There's this phenomenal opportunity to renovate and flip this wonderful out of date house in a good area and it looks like the deal you've been wanting for a long time. Most folks know that capable professional flippers, like Tarek and Christina El Moussa who do HGTV's reality flipping program, Fix or Flop, can readily make a typical profit margin of $40,000 to $50,000 on their home projects. It's fair to say their rehabbing experience, understanding of hard money loans, familiarity with the market, and auction talents have had an important role in their success. On the other hand, you are certain that your superb rehab and renovation knowledge will enable you to do a great job for this project — in addition, you already have lined up one of the best building contractors in town to work on this job.
But funding is usually a different issue altogether. A typical lending institution, for instance a bank, takes at the very least one to two months to authorize the mortgage and hand over the cash. Since the majority of home owners favor a fast closing, it may be best to start searching for additional funding options.
Furthermore, should you have a less-than-perfect credit score or don't receive a routine income, it is normally more challenging for you to be eligible for a a bank loan, seeing the more stringent loan criteria banks have put in place as of late. So does this leave you with no other option, but to drop your dream of venturing into rehabbing? Certainly not, given that you always have the Michigan hard money loan alternative.
If you decide to apply for a hard money home loan in Michigan, you have access to what is probably most vital to real estate purchases throughout the country — a very fast closing of roughly 14 days. Further, financing is made up to 70% loan-to-value of the "as is" house's valuation, as determined by a qualified appraiser. Some people regard hard money real estate loans to be more costly than standard financing, since the lending rates of such loans typically start off at 10%. But in reality, the lending rate isn't as useful a measure for these loans, simply because they aren't long-term financing. Short-term loans of a couple months to a few years are best understood as cost of capital, much like any other expenditure involved with a project. And once you have finally sold the property, recouping this expense is the exact same as recovering the expense for the bathroom or other updates you performed.
Furthermore, even individuals with poor credit can easily qualify for a hard money mortgage. The customer's credit score is not the exclusive deciding factor for Michigan hard money lenders — they also analyze the house, its market valuation, its location, and its capacity to return their investment if things should not go as intended. Additional criteria that impact a borrower's acceptance for a hard money real estate loan include the amount he is able to put towards a down payment, his former experience as a real estate investor, and price range of similar, just recently sold homes nearby.
Finding a hard money lender in Michigan to finance your renovation project is not very challenging, assuming that the opportunity that lies before you is promising and boasts a strong prospect for returns. Submit the contact form on this page or call us to talk about your property or properties.