A recent episode of flip or flop might have convinced you to start flipping houses. But as the credits roll you realize you have a problem, you don’t exactly have a stash of gold bars buried in the back yard, so to get started in the flipping business- you’ll need financing. Where do you start? This article will tel where not to go and where to go to get rehab loans.
Those just starting out in the flipping business might think that their local JP Morgan Branch office will finance their first deal. Why not, if you’ve planned your project carefully, have a decent downpayment and have a good credit score, why wouldn’t your local bank give you a loan to flip your first house?
Well there’s really only one reason-
You cannot get Arizona rehab loans from banks.
Getting a rehab loan from a traditional bank is impossible. God himself might have spoken to you in a vision and said ‘if you flip it they will come,’ but still a bank wonk give you money for a flip. Period-end of discussion.
This is because banks fund their loans by selling their mortgages back to the government, which means a whole lot of bureaucracy comes into play when it comes to the condition of the home you intend to purchase. Basically any property you finance through a bank, has to be as close picture perfect as possible, and if you want to flip a house, this wont be the case.
So if banks don’t offer loans to flip houses, who does?
Arizona hard money is a loan given by a private lender based on the value of the hard asset (i.e. The house you intend to flip). These sorts of lenders specialize in funding flips, its their main game.
You might be consider other ways to finance your flip, like going to your relatives, but heres 3 reasons why Arizona hard money is your best bet if you want to get into the flipping business:
• Property condition isn’t a factor- The first house you want to flip might have one out of four walls left standing, but if you have a solid plan a Arizona hard money provider can still fund this sort of deal.
• No bureaucracy- Most Arizona hard money providers don’t answer to anyone but themselves. Without bank bureaucracy things like your down payment and interest rate are up for negotiation, which means you can get a better deal.
• Loan terms make sense for a flip- Arizona hard money is short term, with terms which don’t usually go over 12 months. No solid flip should take more than a year.
Speaking of loan terms, if you’re new to the flipping business you might see those double digit interest rates and be ready to spit up your lunch. In truth is, those high interest rates wont matter if your deal is good enough.
If you end up paying 2 K in interest, but earn 40 K in profit from a flip, a couple grand is nothing.
So in short if you want to start making money in the flipping business, you need Arizona hard money.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: 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.
© 2019 Level 4 Funding LLC. All Rights Reserved.