Stay Ahead of Your Real Estate Investments House flipping loans are the common name we give to real estate investment loans for renovating distressed properties and resell at a profit, in a short amount of time. In the past, real estate investors were usually the ones performing this activity. Today, however, many people have realized the leverage available in this type of real estate investment, and they are becoming more popular than ever. To be successful with house flipping loans, you should follow these simple tips:
- Get Pre-Approved for a loan first.
- Do your research on the property, value, and intended renovations.
- Select a property that practically sells itself.
- Stay organized and on schedule throughout the renovation process.
- Sell the house at the best price where you can make a profit.
What are House Flipping Loans?A house flipping loan gives investors access to cash so that they can purchase distressed investment properties for the explicit purpose of fast rehab and resale. These types of loans can usually be funded very quickly, within 72 hours. Usually, when investing in a real estate property for fixing and flipping, you have to act quickly to get the property you want, or someone else may get it. We can close hard money house flipping loans in about ten days. These types of loans are only available for adequately collateralized loans for single-family residential houses or other real estate properties, including commercial properties.
What are the Interest Rates?Interest rates for these types of loans are higher than traditional mortgages. This is because our house flipping loans are not based on your creditworthiness. In most cases, hard money loans are for the express purpose of purchasing properties that will be fixed and flipped for a profit within a short amount of time. In these cases, the interest rates do not affect the profitability of the real estate project.
How Long are Loans For?Typically hard money loans are for 3-12 months. This is approximately the time needed for most real estate investors to fix and flip a property to see a profit. The short term of these loans makes them easier to obtain with less red tape than in traditional mortgages.
Can You Borrow Money for Repairs?Yes, in almost every case a hard money loan carries a provision for draws for repairs. Of course, this requires 3rd party inspection and valuation, as well as accurate documentation. Overall, however, its a small price to pay for access to a ready rehab cashflow.
Does Credit Matter?Although hard money loans are popular because they are not entirely dependent on your credit, credit is checked as part of the hard money loan process. Lenders do want to identify if the borrower has had bankruptcies or other major financial setbacks in the recent past. Hard money loans are collateral based, but the lender does want to prove ability to pay back by checking credit history.
Are There Down Payments?Yes, lenders need to see that borrowers can afford to pay closing costs. If a borrower cannot afford to pay closing costs then chances are they cannot afford to take out this type of loan and pay it back. Expect to pay all origination and discount points and other costs before closing.
Are House Flipping Loans Better than Traditional Mortgages?It is hard to compare a traditional mortgage to a hard money loan. These are two very different types of products for two very different types of goals. You use house flipping loans for a quick turnaround profit once you fix and flip a property with repairs. Traditional loans are for long term holding situations where you use the property either as a residence or for long term renting purposes.
Get Your House Flipping Loans TodayIf you’re ready to get the loans you need for your property, contact Noble Mortgage & Investments today! Call us now at [phone number=””] to discuss your financing needs. Or pre-qualify for your loans online! Start on your real estate investment journey today!
House Flipping Loans—What You Need to Know | Noble Money, TX]]>