Flipping Houses: Financing Tips You Need
Whether it is a supplemental income stream or an aspect of your career as a commercial real estate investor, flipping houses is very lucrative. However, knowing what type of real estate financing and when can save you a lot of time and money, making the process of flipping houses much easier and more profitable.
Bank Loans Are Not Always The Answer
For many new commercial real estate investors, traditional bank loans might seem like the “go to” solution for financing a house flipping project. In reality, banks have very high requirements for commercial real estate loans, and want to see things like impeccable credit history, and a long history of employment – even if you are in business for yourself. Additionally, bank loans can take a long time to process, making it almost impossible to purchase or renovate property in a timely manner.
For property acquisitions, there are a number of options. Bridge or hard money loans work great for those new to flipping houses, by filling in the gaps in funding to meet more immediate financial obligations while larger financing is still in the pipeline, as well as to prepare a house for listing. Short-term commercial loans can also be arranged quickly for time-sensitive opportunities on houses. HUD and FHA loans can also be used for purchasing property with specific designations (such as senior housing or multifamily properties), which can be sold off to a buyer later on down the lines.
Part of flipping houses involved getting the property up to code. Depending on the extent of the renovations, mezzanine financing might fit the bill. Mezzanine financing can be arranged in short order and customized to fit the purchase and renovation project. Mezzanine financing is also more focused on the overall profitability of the house flipping project, than credit ratings and financial standing.
Preparing Houses For Sale
Sometimes there are gaps in short-term financing when preparing a house to be put on the market. Rather than max out credit cards or wait on a traditional bank loan, many commercial real estate investors get hard money or bridge loans. These fast loans are a great solution for flipping houses, because they provide the funding needed to cover the listing, stages, and final touches on a property, to draw in potential buyers. Bridge loans can also be used to cover immediate expenses when purchasing houses, while larger financing is still being processed.
Get An Advantage With Flipping Houses
If flipping houses is part of your career in the real estate market, call CounselPro Lending at 1-888-292-3322. We provide fast and affordable financing to commercial real estate markets across the country and internationally. Let us know your financing needs, and we will provide solutions to help you reach your goals.