Suppose you've run across this truly good deal on a fix and flip property located in a great neighborhood, and you happen to be either an experienced real estate investor or a newbie who is looking to try out flipping homes. Most folks know that skilled professional flippers, along the lines of Tarek and Christina El Moussa who star in HGTV's reality home flipping program, Fix or Flop, can make a typical profit of forty to fifty thousand dollars when they flip properties. Of course, you also understand that their results can be credited to the simple fact that they're industry experts, are well versed in hard money loans, they know the market quite well and furthermore, they know how to work a public auction to buy their homes at an appropriate deal. Still, your rehab and remodeling knowledge isn't that bad either — aside from that, you have already located an ideal contractor to take on this home.

But how can you get the needed capital for home flipping? When you approach a regular lender, such as a bank for a mortgage loan, it's very likely going to take at least four to eight weeks for your acceptance to be completed and the money to be given out. Thus if you happen to be wishing for a fast closing, it is important to realize that this will set you back by a few weeks, causing you to lose out on the sale.

With banks establishing tougher loan guidelines in the past few years, it is more difficult for a self-employed individual to find a home loan, especially if his credit score is not optimal. So will inadequate financing stop you from sticking to your dream? Definitely not, because you also have the hard money loan option.

A hard money home loan in offers you what's deemed crucial to most real estate deals — a quick closing of only a few weeks and more often than not even less. Furthermore, hard money lenders frequently agree to loans up to 70% LTV of the property's valuation, as determined by a qualified third-party evaluator. Some individuals regard hard money real estate loans to be costlier than standard financing, since the interest rates of such loans ordinarily start off at 10%. But in reality, the rate of interest is not as relevant for these loans, simply because they will never be long-term financing. Short-term loans of a couple months to a few years are best looked at in terms of cost of capital, much like every other expenditure associated with a project. When you have sold the property and have made a good financial gain, you're able to reclaim this expense from the home — the same as recuperating the money necessary for the brand-new appliances for the kitchen that you put in.

Besides, hard money mortgages are easy qualifying, even in the event you have very bad credit. The applicant's credit score will not be the exclusive deciding factor for hard money lenders — additionally, they analyze the home, how much it is worth, where it is located, and its capacity to bring back their financial commitment if things do not go as planned. Adding to this, if the individual have proven experience in comparable real estate endeavors, can put down cash towards the down payment, and the price of comparative properties in the neighborhood works in his favor, he has got a very good likelihood of being eligible to obtain a hard money real estate loan.

Locating a hard money lender in to cover expenses for your fix and flip endeavor is not very challenging, provided that the opportunity before you is promising and possesses the right prospect for returns. Enter your info into the contact form on this page or give us a call to discuss the project you have in mind.