Imagine you've run into this really great deal on a fix and flip property located in a terrific neighborhood, and you're either an experienced real estate investor or a first-timer who wants to try his hand at flipping. Most folks know that expert professional flippers, such as Tarek and Christina El Moussa who star in HGTV's reality home flipping show, Fix or Flop, can readily turn a typical profit margin of $40,000 to $50,000 on their flips. And without a doubt, they are helped in a major way via their professional know-how, auction expertise and knowledge of hard money loans. That said, you have likewise been brushing up your rehab and renovation skills, have a building contractor ready for the project and are confident that you're capable of doing a bang up job on this home.
But money can be a separate question entirely. In the event you approach a customary lender, like a bank for a mortgage loan, it more than likely will take a minimum of 4-8 weeks for the approval to be completed and the money to be dispersed. So if you're looking for a fast closing, it's important for you to recognize that this will set you back by a few weeks, making you lose out on the sale.
As well as this, in case you have a sub-optimal credit rating or do not have a routine source of income, it is usually harder for you to be eligible for a a bank loan, seeing the tighter loan guidelines banks have put in place of late. So does that mean you have no option, but to drop your aspiration of venturing into home flipping? Never, due to the fact you can always use the Georgia hard money loan approach to pay for your rehab project.
A hard money home loan in Georgia offers you what is deemed essential to many real estate transactions — a very fast closing of just a 2-3 weeks and at many times even less. Additionally, loans can be done for up to 70% loan-to-value of the as-is home value, as established by a professional appraiser. At first glance, hard money real estate loans, with starting interest rates of 10%, appear to be higher priced than bank financing. But when you consider these loans are not long-term mortgage loans, the rate tends to be misleading. The cost of such short-term loans should be viewed much like any other expense that you will have to meet for the project. After you rehab and resell the house, recouping this expense is just like recouping the money you spent for new kitchen appliances you placed into the property.
Additionally, it is simple to be eligible for a hard money mortgage, even if your credit rating is not that extraordinary. Georgia hard money lenders do not take on a loan solely judging by the applicant's credit score — rather they will look at the property, its valuation and location, and the home's capacity to pay back the loan without the help of the person. Other factors that affect a borrower's approval for a hard money real estate loan include the amount he is in a position to put into a down payment, his previous experience being a real estate investor, and selling price of comparative, fairly recently sold homes in the neighborhood.
So should you run into a good and worthwhile flipping opportunity, feel comfortable knowing you will have a hard money lender in Georgia, willing to lend you the funds you will need. Submit the form or get in touch with us via phone to talk about your project.