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Imagine you've stumbled upon this really great bargain on a fix and flip property in an ideal neighborhood, and you happen to be either a seasoned real estate investor or a first-timer who is looking to try his hand at flipping. Most folks know that expert professional flippers, such as Tarek and Christina El Moussa from HGTV's reality flipping show, Fix or Flop, are able to make an average profit of $40,000 to $50,000 on their home projects. Of course, you also understand that their results can be credited to the simple fact that they're professionals, are proficient in hard money loans, they understand market trends really well and in addition, they are good at working an auction for getting a good deal. That said, you've also been cultivating your rehab and renovation skills, have got a general contractor lined up and are certain that you're capable of doing a great job on this home.
But where do you get the necessary capital for flipping? A standard lender, for instance a bank, takes no less than 1-2 months to authorize the financing and deliver the money. Since most home owners wish to have a fast closing, it may be best to start looking for additional funding alternatives.
Furthermore, for those who have a less-than-perfect credit rating or don't receive a regular income source, it is normally more difficult for you to be eligible for a bank financing, seeing the tougher loan guidelines banks have put in place as of late. So will a lack of funding prevent you from sticking to your ambitions? By no means, due to the fact you could always go the Colorado hard money loan route to finance your home renovating project.
A hard money home loan in Colorado provides what's deemed essential to most real estate transactions — a very fast closing of only a 2-3 weeks and more often than not even less. And additionally, loans can be done for up to 70% loan-to-value of the "as is" house's valuation, as established by a qualified appraiser. Some people consider hard money real estate loans to be more costly than standard financing, considering lending rates of such loans often start off at 10%. But once you appreciate that these loans are not long-term home loans, the interest rate may be misleading. The price of such short-term loans should be viewed much like any other cost that you will encounter in the course of the project. After you rehab and unload the property, recuperating this expense is the same as recouping the cost of the home appliances you placed into the property.
In addition, even someone with poor credit can easily be eligible for a hard money mortgage. Colorado hard money lenders do not authorize a loan strictly judging by the applicant's credit score — rather they also examine the home, its value and location, and the home's ability to pay back the financing by itself. Adding to this, if the borrower have proven experience in comparable real estate projects, can put down money towards the down payment, and the price of similar houses in the vicinity works to his benefit, he has got a very good shot of being approved to get a hard money real estate loan.
If you happen to have found a wonderful real estate opportunity with a significant chance of returns, you have also discovered a hard money lender in Colorado that's happy to finance your fix and flip venture. Submit the form or give us a call to discuss your property.
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