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Suppose you've come across this excellent deal on a fix and flip property you found in an ideal neighborhood, and you are either a seasoned real estate investor or a newbie who is looking to try his hand at flipping. Many people know that expert professional flippers, such as Tarek and Christina El Moussa from HGTV's reality home flipping show, Fix or Flop, can readily turn a typical profit of $40,000 to $50,000 when they flip properties. It's fair to say their past experiences rehabbing, knowledge of hard money loans, familiarity with the housing market, and auction skills have been large factors to their results. With that being said, you've also been brushing up your rehab and renovation knowledge, have a contractor arranged and are certain that you will be able to do a great job for this home.
But where precisely do real estate investors find financing? In the event you get in touch with a common lender, such as a bank for a loan, it's in all likelihood going to take, at a minimum, thirty to sixty days for your approval to come through and the money to be given out. With all the sellers wanting a fast closing, that does not appear like a great idea to you whatsoever.
Moreover, if you have a sub-optimal credit score or do not receive a routine source of income, it can be tougher for you to be eligible for a bank financing, with the more stringent loan requirements banks have issued recently. So does that mean you are without an option, but to give up your aspiration of getting into rehabbing? Certainly not, considering that you can always use the New Mexico hard money loan approach to finance your home renovating project.
A hard money home loan in New Mexico provides you with what's possibly most important to real estate investors — a fast closing time of as little as a few weeks. Aside from that, loan amounts are made up to 70% loan-to-value of the "as is" valuation, as calculated by a licensed appraiser. On the surface, hard money real estate loans, with starting lending rates of 10%, could be seen as more costly than bank loans. But usually, the interest rate is not as relevant for these loans, given that they will never be long-term loans. The price tag on such short-term loans should be evaluated much like every other expense that you might encounter during the project. Once you've resold the house and have made a positive gain, you'll be able to reclaim this expense from the property or home — just like recovering the cost of brand-new home appliances that you installed.
Additionally, it's easy to be eligible for a hard money mortgage, regardless if your credit rating is not that impressive. New Mexico hard money lenders don't approve a loan exclusively judging by the borrower's credit score — rather they additionally look at the property or home, its location and value, and the home's ability to pay back the financing independent of the person. How much a borrower can put upfront for the home, how much experience he has in real estate investments, and selling price of equivalent homes in the area are other details that go into determining an applicant's suitability for a hard money real estate loan.
So should you come across a good and lucrative investment opportunity, feel comfortable knowing you will have a hard money lender in New Mexico, ready to loan you the money you need. Fill out the form on this page or call us to talk about your project.
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