The traditional mortgage route seems very slow. Other than private financing (from an individual person), is there another way to finance a house for the month or two that I fix it up before I flip it?
2007-02-01 09:37:43 · 7 answers · asked by Mikey V 1 in Business & Finance ➔ Renting & Real Estate
That is the most common problem facing people that flip proerties or purchase foreclosures. They are in a constant need of instant cash.
Your local mortgage brokers and banks are not prepared to react to the immediate needs necessary. You might be able to establish a line of credit for this use through a bank.
In order to flip properties you need to cultivate some serious investors to assist you in your projects. You may do this by advertising in your local paper. This will not be a short term exercise. You will need to advertise over a period of time as well as about the same time each week or month which ever you decide to do.
You protect your investor by placing his/her name on the property.
Now you have to come up with a split. Since, some will consider you an inexperience flipper they might want a bigger share of the profits. Look at it this way. You have zero funds now therefore it appears as if you will earn zero on you investment projects. There is no normal split but 50/50 is not uncommon. There are other splits also entertain all, but if you take the lead most likely you can get pretty much what you want.
When you acquire your investors make sure that you cover your bases so you don't have to go back and ask for additional funds. It is better to ask for more than less. So take in consideration the amount you need for repairs, the monthly cost of the mortgage payments and the number of months you will need to repair and sell the property. If you have to give the owner something don't forget to add that in to the equation.
When things go right you will always contact your investors, have that same attitude when things go wrong make sure your investors are still happy.
Never take an investors money without a project in mind. Always allow the investor to be able to select his own property he want to invest in.
It might be to your best interest to find out about limited partnerships, so check out a few books on the subject at your local book store or library.
When you get a number of investors that trust you, you might want to move to bigger and better projects.
I hope this has been of some use to you, good luck.
"FIGHT ON:
2007-02-01 10:20:32 · answer #1 · answered by Skip 6 · 1⤊ 0⤋
Other than the private money you mentioned you have:
1. Secured or unsecured line of credit with a bank:
2. Secured loan against your stock portfolio. If you own stock, contact your broker for details & advice.
3. Credit cards (to fund a portion)
3. Hard money
Hard money lenders provide short term financing specifically for real estate investors.
The good:
- qualifying is easier than for a regular mortgage.
- if you buy the property at the right price, h.m. lenders will provide 100% financing.
The bad & the ugly:
- the rates are high and they charge points.
Don't automatically push this option aside. If the #s work, and you don't have a better option, then give h.m. a look.
Here's some info on hard money: http://geltfinancial.com/LoanRehab.asp
**The information I provided above should not be construed as advice or an endorsement of a company or product.
2007-02-01 11:48:36 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Do you own your house? You can get a home equity line of credit to purchase the items you will need to fix the place. Hard money lenders can be expensive but you can shop around for those as well. There are some investors out there that will work with you but make sure there are clauses in the contract that cover you if something goes wrong. They could put a mechanics lien against the property which will loud the title when you want to sell.
2016-05-24 03:05:35 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Find a hard money lender. rates may be a little higher but its for the convenience of having cash quick. If you are going to buy a true flip, other investors will be interested as well so you will have to act quick. Have the money lined up. Find yourself a good Realtor who knows this market. you can make a lot of money or loose a lot. As the person above says its not like on TV. I have made several flip investments and have always done well, but its all about knowing what your doing. Not just any Realtor will do in this type of investment.
good luck and be careful.
RE agent,
Remax
2007-02-01 11:11:22 · answer #4 · answered by frankie b 5 · 0⤊ 0⤋
Take a minute and fill out the free evaluation form at
www.totaldebtsolutionsllc.com
I believe we can find someone from out loan officer network to help you with this venture. Good luck.
2007-02-02 05:09:38 · answer #5 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋
your bank through people you know or your own CASH Money! BEWARE its not like it is on tv. have you checked out working for a flip person first? try trademark propertys in Charleston sc. dude.
2007-02-01 10:57:10 · answer #6 · answered by swimmyfishy 4 · 0⤊ 0⤋
discuss financing options with a mortgage lender, rather than a bank... they can tailor something to meet your specific needs!
2007-02-01 09:50:17 · answer #7 · answered by Art 4 · 1⤊ 0⤋