Is it really possible to start flipping a house without any money in the bank? Yes, it is, and it might be easier than you think.
For many, the idea of flipping a house seems out of reach. And even seasoned flippers might balk at the idea of tackling a project with no cash on hand. But it’s not only possible to start renovations without upfront cash; it’s actually fairly quick and simple. Fix and flip loans are designed specifically for real estate investors who want to close on a property quickly, renovate fast, and sell for a profit.
Hard money loans — sometimes called rehab loans — are the most common type of fix and flip loans, and they come with a variety of advantages over traditional funding. Here are a few of them:
- They’re super fast. Unlike common real estate loans, which can often take up to a couple months to complete, rehab loans can be funded in as few as 15 days. The faster the money is in the account, the faster a flipper can close on that fixer-upper and get started.
- Many don’t have a prepayment penalty. Some real estate loans come with hidden clauses that penalize the borrower for paying off the debt early. Hard money loans generally don’t come with prepayment penalties, so if you turn a property and make money, you can pay off the loan right away without incurring extra fees.
- They’re not impossible to qualify for. Many lenders want their borrowers to be saints with big paychecks, not a hint of debt, and sparkling clean credit scores. Hard money loans for flippers are generally more interested in the property than the history of the person who’s borrowing.
Is a fix and flip loan right for you?
A fix and flip loan may not be right for everyone. Since they require less rigorous requirements and they’re shorter-term, they often come with higher rates, and for some, that may be a deal breaker. However, they are right for people who have some previous experience flipping, first-timers who are using a contractor, or flippers who need to make an all-cash offer to compete in the market.
Getting a fix and flip loan
If you’re ready to jump on that perfect flip opportunity, speaking with a hard money broker may be your best bet. He or she can outline the pros and cons, give you a competitive rate, and help you qualify.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.