24 Aug How-To: Funding For Flipping Houses
HGTV makes flipping homes look easy, fun and rewarding. While “easy” isn’t how most experienced house flippers describe the process, renovating and selling flipped properties is most definitely fun and rewarding — that is, if you have the financing needed to actually accomplish a flip. And now is a fantastic time to flip homes, regardless of if it’s your first flip or 100th.
In many ways, the housing crash of 2008-2009 seems to be a distant memory, as house flipping has reached its all-time peak in 2019 for many markets, according to ATTOM Data Solutions. A decade of rising home prices, low interest rates and an expanding economy has made fertile ground for those looking to make a quick profit by rehabbing and selling homes quickly.
While the house flipping trade can indeed be lucrative, it requires one thing above all: capital. Much like the traditional home-buying process, investors looking to flip properties need funding for the purchase price of the home, property taxes, utilities and insurance costs until the day the property sells. However, flippers also need money to rapidly rehab the property and prepare it for sale.
To cover those costs, most fix and flip investors need a loan. However, unlike in the pre-2008 era, when it seemed like anyone that could sign their name could get a housing loan, lending standards have tightened up in 2019. Additionally, loan rates are typically higher on a fix and flip loan than a standard mortgage, as lenders view these loans as riskier.
The good news is there’s generally a solution if you’re looking for fix and flip financing, whether you’re a first-time flipper or an experienced veteran with fantastic credit. Here’s a look at the top seven financing options for fix and flip investors, including average rates and tips for success.
By: John Csiszar