In 2017, more than 207,000 homes were flipped by contractors.
This was the record high, as flipping homes for a living is becoming a more popular career for independent contractors. If you’re interested in flipping homes but you don’t have enough money to buy one upfront, it’s time to look into a fix and flip loan.
Keep reading to learn more about these types of loans!
What Is a Fix and Flip Loan?
Flipping houses is a popular way to make money for people who are good at remodeling.
While you can make a pretty big return on flipping a home and selling it, not everyone can afford to buy the home they want to flip. This is where the fix and flip loan comes in.
A fix and flip loan not only covers the purchase price of the home but the cost of renovation as well.
How a Fix and Flip Loan Works
When you get a fix and flip loan to renovate a property, you’ll typically pay it back faster.
Since you’re selling the home after you fix it up, you can use the funds from the flip to pay back the loan. Since fix and flip loans are typically paid back faster, the interest rates are also higher.
Where Can You Find a Fix and Flip Loan?
There are a variety of sources that you can get your fix and flip loan from.
Many prefer to use a private lender, as lenders typically have more options for your loan. This enables you to find the best loan for your project and financial situation.
If your credit score is high enough, you may be able to get your loan from your bank. This isn’t very common, as banks are pretty picky about who they’ll give a these types of loans to.
Lenders don’t require as high of a credit score, which is another reason why they’re popular for these kinds of loans.
How to Qualify for a Fix and Flip Loan
Before a lender will provide you with the funds to move forward with the renovation, they’ll want to see that you’ve saved a bit for it.
Each lender will require a different percentage down, however, you should expect to put at least 15% down on the house. Also, you should have a plan and project timeline for the renovation. Your lender will want to see that you have a plan and an estimate for when they’ll receive their money back.
Lastly, your lender will want to see some sort of successful history with flipping homes. This is why it’s helpful to create a portfolio as you flip houses. The portfolio will document your earnings flipping houses as well as your skills.
Are You Ready to Apply for a Fix and Flip Loan?
If you’re ready to start renovating your fixer-upper, don’t hesitate to ask for the help you need!
A fix and flip loan will give you the funds you need to move forward. To learn about our loan options, reach out to us today.
Can you flip a home with no money ? The answer is YES!