A Beginner’s Guide to Fix and Flip Loans

A fix and flip business in housing can be very very lucrative, but it can also be very difficult to get started since traditional mortgage loans are sometimes not available for startups of this type. However, securing mortgage loans is still one of the two primary ways to finance your fix and flip business, the other being financing which comes from friends, relatives, and other private lenders who are interested in your success.

Fix and flip mortgage loans

  • Under some conditions, it is possible to secure a mortgage loan for your fix and flip operation, especially when some of the following are true:
  • You happen to have significant personal assets which can be used as collateral
  • You actually intend to reside at the purchased house, at least for a long enough time to implement the repairs which are needed
  • You have solid equity in some other property which can be used as collateral to finance the current property
  • You have solid company experience with a track record that points to successes in the past, including reputable partners, a good business plan, and other sources of income

Unsecured lines of credit remain a viable possibility if you’re able to obtain them without pledging any personal assets as collateral. For instance, if you can get a business credit card to use for financing new properties, that may supply the bulk of the funding you need.

Fix and flip private loans

In order to secure funding through family, friends, or private lenders, sufficient to support your fix and flip housing business, there are several approaches you can take:

Be networking constantly, and get as involved as possible in the local real estate community. This will help you to meet the potential investors and private lenders who may then become acquainted with your operation and recognize how committed you are

Try to find private lenders who are willing to contribute to your operation, because funding can be much faster than with any traditional bank loan, and this will give you a flexibility advantage over rivals

Emphasize the value of the houses you intend to flip to private investors, so they can see the advantage of partnering with you and providing funding. You can make this into a form of asset-based lending by having a formal agreement with investors, wherein they take over desirable housing assets if you should default on payments.

Once you’ve established yourself in the fix and flip market, you may be able to convince some private lenders to fund your purchases without you having any personal equity involved at all.

Securing Funding for Real Estate

If you’re in need of funding for your next real estate project, contact the professionals at Revap Group Capital, and have our funding specialists work with you on ways to finance your project. No project is too big or too small, so please call us with any inquiries you may have, or to describe your financing needs.

SHARE IT: LinkedIn