Flipping a house may seem like a quick and easy way to make a profit, but if you have not thought about the bigger financial picture you should spend some time figuring out if you can afford to fix and flip before you jump into the project.
Usually, a fix and flip is relatively affordable up front because you are purchasing a lower value home. It is not as expensive as buying a home in better repair, but you do need to invest money – and sometimes a lot of it – into the repairing part of a fix and flip.
Typically it is a good idea to use actual cash for your down payment. This saves on fees and interest charges, leaving you more renovation money and less strings attached.
One of the first things you should do is consider just how much work needs to go into the home. Make an extensive list of needed repairs and research various options for each fix. You should have a budget in mind based on how much you can afford to spend to still be able to turn a profit.
If your project is realistic but you do not have the money immediately on hand, a construction loan can make a fix and flip doable instead of just a dream. Home construction loans can give you a boost, with a short term duration and quick closing. Through private lenders, construction loans can move very swiftly, allowing you to get to work right away in fixing up the home. Because your construction loan will not be bogged down by a traditional bank, you can finish your project with time to spare, pay back your private lenders, and enjoy the profit from your hard work.
Private lenders who specialize in construction loans for fix and flip projects know exactly what renovators need to fill gaps in their budgets and finish a repair project on time, so it is definitely worth investigating the option of home construction loans to make your house flipping affordable.
Flipping a house can be far more affordable than you had ever imagined, but it takes dedication and an ability to deal with numbers and figures. Set your budget, stick to it, and seek out assistance from private lenders, and you should have no problem turning your fix and flip into a great cash infusion.
If you are considering a property rehab project and need funding, Center Street Lending can make it happen. We lend in AZ, CA, CO, UT, TX, FL, MD, VA, NC and WA up to 80% of the property purchase price as well as 80% of your anticipated rehab costs. Give us a call today at 303-521-7622, or request a no-obligation quote online. We use a simple, streamlined process, and can fund your project in as little as 24-hours!