Imagine you've run into this truly good bargain on a fix and flip property in a terrific location, and you're either an experienced real estate investor or a newbie who is looking to try out flipping houses. You may have heard that competent home flippers, such as the husband and wife on HGTV's Flip or Flop, have an impressive average return near $40,000 – $50,000. And sure, they are aided in a major way as a result of their professional know-how, auction abilities and understanding of hard money loans. Still, your rehab and renovation knowledge isn't that bad either — besides, you have already located a good contractor to handle this job.
But how exactly do real estate investors find funding? If you opt for a regular bank loan, you will end up waiting roughly 4-8 weeks up until the mortgage loan is approved and the money is ready. Since most sellers would rather have a fast closing, you may want to begin searching for additional funding alternatives.
To add to it, banks have been tightening up their lending requirements as of late, which makes it challenging for people to receive a traditional home loan if their credit rating is not flawless or he doesn't have a consistent salaried profession. So does this leave you with no option, but to abandon your aspiration of getting into home flipping? Not at all, especially while Florida hard money loans will assist you to achieve great things in the real estate market.
A hard money home loan in Florida provides what's possibly most desired by real estate investors — a fast closing time period of as little as fourteen days. Further, loans can be made up to 70% loan-to-value of the as-is value, as determined by a professional appraiser. At first glance, hard money real estate loans, with starting lending rates of 10%, appear to be more expensive than bank financing. But the time frames of these loans are much shorter, making the interest rate far less important. Short-term loans of several months to a few years are best understood in terms of cost of capital, the same as all other costs involved with a project. Right after you rehab and unload the house, recuperating this expense is no different than recovering the cost of the home appliances you put in the place.
Apart from this, hard money mortgages are not difficult to qualify for, regardless if you posses a bad credit rating. Rather than focusing entirely on the borrower's credit score or source of income, Florida hard money lenders, who could be a privately owned company or an individual person, say yes to a loan after analyzing the property value, its salability, its location, and the possibility of recovering their money in case of foreclosure. The amount that an applicant can put down beforehand towards the property, his real estate experience, and price range of comparative properties in the area are other details that go into establishing a person's eligibility for a hard money real estate loan.
Searching for a hard money lender in Florida to fund your fix and flip endeavor is not very challenging, assuming that the opportunity before you is promising and boasts the right potential for returns. Fill out the contact form on this page or call us to discuss the property you have in mind.