Flipping houses has become an increasingly popular trend as of late. Since home prices are already very expensive, many people are choosing to buy affordable fixer-uppers that they can transform into a much more valuable property, either to live in or to sell for profit.
However, the cost of flipping a house can be expensive on its own – you’ll need to pay for materials and contractors to help you with the process. If you plan on selling the house right away, there’s also the cost of putting it on the market and staging it. Here’s how to get the funding you need to flip your house.
Look for lenders that specialize in house flipping
It can be difficult for house flippers to get the capital they need for their projects, particularly if they are inexperienced. Many lenders and other financial institutions will not give out traditional loans to house flippers, so you’ll need to find a specialist. At Key Capital, we offer that specialized service up-front, to support house flippers to get the funds they need to do the job properly.
As lenders, we provide what is known as ‘hard money’ loans. Hard loans usually have very short borrowing periods, often less than a year. However, this loan doesn’t need to be paid until your house flip is complete, which is one of the significant benefits of working with a lender like us. It’s worth noting also that if you’re new to house flipping, you may have to pay higher rates than those who have more experience.
Funding with renovation included
When it comes to flipping a property, funding can often be the biggest up-front concern. But funding can be chosen to cover the cost of renovations in addition to the cost of the property itself. This means up to 100% of your renovations will be covered as part of your funding, so you don’t have to find that additional cash following a house sale. By picking a form of funding that includes renovations – valued ahead of time – you can ensure you have all you need to flip your house through one funding source.
Private lenders may be an option
There are many high net worth individuals out there that are willing to provide private loans to house flippers. Many small real estate companies also consider themselves private lenders. Private lenders are a great option if you’re flipping a house because they can often provide lower rates and payment structures that work for your needs. If you’re interested in working with a private lender, make sure to get references from other borrowers who have worked with them, just to make sure they are legitimate.
If you have great credit and have extensive experience flipping houses in the past, you may be able to get a traditional mortgage to flip a house. However, most people will need to look for other avenues to fund their house flip. It’s important to consider all of your funding options before making a final commitment. Get in touch with our team at Key Capital today to discuss how our financial services could help support your house flipping business or project today.