Where can real estate investors find the money to flip houses this year?
The US real estate market is surging again. Home sales hit a new 10 year record in January 2017 according to NAR and Inman. Yet, it still takes money to make money. So, where can investors find the capital to get started, expand, and make the most of the opportunities?
Lines of Credit & Personal Loans
Despite all of the gurus proclaiming the ability to flip houses with no money and no credit, investors will find they run into expenses. They may find 100% financing for property deals, but there is still due diligence, gas money, and marketing. Personal or small business loans and lines of credit can provide essential working capital, and the flexibility to use it for everything from launching a real estate startup to rehabbing homes. Do expect lenders to demand a reasonable credit score, and normally an existing LLC or business entity to have already been set up for those seeking commercial funding.
Blanket Mortgages
For those who already own portfolios of income properties free and clear, or with significant equity a blanket mortgage can help. These mortgage loans can be used to leverage equity from part or all of a portfolio to bridge out and acquire more property. It provides liquidity to act as a cash buyer, with the simplicity of one set of loan documents.
Commercial Conduit Lenders
A new breed of mortgage brokers and conduits are setting up shop, and are aggressively marketing themselves to investors. They may offer lines of credit, blanket loans, and short-term fixed rate mortgages for rehabbing properties. Many now offer stated income loans. Most still expect significant skin in the game from investors, and often want to see a recent track record of successful acquisitions and exits.
Transactional Funding
Transactional funding lenders provide short-term funding for real estate wholesalers. This is typically 100% financing for back to back house flips. Often no appraisals, credit, or income verification is required. It’s fast and easy to get, and rates can be lower than hard money.
Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.
"I want thank you for the excellent service I received from Best Transaction Funding.The quick response I received from your company from the beginning of the transaction and to the end was unbelievable. I also want to give a special compliment to you as well. You went to great lengths to keep me informed and gave my title company all the information they needed to complete a successful closing. I cannot express how thankful I am. Such service builds great working relationships. I will definitely recommend Best Transaction Funding to all my fellow investors. Thank You."
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