An outstanding buy on a fix and flip property in a nice neighborhood shows up out of the blue — sounds so good that it's hard to believe. You've heard that veteran home flippers, much like the married couple on HGTV's Flip or Flop, have a remarkable average return close to $40,000 – $50,000. And indeed, they are helped in a major way via their professional experience, auction abilities and understanding of hard money loans. That said, you've also been developing your rehab and remodeling knowledge, have a contractor ready to go and are certain that you will be able to do an impressive job for this home.

But how exactly do real estate investors obtain financing? A traditional lending institution, say for example a bank, takes at the very least 1-2 months to authorize the mortgage and release the money. So if you are hoping for a fast closing, you need to realize that this could cost you a couple weeks, making you miss out on the opportunity.

With banks establishing tougher loan criteria in the past few years, it's become much harder for a self-employed person to obtain a mortgage loan, especially if his credit rating is not optimal. So will inadequate funding prevent you from sticking to your dream? Absolutely not, seeing as you also have the Pompton Lakes, New Jersey hard money loan option.

A hard money home loan in Pompton Lakes offers you what is viewed as imperative to many real estate sales — a very fast closing of just a 2-3 weeks and at many times less. Aside from that, financing is made up to 70% loan-to-value of the as-is house value, as deemed by a qualified appraiser. With loan rates starting out at about 10%, hard money real estate loans may seem, initially, to be more costly as compared with conventional bank financing. But the term lengths for these loans are comparatively short, which makes the rate much less important. Short-term loans of a couple months to a handful of years are best looked at in terms of cost of capital, similar to any other financial outlay involved with a project. And when you have turned the property, recovering this expense is identical to recovering the expense for the bathroom or other improvements you performed.

In addition, even an individual with bad credit can still qualify for a hard money mortgage. Pompton Lakes hard money lenders do not take on a loan solely based on the applicant's credit score — rather they also evaluate the property or home, where it is located and how much it is worth, and the property's ability to pay back the financing independent of the person. The total amount that a person can put down in advance for the property, his past real estate experience, and selling price of equivalent homes in the neighborhood are other factors that go into determining a person's eligibility for a hard money real estate loan.

If you happen to have found a really great home to flip with a significant probability of returns, you have also discovered a hard money lender in Pompton Lakes that is prepared to finance your fix and flip projects. Fill out the contact form on this page or get in touch with us via phone to discuss your property.