Entering the real estate industry can be an exciting and intimidating venture all at the same time. In real estate, there are large dollar amounts involved, as well as different trades such as plumbing or electrical. However, one aspect of jumping into the real estate market that doesn’t have to be stressful is the financing.
Typically, fixing and flipping the properties needs financing so you have cash flow to put into the home and hopefully sell it at a profit.
When starting out, it can be quite overwhelming, so here are a few items to consider when obtaining a fix and flip loan.
Getting started on becoming a fix-and-flipper? Here's what you need to know to be prepared for getting financing.
When entering this space, you first need to have a plan in place and stick to it. From there, you should determine how much funding you need to complete the project. Lastly, shop around the different types of flip and fix loans to find the best bargain.
When you start looking for financing, ensure you have a plan in place as to what you are going to do with the financing and renovation.
Having a plan in place will allow you to approach fix and flip loans with confidence, knowing what you need and not borrowing too much.
Also, should something go off plan during the renovation, you won’t be caught off guard and can direct the project back on track.
It's the most important step - the first step - to getting fix and flip loans and living your dream.
Estimating the cost of a fix-and-flip project before diving in is extremely important.
When obtaining a fix and flip loan, you want to ensure you have enough money to finish the project. This not only gives you the potential profit, but also ensures the lender gets paid.
In order to do this, you will need the help of an appraiser to accurately give you an estimate. The reason for this is not only to ensure you have enough funding to finish the project, but also to ensure you don't borrow more than you need.
Fix and flip loans are a great way to ensure cash flow continues in a healthy manner.
Lastly, you will want to consider the type of lending you will seek to obtain during the fix and flip process.
The first you can consider is a hard money lender, which uses the property as collateral and lends you funds based upon your request.
Using this approach can work well because you are working with a lender who specializes in this.
Also, you can look to use your permanent home’s equity to obtain a line of credit. While this may not be the most efficient option, it can take the equity in your home and allow you to earn more revenue.
The fix and flip loan market can be intimidating for new people, but with a better understanding it can become your biggest asset.
Gauntlet Funding is a hard money lender that can help you complete your first or next fix-and-flip financing needs. Fixing and flipping real estate can be a wonderful enhancement to your portfolio, so call us today at 631-465-2161 to learn more and get pre-approved!
Fix and Flip Loans for Beginners | Gauntlet Funding - NY