Got a fix and flip project on your mind? Investing in a fix and flip starts with the financing- these types of investments are not typically eligible for traditional bank loans.
How Will you Finance Your Next Fix and Flip Project? Here are Some Suggestions:
Hard Money Lender
If you have investment experience, you might finance your project with a hard money loan from an investor in your company. That is, you may be able to acquire money from non-bank lenders, though you may pay more in interest. These loans also are more forgiving in terms of credit history, but they may have shorter repayment terms, too.
Another option is to refinance an existing piece of property for your fix and flip venture. Do you own your own home? If you have built enough equity, you might be able to refinance or borrow against the value of this property. Talk to a lending professional to learn more.
Home Equity Line of Credit
Along the same lines, if you own a home with some equity, you might be able to use a home equity line of credit to temporarily get you over the hump. The interest rates are usually lower than conventional loans since they are secured with collateral- your home!
Depending on who you are buying the fix and flip from, you might be able to work out a seller-financed arrangement that includes a payment plan. There are always risks involved so the interest rates could be higher with a shorter repayment term.
A bridge loan fills the gap when you are short on money to put down on your fix and flip. While it likely won’t cover the entire financing, it can help you when you come up short on your investment.
Business Line of Credit
Do you have a business line of credit? This could be enough to finance your fix and flip. Usually, this involves a revolving line of credit for your business, which is great for unexpected emergencies and opportunities.
Got questions about financing your next fix and flip? Talk to the industry professionals at Rexford Commercial Capital, to learn more today.