Hard Money Loans: A House Flip Financing Solution
A hard money loan is your solution to for house flip financing. Flipping properties is a great way to make money in a short period of time. But who has the money to start buying and flipping homes? You don’t have to wait until you make the money yourself or it may be years until you actually have enough to start. While you’re waiting and your money is sitting in a savings account, you could be investing in real estate and making big money.
Most fix-and-flip loans are financed by hard money lenders. Why? Because hard money lenders lend money based on real estate—a hard money loan is just a short-term loan secured by real estate. The hard money lender looks at the property you want to invest in and they will look at your investment plan (including repair, maintenance, and closing costs) and then determine whether or not they will fund the deal.
If you’re still unsure about using a hard money loan, it’s important to remember that a fix and flip loan is a short-term loan. It could be anywhere between 5 to 12 months. This is the kind of loan that you will not get from a bank. If you have a structured investment plan and correctly calculate the amount of money you’ll need, you should be able to pay back the note without a hitch and make a lot of money in the process.
Another benefit of a hard money loan is that you can be approved quickly and it can be funded in a matter of days. This means that you won’t miss out on any opportunities and you can buy properties quickly. Also, sellers like selling to buyers who are using hard money loans.
Traditional financing can be difficult to obtain because of strict regulations and crowd funding can take too long to put in place. If you are flipping property, hard money is your best option.