Benefits of NBN for the Real Estate Industry

In the post-NBN era there would be very few, if any, parts of the Australian landmass outside the connectivity paradigm and therefore usher in complete digital transformation.

Some of the key benefits to accrue for the real estate sector, in the post-NBN era can be enumerated as given below:

Improvement in Consumer Connect: NBN will allow for consumers to remain connected with their real estate agents irrespective of where they are. Agencies can ensure that agents out in the field are still connected to the clients and vice versa. This creates a seamless consumer connect and improves consumer rapport.

Improvement in Information Dissemination: NBN will allow for high speed transmission of data (voice, audio & video) thereby allowing for better virtual tours and visual depiction of properties. Visual information has a much better impact on consumers and aids increased conversion rates.

Improvement in Transaction Closures: Real Estate transactions are now increasingly being closed online. The NBN-era will give further fuel to this trend as consumers no longer need to physically visit properties before giving their nod. As more and more transactions move online, there is an improving trend in transaction closures.

Improvement in Customer Confidence: The NBN-era will usher in a phase where all land records, property documents and ownership information is available and exchanged online. This eliminates the risk of fraudulent transactions and thereby helps improve consumer confidence.

Improvement in Industry Outlook: Overall, the NBN era will help the real estate industry as a whole by improving bottom-lines, increasing sales and decreasing the cost of sale. With digital impetus agencies can deploy online advertising that is more cost effective, achieves better returns on investments, and has a lower entry-barrier even for smaller real estate firms to enter and compete with the more established firms.

Looking much further ahead, the NBN will bring about a new phase of virtual reality and wearable technologies. While the immediate impact of these might not be huge in the real estate space, developers are already looking at some exciting possibilities in the not so distant future.

In the words of Jon Brouchoud, founder of Arch Virtual, specialists in creating 3D environments for virtual and augmented reality, “It is absolutely mind boggling to visit these spaces virtually. It gives you a sense of presence, and a deep understanding of what that space is really like in a way that photos or a website simply cannot convey. I think we’ll start to see a rapidly increasing number of agencies adopting this technology in the next 2 to 3 years, we’re already seeing a lot of early innovation today, and in 5 years, it will be commonplace.”

The 4 Benefits of Fix and Flip Loans

Buying a real estate property, repairing and selling it quickly tends to be a profitable recipe. However, a key component of this recipe to success is access to capital. If one does not have sufficient funds but is interested in rehabbing a property, a hard money lender who offers a fix and flip loans could be a great financing option. These loans are structured in such a way that allow a purchaser to quickly acquire the property and have access to a reserve of funds for construction and renovation costs.

Buying a real estate property, repairing and selling it quickly tends to be a profitable recipe.

Advantages of Fix and Flip Loans

There are many advantages to fix and flip loans and the demand for this source of funding is steadily increasing in the real estate investment industry.

Four key benefits include:

  • Quick Approval: Getting approved for a fix and flip loan is a far quicker process when compared against the traditional banking system. If the borrower has submitted the requested documents, a private lender can approve the loan within a couple of days whereas a traditional financial institution can take at least a month. In addition to the significant longer wait time for bank loan approvals, the borrower will be required to submit numerous documents and clear multiple conditions as part of the process.
  • Any Property: Properties in varying states of the condition can qualify for a fix and flip loans. Whether the property is bank owned, a short sale, a foreclosure, or in a dilapidated state, a borrower is still likely to find a hard money lender willing to fund the deal. Once again, a borrower may not have the option of funding these types of real estate opportunities with a bank. Banks are very risk averse and have strict rules in place as to what type of property they can accept as part of their loan portfolio.
  • Zero Prepayment Penalties: If you take out a loan from an established bank, you may be hit with penalties should you have the opportunity to pay the loan off before the maturation date. This is called a prepayment penalty. Most fix and flip lenders will not subject you to this fee.
  • Repairs Covered: When you buy a property with the intention to flip it, a significant portion of your budget will be spent on construction and renovation costs. A fix and flip lender will usually set up a loan reserve which will cover repair costs of the property in addition to interest. This can alleviate a lot of stress and pressure for builders and developers since they don’t have to worry about spending money out of pocket for repairs or payments.

Teaming up with a solid lender who understands your property, the local real estate market, and is willing to help you throughout the acquisition, construction and selling process is vital. When choosing a hard money lender, keep the following in mind:

  • The lender must have sufficient experience in the industry. A private lender that has deep roots in the real estate investment market will not only be able to offer you a better deal but will also have numerous contacts that will prove helpful along the way – from recommended settlement companies, to permit expeditors and other preferred vendors. This can prove to be a great asset as speed, quality and efficiency is the name of the game in the fix and flip world. The less time you need to spend vetting companies and contractors is more money in your pocket.
  • Check the history of the lenders to ensure that they are genuine and have a good track record. It may be worth taking a closer look at lenders that tempt borrowers with “teaser rates” or a “no documents” underwriting process. As with most things in life, if it seems too good to be true – it usually is.
  • Finally, you should check out what previous or current customers have to say. Is the lender responsive and knowledgeable? How many loans do they have on the street? Do they have good ratings on Google or the BBB? Just as the lender performs due diligence on their borrowers, the borrowers should, in turn, conduct due diligence on the hard money lender. It’s a partnership and both parties need to be solid and committed to the process in order to ensure success.