Imagine you've come across this excellent bargain for a fix and flip property located in a terrific location, and you are either a seasoned real estate investor or a newbie who hopes to try out flipping homes. Most folks know that capable professional flippers, such as Tarek and Christina El Moussa who do HGTV's reality flipping show, Fix or Flop, can generate an average profit of forty to fifty thousand dollars in their rehab business. Without question, their past experiences rehabbing, understanding of hard money loans, expertise in their market, and auction skills have had a big role in their success. Having said that, you've also been cultivating your rehab and remodeling skills, have a very good building contractor ready to go and are confident that you will be able to do an impressive job for this property.

But where do you get the necessary financing for home flipping? A typical lender, say for example a bank, takes no less than 1 to 2 months to authorize the loan and deliver the monies. So if you are hoping for a fast closing, you need to recognize that this will set you back by a couple weeks, making you miss out on the home.

To add to it, banks have already been tightening their lending criteria as of late, rendering it more tough for a person to receive a typical home loan if their credit circumstances are not perfect or he does not have a consistent salaried profession. So does this leave you with no option, but to abandon your ambition of getting into rehabbing? Certainly not, because you always have the hard money loan alternative.

A hard money home loan in boasts what's probably most important to real estate investors — a very fast closing time period of as little as fourteen days. And additionally, loans are made up to 70% loan-to-value of the "as is" home's valuation, as calculated by a professional appraiser. On the surface, hard money real estate loans, with starting interest rates of 10%, seem to be more expensive than bank lending products. But in reality, the interest rate is not as relevant for these loans, because they will never be long-term loans. When it comes to short-term loans of one or two years or less, you should think of them the same as you might for every other expense for the project. Once you have sold the house and have made a successful profit, you'll be able to reclaim this expense from the house — similar to recovering the money spent on the brand-new appliances for the kitchen that you have put in.

Additionally, it's easy to be eligible for a a hard money mortgage, even in the event your credit rating is not that great. hard money lenders don't approve a loan exclusively judging by the applicant's credit score — rather they will evaluate the home, its value and location, and the property's capacity to pay back the financing by itself. Adding to that, if the borrower can demonstrate past experience in equivalent real estate ventures, can put down money towards a down payment, and the cost of comparative properties in the vicinity works to his benefit, he has a very good likelihood of being eligible to obtain a hard money real estate loan.

Searching for a hard money lender in to finance your real estate project is not difficult, assuming that the opportunity before you is promising and offers the right potential for returns. Enter your info into the form on this page or give us a call to talk about your property.