Every year, there are more than 200,000 American homes that are “flipped.” These homes are purchased for a relatively low price, fixed up, and then sold for a profit by those who specialize in flipping houses.
If you’re thinking about trying to fix and flip a house, one of the challenges you’re going to face is coming up with the funds to buy it in the first place. Even though the house will be available for well below market value, you’re still going to need to come up with a nice chunk of change to buy it.
Here are five ways to find funding for flipping houses.
1. Use Your Own Personal Savings
Do you happen to have a bunch of money stashed in your savings account? Rather than seeking financing for flipping houses, use your own money to fix and flip a home.
The big advantage of doing this as opposed to taking out loans for flipping houses is that you’ll make more money in the end. You won’t have to pay the fees associated with most loans and cut into your profits.
2. Ask a Family Member to Lend You Money
You might not have tens of thousands of dollars set aside in your bank account. But maybe one of your closest family members does.
If you feel comfortable doing it, ask them if they would be interested in extending financing to you. In return, you can agree to share a cut of whatever profits you make when you flip a house.
3. Turn to an Investor for Financial Help
The fix and flip industry is bigger than it’s ever been before. As a result, there are a lot of investors popping up and offering to lend reputable flippers money in exchange for a portion of their profits.
Take a look around and see if you can find investors who might be willing to provide you with the funding you need.
4. Take out a Traditional Home Loan
There are all sorts of rules that surround using a traditional home loan to flip a house. You want to avoid breaking these rules at all costs when you take out a traditional loan in the hopes of using it to flip a home.
But you might be able to do it without a problem. Talk to a traditional lender about your desire to use a home loan to flip a house. They’ll let you know what is and isn’t allowed when it comes to doing it.
5. Apply for a Fix and Flip Loan
If you’re not able to take out a traditional loan to flip a house, there are a number of fix and flip loans you can use instead. They’ll make it possible for you to borrow as much as you need to flip a home.
Just make sure you find one with the right terms and conditions attached to it. It’ll help you avoid paying too much to take out a loan to flip a house.
You Can Fix and Flip a House and Make a Lot of Money in the Process
If you know what you’re doing, then buying a home, fixing it up, and flipping it is one of the best ways to make money. You can often turn a sizable profit in a matter of just a month or two in many cases.
But before you’re able to do it, you’ll need to obtain fix and flip financing. Give one of the methods found here a try to get your hands on the money you need.
Read our blog to learn about other types of loans you can take out.