This is the Easy Way to Get Financing for House-Flipping

This is the Easy Way to Get Financing for House-Flipping

By | 2017-02-02T21:30:34+00:00 February 2nd, 2017|Bad Credit Loans|Comments Off on This is the Easy Way to Get Financing for House-Flipping

In the past, it was extremely difficult for investors to get financing for house-flipping. However, it’s becoming increasingly easier to get the money to make these profitable investments.

Both small-scale or luxury home-flips can be incredibly lucrative. Daren Blomquist, senior vice president of Attom Data Solutions, an Irvine, California-based real-estate data provider said that investing in luxury homes can be a double-edged sword:

“With one flip, you could make the same amount that you could with 10 deals of a lower-end property. But you’re putting many more eggs in one basket and counting on that one property to deliver.”

The Wall Street Journal reports, “Many small-scale home flippers still rely on so-called hard-money loans—short-term, high-interest loans provided by private investors.”

Why should a house-flipper opt for a hard money loan instead of getting their mortgage from a bank? Realtor.com answers this question, “Because hard money loans are generally less of a hassle. The flip side? You can borrow the money for only a short period of time—and at a much higher interest rate.”

These short-term, high-interest-rate loans are popular among house-flippers, investors, builders, and people with bad credit.

Hard money loan terms are usually much shorter; from six months to one year is most common, but sometimes they can go up to five years. Of course, interest rates are considerably higher, usually ranging from 12% to 21%.

Getting a hard money loan allows investors to skip all of the qualifying procedures which are required by big banks. Investors can usually get a hard money loan much faster. In many cases, it could take as little as one week.

About the Author:

Yanni Raz is The Founder and CEO of HML Investments, with over 15 years in the real estate and hard money lending industry, Yanni is an expert in real estate investing, trust deed investments and more.