Top 3 Loans for Flipping Houses
Looking to flip a house but not sure where to get the financing? When you work with a hard money lender like First Funding Loans, you can obtain financing to fund your fix and flip project. Hard money lenders are more flexible with their loan qualifications compared to conventional banks, and they offer quick financing that allows you to be competitive when buying investment properties.
Below are your three top loan options for flipping houses. Be sure to ask your hard money lender about the benefits of each one and which is right for your situation.
1. Fix and Flip Hard Money Loan
This type of short-term loan is secured by real estate and used to purchase and renovate a property. Fix and flip loans are a great option when you're looking to purchase, renovate and sell the property in one year. This will give you enough time to pay off the loan and invest in a new property, if you choose.
Fix and flip loans are attractive to investors because they can obtain financing within a few weeks or less. You can also use the money to rehab the house, something that conventional banks do not encourage.
2. Fix and Flip Cash-Out Refinance
Another option you have is to refinance an existing property you own and use the cash to finance your rehab project. You can use this cash however you'd like - there are no restrictions. And, interest rates tend to be lower on these loans compared to short-term hard money loans.
However, there are a few things to know about cash-out refis. First, you must have a property with equity. Second, all existing liens on the property must be paid off. Third, cash-out refis take longer than hard money loans, so be sure to build this time into the process.
3. Ground Up Construction Loan
A Ground Up Construction Loan can be useful for a contractor or investor that owns shovel-ready land or plans to buy land and is looking for financing for the acquisition and construction of the project. This type of loan consists of interest only payments and can range in loan amounts from $100,000 to $5,000,00 with First Funding Loans. Through this type of loan, we are able to step in where the banks are unwilling to lend, and work with trusted investors who aim to take on their projects.
Fix and flip loans can be confusing at times, but we assure you that there are good options for your specific situation. To learn more about the flexible and affordable lending options through First Funding Loans, contact us today.