Suppose you've stumbled upon this really great bargain on a fix and flip property you found in an ideal neighborhood, and you are either a seasoned real estate investor or a first-timer who wants to try his hand at flipping. Professional house flippers, much like the young couple on Flip or Flop, HGTV's reality flipping show, are capable of earning a profit of $40-$50k as an average on multiple occasions. Of course, you also realize that their success are attributed to the fact that they're professionals, are proficient in hard money loans, they understand the marketplace quite well and in addition, they know how to work an auction for getting a good deal. Still, your rehab and renovation skills aren't that bad either — besides, you have already located a suitable general contractor to start this home.

But funding is often a separate problem entirely. For those who get in touch with a regular lender, much like a bank for a mortgage loan, it likely will take no less than four to eight weeks for your approval to be completed and your funds to be given out. Thus if you happen to be anticipating a fast closing, you have to understand or know that this could set you back by a couple weeks, making you lose out on the home.

Moreover, should you have a sub-optimal credit rating or do not have a conventional income, it may be harder to be eligible for bank financing, seeing the tougher loan requirements banks have put in place as of late. So will a shortage of funding keep you from pursuing your dream? Never, due to the fact you could always use the hard money loan approach to fund your rehab project.

A hard money home loan in gives you what is perhaps most important to real estate investors — a very fast closing time of as little as 14 days. Further, financing can be made up to 70% loan-to-value of the as-is property's valuation, as determined by a professional appraiser. A number of people regard hard money real estate loans to be costlier than customary loans, considering interest rates of such loans usually start out at 10%. But when you appreciate that these are not long-term loans, the interest rate can be misleading. The cost of such short-term loans ought to be considered on par with every other cost that you might encounter during the project. Once you've resold the home and have made a positive financial gain, you'll be able to get back this expense from the property or home — much like recovering the money necessary for the brand-new kitchen appliances that you've put in.

Apart from this, hard money mortgages are not hard to qualify for, even if you have a low credit rating. hard money lenders do not approve a loan strictly according to the customer's credit score — instead they additionally examine the property or home, its location and value, and the property's capacity to pay back the financing independent of the person. Other criteria that impact a borrower's approval for a hard money real estate loan can include what amount of money he is able to put towards a down payment, his past experience being a real estate investor, and price of comparable, recently sold properties in the area.

If you happen to have stumbled upon a really good home to flip with a huge chance of returns, you've also stumbled upon a hard money lender in who's prepared to provide financing for your rehab ventures. Enter your info into the contact form on this page or get in touch with us via phone and let's talk about your property or properties.