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Originally Posted On: https://constructionspecloans.com/flipping-houses-101-loans-for-flipping-houses/

The real estate market across the country is hotter than ever. Many home flippers are getting in on the pent-up demand. From the application requirements to what your loan options are, we’ve rounded up everything you need to know about loans for flipping houses.

Whether you’ve flipped 100 houses or are just getting into the game, think of this as your go-to flip loan guide. We’ll help you get the financing you need to get your investment property flipped and sold quickly.

What is House Flipping?

House flipping is when you purchase a home with the intent of fixing it up to sell. The goal is to buy the home as an investment, renovate or fix it and then sell it for a profit. While you may live in the home, more than likely it’s an investment property that is separate from your primary residence.

Can you Flip a House Without Cash?

Whether you’re a professional house flipper or a first-time investor, it’s normal to have questions about capital. If you’re low on cash or prefer not to use your personal cash to fund your investment, there are options out there to help you with a fix and flip loan.

As with any investment, there are a few ways you can pay for your house flip. To start, you can get a mortgage for all or part of your home purchase. You can choose a mortgage based on interest, fees, and terms that are most favorable as a short-term option.

Once you’ve purchased your home, if you decide to use a loan for the renovations, you can do so. You may also prefer to use cash to fund your investment and make the renovations. A combination of the two is often a popular choice. A fix and flip loan gives you more flexibility and breathing room.

Are There Loans for Flipping Houses?

If you’d prefer to use a loan for your house flip, there are financing options available to you. A fix and flip loan, for example, gives you the opportunity to borrow money in order to renovate and flip your investment property. One of the best parts of having a loan to help you flip your home is that it leaves your other capital free. You can use your cash reserves to help you buy your next flip, but it might limit your options. With a flip loan, you can finance all your renovations and home projects. You’ll be able to finish the home, sell it, and pay off your loan. You’ll be on to your next flip with your loan paid back and your profits in your pocket.

Home Flipping Loan Requirements

The requirements for flip loans are different than with traditional mortgages. While we won’t verify your income and check for proof of employment, we will be looking at other criteria. If you’ve flipped homes in the past, we can take a look at your portfolio of homes sold. We’ll look at what homes you’ve sold, how you renovated the homes, and what your profits have been. We’ll also want to take a look at the home you’ve purchased and what improvements you’ll be making. Contractors that are bonded and insured must be used as well.

Proof of insurance will help us grant you access to financing and make sure the project is secured. Without traditional loan requirements, you’ll be approved a lot faster than with other banks. We know that you need to fix and sell your home quickly. Using a traditional bank could stall your work for months, but you will be building ASAP with our fast qualification process!

Are There Fix and Flip Loans for Beginners?

If you’re just starting out in the flipping business, we’d still love to hear from you. With a small project and a small scope of work, we may be able to offer you funding to get you started. Even if you’re just painting and putting in new floors, we have loan options to help you.

For all our loan options, we’ll verify your credit history. We’ll also make sure your contractors are all licensed and that the proper insurance policies are in place.

Maximizing Your Fix Flip Loan

To maximize your flip loan, you’ll want to come prepared with your project list, plans, drawings, budgets, and contractors. The more you have completed ahead of time, the smoother the process will go. This will also help us determine what the best loan amount would be. Our fix and flip loans max out at $500,000.

To get the most for your flip, do plenty of homework in the surrounding area. For instance, single-family homes qualify for our loan. Doing some research about the area can help you determine where the best places are to flip. You’ll get more for your property in a good area with amenities and great nearby schools. Spend the time to take a look at other comparable properties. See what renovations have been made, what they have sold for, and how long properties were on the market. Looking at these trends will help make sure you don’t overspend for the area. It will also help you maximize your flip loan and get your home sold quickly.

Start Your Application Today

If you’re ready to tackle your next home flipping project we’re here to help. We have loans for flipping houses with a variety of options. No house or flip is the same and we’ll help find the best loan option for you.

To learn more and to start your application, fill out the contact form here. You’ll be put in touch with a flip loan professional that’s ready to help you grow your real estate business.