One of the best ways to make some hard cash through property or real estate would be fixing and flipping. With this activity, one will be buying a unit or a house, doing it up until it looks really good, and then sell it again. Now, if one would do this, then he or she must first look for a source of fix and flip real estate funding to finance it.
The very first and probably most popular option for financing fixing and flipping projects would be the hard money loan. This happens to be the most popular simply because it is the easiest to acquire. It is a short term type of debt that is ideal for condo flipping wherein the holding period is only a year or less.
Now, the great thing about hard money loans is that they are extremely quick to process right after application. It is actually possible to get the money from the loan in just fifteen days after application since it is a short term loan of one to up to three years. The interest rate is pretty high though, ranging from seven percent to twelve percent depending on the lender.
To acquire this type of loan though, one will need to present his or her credit score, experience in flipping, and debt to income ratio. First, a credit score of a minimum of five hundred and fifty is needed with a debt to income ratio of thirty five percent at least. Finally, two to three years experience is needed in flipping properties.
The other choice would be the equity credit line consisting of the home credit and the property credit lines. The home equity line is a long term debt that has a fixed number of years depending on the agreement between the borrower and the lender. The other type is a more short term kind of loan wherein the term depends on the loan amount.
Now, it would take a while for approval of a home line of credit, possibly up to 45 days. As for rates, it would range from around four to five percent depending on the lender. Also, one is required to have a credit score of six hundred forty and above, a debt to income ratio of forty five percent, and a minimum equity of thirty percent in property.
The second type is property equity which is a shorter term loan of around two years. The interest rate is pretty high like the hard money loan reaching up to ten percent depending on the lender. Aside from that, expect the figures to be higher than the requirements of the home equity credit since this is a short term debt.
For those who are interesting in fixing and flipping property, it is always best to take up loans for the project instead of using ones own money. If one wants to take up a loan, then here are the options that one would have for this. Consider these three options when venturing into the fix and flip business.
The very first and probably most popular option for financing fixing and flipping projects would be the hard money loan. This happens to be the most popular simply because it is the easiest to acquire. It is a short term type of debt that is ideal for condo flipping wherein the holding period is only a year or less.
Now, the great thing about hard money loans is that they are extremely quick to process right after application. It is actually possible to get the money from the loan in just fifteen days after application since it is a short term loan of one to up to three years. The interest rate is pretty high though, ranging from seven percent to twelve percent depending on the lender.
To acquire this type of loan though, one will need to present his or her credit score, experience in flipping, and debt to income ratio. First, a credit score of a minimum of five hundred and fifty is needed with a debt to income ratio of thirty five percent at least. Finally, two to three years experience is needed in flipping properties.
The other choice would be the equity credit line consisting of the home credit and the property credit lines. The home equity line is a long term debt that has a fixed number of years depending on the agreement between the borrower and the lender. The other type is a more short term kind of loan wherein the term depends on the loan amount.
Now, it would take a while for approval of a home line of credit, possibly up to 45 days. As for rates, it would range from around four to five percent depending on the lender. Also, one is required to have a credit score of six hundred forty and above, a debt to income ratio of forty five percent, and a minimum equity of thirty percent in property.
The second type is property equity which is a shorter term loan of around two years. The interest rate is pretty high like the hard money loan reaching up to ten percent depending on the lender. Aside from that, expect the figures to be higher than the requirements of the home equity credit since this is a short term debt.
For those who are interesting in fixing and flipping property, it is always best to take up loans for the project instead of using ones own money. If one wants to take up a loan, then here are the options that one would have for this. Consider these three options when venturing into the fix and flip business.
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