Even if you are going into real estate investing flush with cash or planning on using no money down, investing strategies loans can help you gain leverage to do a higher volume of deals and will help you to turn around properties faster. So let’s look at 5 loan programs which can help you flip more homes in less time.
Lines of Credit
Lines of credit can be a great way to finance your real estate deals. They are normally low cost and mean that you only have to pay interest on exactly what you need, while having access to flash funding when you need it. Choose from Home Equity Lines of Credit (HELOCs), personal secured or unsecured lines of credit or if you already own commercial property or a large portfolio of land or single family homes you my be able to get a line of credit based on your equity in those properties.
FHA 203 (k) Loans
203 (k) loans are perfect for taking on handyman specials. They can be used to fund purchases and provide repair money in one loan. This is great if you are buying rental properties to hold onto. If not you can recommend them to buyers you are flipping houses to so that they can do their own improvements and choose the materials they want for flooring, counter tops, etc. This can dramatically lower your risk and shorten your cash cycle.
VA mortgage loans may not be the first type of financing that comes to mind for investors but it can become one of their best tools. If you can flip your homes to retail buyers who qualify for VA loans they are able to obtain 100% financing. This means being able to sell your deals for top dollar and tapping into a vast pool of buyers who don’t need to come up with down payments.
Hard money loans offer fast, equity based financing and in some cases repair funds. However, while there is less paperwork involved than a conventional mortgage loan be prepared for high interest rates and lots of points. Also note that hard money lenders have seriously tightened up their criteria in the last few years. They now do credit checks, appraisals and often require income and asset information.
Transactional funding is certainly the most attractive option for most real estate investors today, especially those who are focused on flipping houses. The best transactional lenders will now loan up to 100% of the purchase price plus closing costs for investor’s acquisitions. Best of all they require no credit checks, no appraisals and no income or asset verification.
By Robert Charlson