Suppose that you've stumbled upon this excellent deal on a fix and flip property located in a terrific neighborhood, and you are either an experienced real estate investor or a newbie who hopes to try out flipping houses. Many people know that knowledgeable professional flippers, like Tarek and Christina El Moussa who do HGTV's reality home flipping program, Fix or Flop, can make an average profit of forty to fifty thousand dollars when they flip properties. Naturally, you also recognize that their success are attributed to the simple fact that they're industry experts, are knowledgeable in hard money loans, they understand the marketplace quite well and they also are good at working a public auction to purchase their houses at a reasonable price. With that being said, you've also been brushing up your rehab and renovation knowledge, have a very good licensed contractor ready for the project and are confident that you can do a great job for this property.

But money is a separate question altogether. In the event you apply for a traditional bank loan, you will end up waiting around somewhere around 1 to 2 months up until the time the mortgage loan is approved and the funding is ready to go. Because most sellers would prefer a fast closing, you may have to start seeking out other funding options.

Moreover, in case you have a less-than-perfect credit score or don't have a regular source of income, it is usually harder to be eligible for a bank loan, considering the more stringent loan guidelines banks have introduced in recent times. So do you have to give up and abandon your desire to get into real estate? Certainly not, on the grounds that you can always go the Somerville hard money loan route to fund your home flipping project.

A hard money home loan in Somerville offers you what is deemed vital to most real estate transactions — a fast closing of only a few weeks and at many times less. Plus, the LTV value can go up to 70% of the home value, as determined by a credentialed appraiser. On the surface, hard money real estate loans, with starting interest rates of 10%, seem to be higher in price than bank lending options. But once you appreciate that these loans are not long-term home loans, the interest rate may be misleading. Short-term loans of several months to a few years are best understood as cost of capital, very much like any other expenditure associated with a project. Right after you fix up and sell the property, recovering this expense is no different than recouping the cost of the home appliances you placed into the property.

Furthermore, even an individual with low credit will be able to be eligible for a hard money mortgage. Rather than focusing primarily on the borrower's credit score or wages, Somerville hard money lenders, who may be a private company or an individual, say yes to a loan as a result of evaluating the home value, how easy it will be to market, where it is located, and the probability of recovering their money in the event of foreclosure. Additional criteria that have an impact on a customer's eligibility for a hard money real estate loan include the amount he can put towards a down payment, his prior experience as a real estate investor, and selling price of comparable, fairly recently sold residences in the neighborhood.

If you happen to have stumbled upon an excellent home to flip with a huge probability of returns, you have also found yourself a hard money lender in Somerville who is happy to provide financing for your rehab venture. Submit the contact form on this page or get in touch with us via phone and let's discuss the property you have in mind.