

You won’t be able to reap the benefits of a secure rental cash flow in a region with high unemployment. Out-of-job residents stop being customers of yours and of other companies, which produces a ripple effect throughout the city. The still employed workers may discover their own incomes reduced. Remaining renters might delay their rent payments in these conditions.

Income Rates

Median household and per capita income will let you know if the tenants that you require are residing in the area. Your investment research will include rental fees and property appreciation, which will rely on wage raise in the city.

Number of New Jobs Created

An increasing job market results in a consistent stream of tenants. Additional jobs equal a higher number of renters. This allows you to buy additional rental properties and replenish current unoccupied properties.

School Ratings

Local schools will cause a significant influence on the property market in their locality. Businesses that are thinking about relocating require good schools for their employees. Business relocation creates more tenants. Homebuyers who come to the community have a beneficial impact on home values. Quality schools are a necessary ingredient for a vibrant property investment market.

Property Appreciation Rates

The essence of a long-term investment strategy is to keep the property. Investing in real estate that you aim to maintain without being certain that they will rise in value is a recipe for failure. Small or declining property appreciation rates should remove a region from the selection.

A short-term rental is a furnished unit where a tenant lives for shorter than one month. Long-term rental units, such as apartments, impose lower rental rates per night than short-term rentals. With tenants coming and going, short-term rentals have to be maintained and cleaned on a regular basis.

Short-term rentals serve individuals traveling for business who are in town for several days, those who are migrating and want temporary housing, and tourists. Anyone can turn their home into a short-term rental with the know-how offered by virtual home-sharing websites like VRBO and AirBnB. A convenient approach to get into real estate investing is to rent a residential property you currently keep for short terms.

Short-term rental properties require dealing with occupants more frequently than long-term rental units. Because of this, owners deal with issues regularly. Think about protecting yourself and your properties by joining one of real estate law firms in Lauderdale County MS to your team of professionals.

Factors to Consider

Short-Term Rental Income

You have to decide how much revenue needs to be generated to make your investment lucrative. A market’s short-term rental income rates will promptly tell you if you can expect to achieve your estimated income figures.

Median Property Prices

Meticulously calculate the amount that you are able to spare for additional real estate. The median market worth of property will show you if you can manage to participate in that city. You can narrow your property search by evaluating median prices in the community’s sub-markets.

Price Per Square Foot

Price per sq ft can be affected even by the style and layout of residential units. A house with open entrances and high ceilings cannot be contrasted with a traditional-style residential unit with greater floor space. It can be a fast way to gauge several neighborhoods or buildings.

Short-Term Rental Occupancy Rate

The ratio of short-term rentals that are presently rented in a location is vital knowledge for a future rental property owner. An area that requires new rental properties will have a high occupancy level. If investors in the area are having challenges renting their existing units, you will have difficulty filling yours.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return can tell you if the investment is a practical use of your cash. Take your estimated Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The percentage you get is your cash-on-cash return. If an investment is high-paying enough to recoup the investment budget fast, you will receive a high percentage. If you take a loan for part of the investment and use less of your money, you will see a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Average short-term rental capitalization (cap) rates are largely employed by real estate investors to calculate the market value of rental properties. High cap rates show that income-producing assets are accessible in that market for decent prices. When investment properties in a market have low cap rates, they typically will cost too much. Divide your estimated Net Operating Income (NOI) by the investment property’s value or purchase price. The result is the yearly return in a percentage.

Local Attractions

Short-term renters are commonly travellers who come to a location to attend a recurrent major event or visit unique locations. When a region has places that annually hold exciting events, such as sports arenas, universities or colleges, entertainment centers, and theme parks, it can draw people from outside the area on a recurring basis. Famous vacation attractions are located in mountain and coastal points, along waterways, and national or state nature reserves.

To fix and flip real estate, you need to get it for below market price, complete any needed repairs and improvements, then liquidate it for higher market price. The essentials to a profitable fix and flip are to pay less for the home than its actual worth and to precisely determine the budget you need to make it marketable.

Analyze the prices so that you know the actual After Repair Value (ARV). Look for a region with a low average Days On Market (DOM) indicator. As a “house flipper”, you’ll have to put up for sale the repaired home immediately so you can eliminate carrying ongoing costs that will lessen your profits.

In order that home sellers who have to sell their house can conveniently discover you, showcase your availability by utilizing our directory of the best cash real estate buyers in Lauderdale County MS along with the best real estate investors in Lauderdale County MS.

Also, search for the best bird dogs for real estate investors in Lauderdale County MS. Experts in our catalogue specialize in procuring desirable investments while they are still under the radar.

Factors to Consider

Median Home Price

When you look for a profitable area for house flipping, check the median house price in the community. You’re looking for median prices that are modest enough to indicate investment possibilities in the city. This is a key element of a cost-effective fix and flip.

If you notice a fast decrease in home market values, this may mean that there are conceivably properties in the market that will work for a short sale. You will learn about potential investments when you partner up with Lauderdale County short sale processing companies. You’ll learn additional information concerning short sales in our extensive blog post ⁠— How to Buy a Home that Is a Short Sale?.

Property Appreciation Rate

Are property market values in the area going up, or moving down? You’re eyeing for a steady increase of local home market values. Housing market values in the market should be growing consistently, not quickly. Purchasing at a bad period in an unstable market condition can be problematic.

Average Renovation Costs

Look closely at the potential renovation expenses so you will understand if you can reach your targets. Other spendings, such as permits, could shoot up your budget, and time which may also develop into additional disbursement. You need to know if you will have to use other contractors, such as architects or engineers, so you can be prepared for those expenses.

Population Growth

Population statistics will tell you if there is an expanding need for real estate that you can produce. When the number of citizens isn’t expanding, there is not going to be a sufficient source of homebuyers for your properties.

Median Population Age

The median residents’ age will also tell you if there are qualified homebuyers in the community. When the median age is equal to that of the usual worker, it’s a positive sign. People in the local workforce are the most steady house buyers. People who are about to depart the workforce or are retired have very restrictive housing requirements.

Unemployment Rate

You aim to see a low unemployment level in your potential region. The unemployment rate in a future investment region needs to be lower than the national average. When the city’s unemployment rate is less than the state average, that’s an indication of a good investing environment. Unemployed individuals won’t be able to purchase your real estate.

Income Rates

Median household and per capita income amounts show you whether you will see enough home purchasers in that community for your houses. When families buy a property, they typically need to obtain financing for the purchase. Their income will dictate how much they can borrow and if they can purchase a home. Median income can help you analyze if the standard homebuyer can afford the homes you intend to list. In particular, income growth is important if you need to scale your investment business. Building costs and home purchase prices rise over time, and you need to be sure that your target purchasers’ wages will also get higher.

Number of New Jobs Created

The number of employment positions created on a steady basis shows whether salary and population increase are viable. More citizens acquire houses if the local economy is adding new jobs. With more jobs created, new potential homebuyers also relocate to the city from other towns.

Hard Money Loan Rates

Short-term property investors regularly utilize hard money loans rather than typical loans. Hard money funds empower these investors to take advantage of hot investment possibilities without delay. Find real estate hard money lenders in Lauderdale County MS and analyze their rates.

People who are not experienced concerning hard money lenders can learn what they need to know with our article for newbies — What Is Private Money?.

As a real estate wholesaler, you sign a sale and purchase agreement to buy a property that other investors might be interested in. When an investor who wants the residential property is found, the purchase contract is assigned to the buyer for a fee. The property is bought by the real estate investor, not the wholesaler. The wholesaler doesn’t sell the property under contract itself — they only sell the rights to buy it.

This business requires utilizing a title company that’s experienced in the wholesale purchase and sale agreement assignment operation and is capable and predisposed to coordinate double close purchases. Find title companies that specialize in real estate property investments in Lauderdale County MS on our website.

Discover more about how wholesaling works from our comprehensive guide — Real Estate Wholesaling 101. While you conduct your wholesaling activities, put your name in HouseCashin’s list of Lauderdale County top investment property wholesalers. This will enable any desirable partners to find you and get in touch.

Factors to Consider

Median Home Prices

Median home prices in the market being considered will quickly inform you whether your investors’ target properties are positioned there. As investors want investment properties that are available for less than market value, you will have to find lower median prices as an implicit hint on the potential source of properties that you could acquire for below market price.

Accelerated deterioration in real estate values may result in a supply of houses with no equity that appeal to short sale flippers. This investment method often provides numerous unique benefits. But, be aware of the legal risks. Get additional information on how to wholesale a short sale home in our exhaustive instructions. Once you’ve determined to try wholesaling short sale homes, be certain to engage someone on the list of the best short sale lawyers in Lauderdale County MS and the best foreclosure lawyers in Lauderdale County MS to advise you.

Property Appreciation Rate

Median home value trends are also critical. Investors who plan to hold investment properties will need to find that housing purchase prices are steadily appreciating. Both long- and short-term investors will ignore a community where housing values are depreciating.

Population Growth

Population growth numbers are important for your proposed contract assignment purchasers. If they know the population is expanding, they will conclude that additional housing units are required. There are a lot of individuals who rent and more than enough clients who purchase real estate. A region with a dropping community will not interest the investors you want to buy your purchase contracts.

Median Population Age

A profitable residential real estate market for real estate investors is active in all areas, including tenants, who turn into home purchasers, who transition into larger properties. A region that has a huge employment market has a constant pool of renters and buyers. That’s why the city’s median age should be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income should be on the upswing in a friendly housing market that real estate investors prefer to work in. When tenants’ and home purchasers’ salaries are going up, they can handle surging rental rates and residential property purchase costs. That will be critical to the investors you want to draw.

Unemployment Rate

The region’s unemployment rates will be an important aspect for any targeted contracted house purchaser. Tenants in high unemployment places have a difficult time staying current with rent and some of them will stop making rent payments altogether. This negatively affects long-term investors who intend to rent their investment property. Renters cannot level up to homeownership and current owners can’t sell their property and move up to a larger house. This makes it challenging to find fix and flip real estate investors to acquire your purchase agreements.

Number of New Jobs Created

The frequency of jobs created yearly is a critical part of the housing framework. Additional jobs created result in an abundance of workers who look for houses to lease and purchase. This is beneficial for both short-term and long-term real estate investors whom you count on to acquire your contracted properties.

Average Renovation Costs

Improvement costs will be essential to many investors, as they normally purchase cheap distressed houses to rehab. The price, plus the costs of rehabbing, should reach a sum that is lower than the After Repair Value (ARV) of the property to ensure profit. Give preference to lower average renovation costs.

Investing in mortgage notes (loans) pays off when the loan can be bought for a lower amount than the remaining balance. The debtor makes future loan payments to the note investor who has become their current lender.

Loans that are being repaid on time are referred to as performing notes. They give you long-term passive income. Note investors also purchase non-performing mortgages that they either restructure to assist the debtor or foreclose on to get the collateral less than market worth.

Someday, you could have a lot of mortgage notes and need more time to service them without help. If this develops, you might choose from the best loan servicing companies in Lauderdale County MS which will designate you as a passive investor.

Should you choose to adopt this strategy, affix your business to our list of real estate note buying companies in Lauderdale County MS. Joining will make your business more visible to lenders providing lucrative opportunities to note investors like yourself.

Factors to consider

Foreclosure Rates

Note investors hunting for valuable loans to buy will want to uncover low foreclosure rates in the community. If the foreclosures happen too often, the area could nonetheless be profitable for non-performing note buyers. However, foreclosure rates that are high sometimes indicate an anemic real estate market where unloading a foreclosed home may be difficult.

Foreclosure Laws

Experienced mortgage note investors are completely well-versed in their state’s regulations for foreclosure. Many states utilize mortgage paperwork and some utilize Deeds of Trust. Lenders may need to receive the court’s approval to foreclose on a mortgage note’s collateral. You merely have to file a notice and initiate foreclosure steps if you’re using a Deed of Trust.

Mortgage Interest Rates

The interest rate is indicated in the mortgage notes that are bought by note investors. Your mortgage note investment return will be influenced by the mortgage interest rate. No matter which kind of note investor you are, the loan note’s interest rate will be crucial to your calculations.

Traditional lenders price different mortgage loan interest rates in various parts of the US. The stronger risk taken on by private lenders is reflected in bigger loan interest rates for their loans compared to traditional mortgage loans.

A mortgage loan note investor needs to know the private as well as conventional mortgage loan rates in their areas at any given time.

Demographics

A lucrative note investment strategy incorporates an examination of the community by using demographic data. It’s important to know if an adequate number of citizens in the city will continue to have reliable jobs and wages in the future.
Note investors who prefer performing mortgage notes search for regions where a high percentage of younger individuals maintain good-paying jobs.

Non-performing mortgage note buyers are reviewing comparable factors for different reasons. A strong regional economy is prescribed if they are to locate homebuyers for properties they’ve foreclosed on.

Property Values

As a note buyer, you should look for deals that have a comfortable amount of equity. When the value isn’t higher than the loan balance, and the lender wants to foreclose, the collateral might not sell for enough to payoff the loan. As loan payments decrease the balance owed, and the market value of the property goes up, the borrower’s equity goes up too.

Property Taxes

Most homeowners pay real estate taxes to lenders in monthly installments along with their mortgage loan payments. The mortgage lender passes on the payments to the Government to make sure they are submitted on time. If the homebuyer stops performing, unless the note holder takes care of the taxes, they won’t be paid on time. If a tax lien is put in place, it takes precedence over the lender’s note.

If a community has a record of increasing tax rates, the total house payments in that area are constantly increasing. Delinquent borrowers may not be able to keep up with growing loan payments and might interrupt making payments altogether.

Real Estate Market Strength

A growing real estate market showing good value growth is good for all types of note buyers. The investors can be confident that, if need be, a defaulted property can be liquidated for an amount that makes a profit.

A growing market can also be a potential area for initiating mortgage notes. This is a good source of income for successful investors.

A REIT, or Real Estate Investment Trust, is a company that invests in income-generating assets. Before REITs existed, real estate investing used to be too pricey for the majority of investors. The average person can afford to invest in a REIT.

REIT investing is known as passive investing. Investment risk is spread throughout a group of properties. Participants have the ability to liquidate their shares at any moment. One thing you can’t do with REIT shares is to select the investment assets. Their investment is limited to the real estate properties chosen by the REIT.

Real estate investment funds are basically mutual funds concentrating on real estate businesses, including REITs. The investment properties aren’t held by the fund — they’re possessed by the firms in which the fund invests. Investment funds may be a cost-effective way to incorporate real estate properties in your allotment of assets without unnecessary risks. Where REITs are meant to distribute dividends to its participants, funds don’t. The value of a fund to an investor is the projected growth of the price of the shares.

You can find a fund that specializes in a distinct type of real estate firm, such as multifamily, but you cannot choose the fund’s investment real estate properties or markets. As passive investors, fund shareholders are happy to allow the management team of the fund handle all investment selections.