The home improvement shows on the cable tv channels are so popular a lot of people are considering buying investment real estate for the purposes of fixing and flipping it. Their reasoning is that you can make plenty of money when you buy low, make a few repairs, and sell high. The biggest hurdle to actually starting a real estate investment career is the lack of capital. It's hard to get approved for the fix and flip loans Seattle investors initially need. If you are determined to try this, you'll have to think outside the box.
After you have found the house you want to buy, renovate, and resell, you have to figure out how to pay for it. There are basically four parts to the loan you need. The first is the purchase price. You will need twenty to forty percent down payment in cash.
You have to borrow enough money to pay for the holding costs, like insurance and homeowners fees, while the house is under renovation. You will need money to buy your materials and to pay for labor. Finally you have to pay the real estate commission and some closing costs.
Since finding a bank to lend you the funds you need is going to be difficult, the best bet may be to come up with something more creative. If you are a first time flipper, you might want to discuss your project with family and friends and offer them part of your business in return for financing your first house. If you can get a family loan, you want to put everything in writing, including the interest rate and the length of time you've got to repay the loan. Most of the time, the borrower doesn't pay anything during the renovation, but starts paying back the loan, with interest, once the house is sold.
If you have the know how, but not the cash, you should consider finding a money partner. These types of arrangements have one partner handling the real estate purchase negotiations, remodeling, and the resale. The other partner is the financier. This works well as long as everyone sticks to the bargain.
A home equity line of credit is a possibility if you own a home. This only works if you have some equity in the house, and it's your primary residence. With a line of credit you can use the money at your own discretion.
The only interest you pay is on the money you actually use. Most lenders will loan up to eighty-five percent of the home's value after deducting the outstanding balance. This often is not enough to complete a project. If it is not, you will need another financial resource.
Investors who have retirement savings accounts might consider borrowing from them. This is not recommended for flippers nearing retirement however. You may also consider a personal loan, if you don't need much money and are able to pay off the loan in a short period of time.
After you have found the house you want to buy, renovate, and resell, you have to figure out how to pay for it. There are basically four parts to the loan you need. The first is the purchase price. You will need twenty to forty percent down payment in cash.
You have to borrow enough money to pay for the holding costs, like insurance and homeowners fees, while the house is under renovation. You will need money to buy your materials and to pay for labor. Finally you have to pay the real estate commission and some closing costs.
Since finding a bank to lend you the funds you need is going to be difficult, the best bet may be to come up with something more creative. If you are a first time flipper, you might want to discuss your project with family and friends and offer them part of your business in return for financing your first house. If you can get a family loan, you want to put everything in writing, including the interest rate and the length of time you've got to repay the loan. Most of the time, the borrower doesn't pay anything during the renovation, but starts paying back the loan, with interest, once the house is sold.
If you have the know how, but not the cash, you should consider finding a money partner. These types of arrangements have one partner handling the real estate purchase negotiations, remodeling, and the resale. The other partner is the financier. This works well as long as everyone sticks to the bargain.
A home equity line of credit is a possibility if you own a home. This only works if you have some equity in the house, and it's your primary residence. With a line of credit you can use the money at your own discretion.
The only interest you pay is on the money you actually use. Most lenders will loan up to eighty-five percent of the home's value after deducting the outstanding balance. This often is not enough to complete a project. If it is not, you will need another financial resource.
Investors who have retirement savings accounts might consider borrowing from them. This is not recommended for flippers nearing retirement however. You may also consider a personal loan, if you don't need much money and are able to pay off the loan in a short period of time.
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Get a summary of the things to keep in mind when taking out fix and flip loans Seattle companies offer at http://www.privatecapitalnw.com/fix-and-flip-rehab-loans right now.
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