Fixing and flipping property is one of the easiest ways for investor to make money. This strategy entails buying property such as a condominium unit or a house, fixing it up, then selling it again. Of course, one will be needing some fix and flip real estate funding to do that so here are some of the best options that one can consider if he or she plans to do this.
The first option would be to get a hard money loan. This is probably the most common option that most flippers would use in order to finance their endeavors. It is a type of short term loan that investors would use if they only plan to keep the property for at least a year and then sell it off quickly right after.
For those interested in taking up this sort of loan, he or she will notice that the approval time would only take about two weeks. After one gets the money in his or her palm, then the holding period will be only about one or three years, which is more than enough time to do up a piece of property. One of the cons is the high interest rate, but if the ROI of the endeavor is high, this should not be a problem.
In order to get this loan though, one has to have certain requirements like a good credit rating of around five hundred and a good income to debt rate. The income to debt rate should be around thirty five percent and it is also required that one has an experience of around three years in the real estate business.
Another type of option is known as the equity line of credit wherein there is the home line of credit and property line of credit. The home line is a type of long term credit line that is fixed while the property line of credit is based on the loan amount. In a nutshell, it works like a credit card but used for a term period and for the fixing and flipping of the property.
For the home credit line, the approval does take longer than the hard money loans with approval times reaching up to a month. As for the interest, it is not so high ranging from four to five percent. As for the requirements, credit rating of six hundred and above, an income to debt ratio of five percent, and a property equity of thirty percent is needed.
As for the property line of credit, term would be twenty four months with thirty days approval time. The rates would reach up to eight percent but can be as low as five percent. For requirements, a credit score of six hundred sixty is needed, a debt to income ratio of forty five percent, and an existing equity of forty percent in property.
For those who are interesting in fixing and flipping property, it is always best to take up loans for the project instead of using ones own money. If one wants to take up a loan, then here are the options that one would have for this. Consider these three options when venturing into the fix and flip business.
The first option would be to get a hard money loan. This is probably the most common option that most flippers would use in order to finance their endeavors. It is a type of short term loan that investors would use if they only plan to keep the property for at least a year and then sell it off quickly right after.
For those interested in taking up this sort of loan, he or she will notice that the approval time would only take about two weeks. After one gets the money in his or her palm, then the holding period will be only about one or three years, which is more than enough time to do up a piece of property. One of the cons is the high interest rate, but if the ROI of the endeavor is high, this should not be a problem.
In order to get this loan though, one has to have certain requirements like a good credit rating of around five hundred and a good income to debt rate. The income to debt rate should be around thirty five percent and it is also required that one has an experience of around three years in the real estate business.
Another type of option is known as the equity line of credit wherein there is the home line of credit and property line of credit. The home line is a type of long term credit line that is fixed while the property line of credit is based on the loan amount. In a nutshell, it works like a credit card but used for a term period and for the fixing and flipping of the property.
For the home credit line, the approval does take longer than the hard money loans with approval times reaching up to a month. As for the interest, it is not so high ranging from four to five percent. As for the requirements, credit rating of six hundred and above, an income to debt ratio of five percent, and a property equity of thirty percent is needed.
As for the property line of credit, term would be twenty four months with thirty days approval time. The rates would reach up to eight percent but can be as low as five percent. For requirements, a credit score of six hundred sixty is needed, a debt to income ratio of forty five percent, and an existing equity of forty percent in property.
For those who are interesting in fixing and flipping property, it is always best to take up loans for the project instead of using ones own money. If one wants to take up a loan, then here are the options that one would have for this. Consider these three options when venturing into the fix and flip business.
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