Unless you’re fabulously wealthy, you’re going to need financing help to tackle fix and flip projects. Maybe you’ve already mastered how to determine the right type of home to buy, find the best locations, and do renovations in a cost-efficient manner. But equally important to the process is understanding financing options and navigating the loan process. Take a look at why private loans are the top solution for home flip loans.
Flexibility in Lending
Traditional lenders come with conventional trappings. The small hometown lender who knew you personally and could vouch for your character is mostly a relic of bygone years. While modern technology has sped up certain processes, loan officers will be bound by institutional standards with little wiggle room. A private lender can make a judgment call based on knowing you and your project alone. If you have demonstrated proof of what you can do and why your project will be successful, you may find that you’re quickly in the money.
Speed of Transaction
When you’re dealing with a capable private lender who knows you, you may be able to get money transferred in no time. With traditional options, you will face a mountain of paperwork. That is usually not the case with private loans. If you are skilled at selling yourself and your process, a savvy private lender will jump at the chance to work with you. As is the case with any loan, be aware that hard money loans and other personal loan types will often come at a higher interest rate. Use this knowledge as motivation to fix and flip the home quickly so that you lessen the duration and cost of the debt.
Since your first private loans will come from family, friends, or business associates, you will build your reputation by successfully flipping a home and getting them a lucrative return on their investment. In time, you will be able to attract other investors who want in on the action. As your brand becomes more valuable, you will see the terms and interest rates demanded by private lenders decrease. You may even find that other qualified professionals in the field will seek to partner with you, adding a wealth of funds and wisdom to your team.
Loans for fixing and flipping are a necessary step in the process. If you open up to the possibility of private loans, you can establish a quick and fluid way to fund your operation.