May 19, 2021

Fix and Flip Loans: How to Get Started

Remove term: fix and flip loans fix and flip loans

Since 2017, house flipping has become a popular income generating scheme.  A rise in home prices and the availability of fix and flip loans has made flipping easier than ever before. House flippers have had higher profits since the 2008-2009 housing crisis when foreclosures became prevalent.

How much would flipping homes cost?

“Flipping houses” which essentially means the buying, fixing, and re-selling of property, has become very profitable.Although appealing, one must remember that it takes more capital or money than the straightforward building of a house. Funds would be required to first buy the property, and then there is a need for renovations or rehabilitation. The property taxes, homeowner’s association fees, insurance and utility payments should also be considered.

A person determined to invest in this kind of venture should be prepared for the costs.  Loans are much harder to get nowadays since fix and flip ventures are considered a risky proposition. Lenders might not also work with first time flippers. They want to see some track record, and should a loan offer be extended, this would have higher fees and interest.

What are Fix and Flip Loans?

Fix and flip loans are real estate short-term loans that are designed for fund investors to purchase property then renovate this for the purpose of re-selling at a profit. This short-term loan generally is from 12 to 18 months. Many investors resort to the more conventional loans or credit to finance such venture, but flip and fix loans are hard money loans from private or individual lenders.

These kinds of loans are often used to buy residential properties at auctions or foreclosures, to do rehabilitation and upgrades, and to cover incidental expenses that are associated with property acquisition.

Benefits of Fix and Flip Loans

The advantages of a hard money fix and flip loans cannot be overstated. To mention the main benefits:

  1. Flexible terms

Fix and flip loans from private lenders do not have the same rigid requirements and processes like traditional banking loans. Borrowers who cannot qualify for bank loans can still obtain loans from a hard money lender.

2. Fast funds

Investors who bid on auctions or foreclosures need to have immediate funds. Traditional loans usually take 30 days to process. Hard money fix and flip loans can provide a loan within a week.

3. Less risk

Traditional loans are backed by personal credit and other collaterals. A hard money fix and flip loan is backed by the property acquired by such loan.

How to Get Started with Fix and Flip Loans

First, find a reliable lender with a good track record. A strong financial partner is essential for this type of venture.

Ask from other flippers about lenders – How fast was the turnaround time? What kind of interest did they have? Is the lender responsive?  It is best to get references and call for further inquiry.

Hard money lenders decide by evaluating how good the deal is and the reliability of flipper. If the purchase and rehabilitation costs against the resell value are sound and the flipper is trustworthy, a hard money fix and flip loan will be granted.

For those flipping for the first time, start by studying the market and how to estimate costs.

When looking for financing for the next flip, it would be a surprise to know that a hard money fix and flop loan is a much faster process than the traditional bank credit. There are nation-wide lenders but a local one is the best option.

A hard money fix and flip lender will hold the lien of the property until the borrower fully pays the loan. However, the borrower will have full rights to the property and will hold the deed.

Looking for a hard money fix and flip lender?

United Fund Investments can provide the hard money fix and flip loans. Please visit our website, for more information.


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