
Flipping houses can cost money. Here are our “top financing options for flipping houses” to help you get started. Use one, some, or all of these financing options to acquire all the investment properties you want to flip!
If you’re thinking about investing in real estate, you have several options… you can rent, rent-to-own, wholesale, flip, and many other options as well! If you’re thinking about flipping, you’re probably looking to acquire an investment property and then fix it up to sell at a higher price. If so, here are top financing options for flipping houses.
Flipping Finance Option #1
For top financing options for flipping houses, this one is not my best option. You can get a traditional bank loan from a mortgage loan lender like a bank or mortgage company. These are usually similar to the traditional mortgage loan that you might get for your residence: you pay a down payment and “use your credit score” to borrow the rest. Unlike your residential mortgage, you would sell the house to a buyer and then pay off the mortgage quickly.
The biggest drawback to this method is that you can usually only get a few mortgages in your name at once before the banks won’t lend you anymore. That will limit how many properties you can flip at once. This is only one of the reasons I do not like this option. You cannot set your own terms with this option. We prefer working with Private Lenders as our top financing options for flipping houses. Working with private lenders allows you to set your own terms and you don’t have to buy into the loan itself as you do with a bank mortgage or mortgage broker.
Flipping Finance Option #2
Another way to finance your flips is to partner with other investors so that each of you put in a portion of the total cost. For example, you might acquire a $100,000 property by finding 3 other investors and each of you put in $25,000. Again, not our top financing options for flipping houses. Yes, it can be done, but you are limited to the profits as well. When working with a private lender and you have control of the terms, you can profit huge.
Of course you’ll also need to figure out what percentage each person will invest in the renovations, and what percentage each partner earns at the end. In the example above, the simplest option would be for each partner to invest 25% and then get 25% back but some investors might prefer to be just “silent partners” while other investors might want to roll up their sleeves and do the renovation work!
If you’d like to flip some properties and perhaps want to partner with other investors, why not get in touch with us at (214) 723-1304, we can go over our top financing options for flipping houses, and give an idea of what you are really looking at when work with us and we might be able to give you some suggestions or even make some introductions.
Flipping Finance Option #3
In some situations, you may be able to invest in real estate with your IRA or 401(k). This is by far part of our top financing options for flipping houses. This is a very smart strategy (although you should be aware that there are some restrictions and guidelines — so make sure you talk to an expert who can help you). When starting t5his particular process, contact an IRA specialist with your local IRA custodian company. Ask how they work and what you need to do qualify and or have one of your private lenders sign up with that particular IRA custodian.
There are some significant tax advantages to using this financing options, so it’s one that you may want to consider if you have money available in your IRA. As one of our top financing options for flipping houses, this works best when you private lender has a Self directed IRA. With a self directed IRA, the private lender can use the account and his funds as he sees fit.
Flipping Finance Option #4
Seller financing is a very powerful way to finance your investments. Another top financing options for flipping houses. Using this method, you by pass the bank and the seller actually becomes your bank! Instead of getting a loan from a mortgage company, you simply get the house and pay the seller a regular “mortgage” payment each month until you’ve paid the entire amount off. Some sellers like this because they want to sell fast and like the cash flow.
The seller finance option has become what the Assumable Loan used to be. This is absolutely a top financing options for flipping houses. You can buy a house for you and your family or use the method to flip houses, or for rental purposes. As long as the monthly mortgage is paid every month, you have nothing to worry about.
Summary
If you’re an investor who wants to flip houses, you probably need to finance the purchase of them. These are our top financing options for flipping houses, that you can use to acquire as many properties as you want!
You can talk to us at We Buy Houses Cash Dallas, about how to acquire more properties to flip, or to help you figure out how to invest with your IRA or 401(k). Give us a call at (214) 723-1304.