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If you are looking for fixing and flipping homes as your profession, the very first thing you need to consider is the money. You cannot get into this business without enough money to purchase and sell them after the required renovation. Fix and flip loans provide the great way to get success in the real estate investment.

Fix and Flip Loans

Fix and Flip Loans

Good hard money lenders make it easy to buy a property, fix it and sell it for a profit. Here, we will talk about four types of fix and flip loans that help to become a professional property flipper.

Hard Money Loans and Private Money Loans

These two loan options give the best solution for borrowers with a bad credit history. They both work in the same manner. The only difference – hard money lender is a small group of investors while private money lender is a single investor who gives a loan to the flippers.

Hard money loans and private money loans give more importance to property’s potential value instead of borrower’s credit score. The lenders have their own qualification requirements and guidelines. These fix and flip loans have generally 6-36 month loan terms with 8-16% interest rates.

Private money loans are little cheaper than hard money loans as you can negotiate 1-5% fee of the sale price with private lenders.

For the best hard money lender, you can choose LendMe as the leading hard money lender that focuses on helping real estate fixers and flippers with best loan service.

Bank Financing

You must have minimum 2 years of experience in fixing and flipping business as banks do not offer loan to the inexperienced borrowers. You must have registered flipping homes business to become illegible for bank financing.

Banks do not provide as much loan money as hard money and private money lenders. Therefore, you have to make arrangement for some amount of finance from other sources. Bank financing takes around 1-3 months to secure. It has 5-6% interest rates; therefore, taking loan from a bank is the cheapest way of arranging capital for flipping houses. Some banks may ask for small upfront fees

Banks offer a flexible and secured line of credit that allows you not to pay interest on unused money.

Real Estate Crowdfunding Loans

It is the fastest fix and flip loans option that takes only 3-5 business days to get approved. Real estate crowdfunding is done through various online platforms. These platforms help investors to get connected with borrowers who are looking for taking money for flipping houses.

Only experienced flippers are eligible for real estate crowdfunding loans. It means you must have minimum one profitable house flip to be qualified for such loans. It also considers your credit score and personal finances history.

Its loan terms are about 6-12 months with 8-14% interest rate and 2-3% origination fee which is really higher than other types of fix and flip loans.

No doubt house flipping is an emerging business, but the first time flippers have to depend on either hard money loans or private money loans to get started.

To be successful in the fix and flip loans, you are recommended to take help of LendMe as the best service provider in California.

 

Types of Fix and Flip Loans for Profitable Real Estate Investment