Have you ever wondered how real estate investors make a lot of money? Many of them do it with fix and flip loans.
Flipping houses isn’t new. People have been doing it for decades. What is new is using loans to do it. People figured out they don’t need to have the cash to flip homes. Instead, they can borrow the money and sell the renovated home at a higher amount to pay it back and then pocket the rest.
Making Fix and Flip Loans Work
When you use these types of loans for investing in real estate, you are basically using borrowed money to produce a profit. After going through the loan process, you will take the amount you were able to become approved for and buy a home.
It’s important to research how much work the house needs, the housing market in the area, and the comps in the neighborhood. This way you will know how much you could potentially sell the house for after it’s been fixed.
For example, if you have a loan of $100,000 and purchase a home for $80,000. You could put about $20,000 worth of repairs in it. If you are able to sell it for $150,000 afterwards, you would make $50,000 profit.
Some people will take that $50,000 and roll it into another investment. They may borrow just $50,000 the second time, purchase a similar home for $80,000, put $20,000 worth of repairs into it, and then sell it for $150,000. In total, that would turn a profit of $100,000.
The investor could then either just use the profit to generate more profit or combine it with another loan to buy a more expensive house to hopefully turn a higher profit. This is how people make a lot of money.
All you have to do is sell one home with a profit of $50,000 a year to have that as your annual income. If you sold two homes with a $50,000 profit, you would have a $100,000 profit. Pretty nice way to make a hundred grand in a year, right?
It’s true! You don’t need the cash. You just need the seed money from a fix and flip loan. Some of these loans do not require good credit or high income from employment. They can be secured with collateral. To see if you may be eligible to use fix and flip loans, contact us.
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.