Investors are making money flipping houses and securing their financial future. House flipping is the process of buying homes in poor to fair condition, renovating them, and quickly putting them back on the market to sell for a greater return. If you’re interested in flipping real estate but don’t have the cash to invest upfront, you need a lender or private investor.
The obstacles flippers run into is not being able to find financing. Traditional lenders aren’t eager to lend to house flippers, which is why many first-time and seasoned flippers turn to hard money lending.
Hard money loans make purchasing investment properties easier, but most newbie investors haven’t heard of these helpful products. Keep reading to learn more about how these loans work and why they could help you achieve your real estate investment goals.
What Are Hard Money Real Estate Loans?
At first glance, hard money lending isn’t much different than any other real estate loan. Flippers apply for financing and repay the loan over the course of a set period. However, hard money loans have different requirements, and most importantly, benefits.
Here are some of the differences:
- Traditional loans require the home to secure the loan.
- Hard money lenders let you use other real estate as collateral.
- You don’t have to collateral that equals the full value of the property.
- Lenders of hard money loans have access to the homes equity in case you don’t pay back the loan.
Reasons to Use Hard Money Lending for Entering the Real Estate Market
There are several reasons to choose hard money lenders for flipping homes, especially if you have any of the following obstacles.
- Credit problems: Not everyone has stellar credit, but why should your credit score hold you back from making money? It shouldn’t and hard money loan products consider other factors, not just your credit score. These lenders work with individuals, not credit scores.
- Proof of income: If you’re self-employed, make too little money, or have other issues that affect income eligibility requirements for traditional loans, you’ll have a better chance of securing financing working with hard money companies. These companies don’t require proof of income.
- Property condition: Banks want to finance homes that are in good condition because it’s less risky for them. However, this doesn’t help house flippers. In fact, it’s a huge obstacle. It’s the reason many investors, even those with great credit and proof of income, choose hard money lenders. These lenders know investment properties need work and don’t hold it against you when applying for a loan.
- Time restraints: Anyone who has ever flipped a home knows that timing is everything. To make the most money from your investment, you need to get in and out fast. That means you don’t have weeks or months to wait for loan approval from a regular bank. You need fast financing, which is exactly what you get with hard money products. The approval and funding process is done most of the time within 7-14 business days.
Are you ready to start flipping homes with hard money loan financing? Learn more about the process and find the best hard money lending in Houston. Contact the hard money pros at Investor Loan Source at https://ils.cash and apply online.