Buying an old or neglected real estate property, and then fixing and flipping it is a profitable venture that has gained popularity over the years. Reality TV shows and other individuals who’ve been successful in this business are setting a cultural trend that’s driving demand for such properties and creating new opportunities for budding entrepreneurs. However, flipping properties is serious work, and a key component to succeeding in this business is access to capital. If you don’t have enough funds but are interested in rehabbing a property, a fix and flip loan from a trusted hard money lender could be a great financing option.
Fix and flip loans are designed in a manner that allows buyers to get the property in the quickest way possible and have access to a reserve of funds for renovation and construction expenses. Here are three key benefits of these real estate loans.
Fast Approvals
Getting a real estate investment loan in Arizona is far quicker when compared to a traditional financial institution. The application process involves a smaller amount of paperwork and easy to understand provisions. The lender is interested in the project and not just on the person they are lending to. The loans give more focus on the real estate market rather than the personal resources and credit history of the applicant. This makes it easy for the private money loan to be approved within a few days, which is not the case with a traditional banking system. With this, real estate flippers can get the money needed to bring out a property’s real potential and sell it for significant profits.
Fix and Flip Loans Fund Any Property
There is no limitation on the type and state of conditions of a property in order for an applicant to qualify for fix and flip loans. Hard money lenders in Arizona offer the flexibility and agility needed to execute purchases and renovate the property. You will need to find a hard money lender willing to fund the project regardless of whether the property is owned by a bank, a foreclosure, a short sale, or in a dilapidated state. Traditional banks are risk averse and have strict rules regarding the type of property they can fund.
No Prepayment Penalties
Usually, when you borrow a loan from a traditional bank, you may be penalized if you pay it off before its maturation date. This is referred to as prepayment penalty. Most fix and flip private money lenders won’t subject you to this penalty.
Ready to rehab a property but falling short on finances? Capital Fund 1 has funded dozens of fix and flip projects to different borrowers in Arizona, including those with less than perfect credit scores. Contact us for financing help.