Fixing and flipping is a big endeavor, when you feel as though you are ready to to undertake the project, funding will be can be one of your main concerns. On top of buying the home, even if its a decent price, lots of other fees can arise! The obvious repairs contractor, listing and broker fees for when you are ready to sell the home, and lastly should issues arise during your flip, the potential holding costs until you can sell the home. Don’t let the fear of being unable to finance a project cripple your motivation, we have a couple of creative and practical funding options that you should consider before walking away!
Hard Money/ Private Money Loan – This type of loan is good for both experienced and inexperienced fix and flippers who need access to funds rapidly. However, interest rates on these types of loans are typically higher than the average residential real estate loans, reason being is that they tend to be a higher risk and shorter duration of the loan. Most hard money loans are used for projects like fix and flips that only last few months.
Cash Out Refinance – This type of loan is great for experienced fix and flippers, who have built up significant equity over the course of the years. This loan will often times have a lower interest rates, this is a more stable loan and if you qualify can be a great option to satisfy your flipping needs.
The above are only a couple of way in which you could finance a project, and they are by no means the only way. It is up to you decide which funding option is best for you and your financial needs. While financing a project is something to consider, it doesn’t have to be a hindrance.