An outstanding buy on a fix and flip property located in an excellent neighborhood suddenly shows up — sounds too good to be true. You've probably heard that veteran home flippers, similar to the couple on HGTV's Flip or Flop, enjoy an impressive average return near forty to fifty thousand dollars. Without question, their rehabbing experience, understanding of hard money loans, familiarity with the market, and auction skills have had an important part in their results. With that being said, you've recently been brushing up your rehab and renovation knowledge, have a very good licensed contractor lined up and are confident that you're capable of doing a bang up job for this property.

But funding is often a different problem altogether. If you opt for a regular loan from the bank, you will need to wait roughly 1-2 months up until the financing is authorized and the funding is accessible. Given that home owners give preference to a fast closing, it may be advisable to start seeking out other funding options.

With banks establishing more challenging loan standards in the last few years, it has become tougher for a self-employed person to obtain a mortgage loan, especially when his credit score is not optimal. So does that leave you with no option, but to abandon your aspiration of getting into flipping? Never, considering that you could always use the hard money loan approach to pay for your home flipping project.

A hard money home loan in promises what's probably most essential to real estate investors — a quick closing time of as few as a few weeks. Additionally, financing can be made up to 70% loan-to-value of the "as is" house value, as determined by a professional appraiser. On the surface, hard money real estate loans, with starting interest rates of 10%, appear to be more pricey than bank lending products. But if you understand these are not long-term mortgage loans, the rate tends to be misleading. Short-term loans of a couple months to a handful of years are best thought of in terms of cost of capital, much like every other expense related to a project. When you have resold the property or home and have made a successful gain, you're able to reclaim this expense from the house — much like recouping the cost of brand-new home appliances that you put in.

What's more, it's easy to be eligible for a hard money mortgage, regardless if your credit situation is not that great. Rather than focusing entirely on the applicant's credit score or source of income, hard money lenders, who could be a privately owned company or an individual, approve a loan after evaluating the home value, how easy it will be to market, its location, and the likelihood of getting back their money should they have to foreclose the loan. On top of that, if the applicant can demonstrate past experience in similar real estate projects, can place down money for the down payment, and the price of comparative properties in the neighborhood works in his favor, he will have an excellent chance of qualifying to obtain a hard money real estate loan.

Finding a hard money lender in to fund your real estate project is not hard, so long as the opportunity that lies before you is promising and boasts a good potential for returns. Complete the form on this page or call us and let's discuss your project.