A large number of people planning to venture in real estate house flipping business are usually faced the challenge of how to finance the first house flip. Their greatest motivation being that house flipping is highly profitable, the question of how to get the house that is in a bad condition renovated and actually sell it for a profit may be a bit of a problem. In their quest to find funds, these entrepreneurs may consider fix and flip loans. These are loans that have more benefits compared to other commercial banks loan services.
Fix and flip loans are quick to process. In comparison with other banks that offer lending services, fix some and flip loans can be processed within a short while of up to two weeks. Banks take a relatively longer period of up to two months to process these loans. These helps save on time, since the sooner you get the funds the sooner you can get moving with your business. However, to acquire a loan, it’s a requirement of flip and loan lenders to provide some important documents beforehand like the property appraisal, repair estimates, past tax returns and bank statements.
Fix and flip loans allow upcoming house flippers to acquire loans without having a good credit background. This is a basic requirement for commercial banks which may be a hindrance for entrepreneurs in the real estate Industry. This is because these money lenders have less strict requirements while giving loans to especially house flippers. One might not be qualifying for a loan elsewhere, but can find a lender willing to finance a house flipping business. This is a good thing since most money lenders require one to have a clean credit record to loan them any amount of money.
Fix and flip loans are short term loans that take up to 12 months to repay. This is great deal since repairing a house can take up a short period which results to selling the house within a short period of selling translating to faster payment of the loan too. This a great way to invest as one is assured of profit within a short period of time as a repayment of the loan. This repayment scheme also allows one to repay the loan in regards with the time it takes to sell an already renovated house. This means you can pay a lesser amount of loan interests if the house is sold instantly or a slightly higher amount if it takes longer to sell a house that was renovated on loan.
In comparison to other bank and non-bank financial institutions, fix and flip loans are more advantages to first time flippers. They should however always consider the consider the conditions given by other hard money or private lenders since they are all different before they determine from where to acquire their first loan. This is gives them an upper hand depending on their preference of what they consider to be good terms of a lender.