Savvy real estate investors have made billions of dollars buying low, renovating, and selling for a tidy profit. People who make a living flipping houses have budgets they stick to and know how to get the best fix and flip loans Seattle lenders can offer them. They are looking a short term loans with a good interest rate and no prepayment penalties.
A hard money loan is great for flippers because lenders will loan money for properties that are in poor shape. There are fewer qualifications with a hard money loan, which mean you can have the money in as little as fifteen days. This is a good loan for beginning flippers because lenders are more interested in the value of the property than the experience of the flipper.
Investors with multiple properties sometimes opt for cash out refinancing. With this loan the flipper can refinance current real property owned in order to purchase more real estate. There has to be 30 to 40 percent equity in the owned property in order to make this option work. Portfolio investors like this loan because it gives them a chance to finance a number of properties with a single loan.
Another loan available to those who already own property is a home equity line of credit. This resembles a credit card agreement more than a traditional loan. The amount of credit the investor can get depends on the value of the residence. A line of credit can only be taken out on an owner occupied property. There has to be at least thirty percent equity in the existing home to qualify for a line of credit.
Investment property lines of credit are almost the same as a home equity credit line. The difference is that it is used specifically to purchase investment property. It is a short term loan that is intended for purchase and repairs of non-owner occupant real property. No interest is paid until the investor uses the money. This option works well for investors who own multiple properties and buy them for the purpose of flipping them.
A bridge loan is just what it sounds like. They bridge a gap between two separate real estate deals. This is also a short term loan designed to allow the investor to buy one property before he has sold another one. The terms can be as short as two weeks and as long as one year. In order to qualify the investor must show proof of enough capital to pay multiple mortgages. The existing property must have at least twenty percent equity in it.
A permanent bank loan is not really for flippers. This is a fifteen to thirty year loan for the purchase of long term owner occupant or non-owner occupant properties in good shape. Rehabers who want to live in a property for a period of time before reselling are good candidates for a permanent bank loan.
There is a lot of money to be made flipping real estate. You have to know what you are doing though. You also need to know how to borrow money wisely and which loans are the best deals.
A hard money loan is great for flippers because lenders will loan money for properties that are in poor shape. There are fewer qualifications with a hard money loan, which mean you can have the money in as little as fifteen days. This is a good loan for beginning flippers because lenders are more interested in the value of the property than the experience of the flipper.
Investors with multiple properties sometimes opt for cash out refinancing. With this loan the flipper can refinance current real property owned in order to purchase more real estate. There has to be 30 to 40 percent equity in the owned property in order to make this option work. Portfolio investors like this loan because it gives them a chance to finance a number of properties with a single loan.
Another loan available to those who already own property is a home equity line of credit. This resembles a credit card agreement more than a traditional loan. The amount of credit the investor can get depends on the value of the residence. A line of credit can only be taken out on an owner occupied property. There has to be at least thirty percent equity in the existing home to qualify for a line of credit.
Investment property lines of credit are almost the same as a home equity credit line. The difference is that it is used specifically to purchase investment property. It is a short term loan that is intended for purchase and repairs of non-owner occupant real property. No interest is paid until the investor uses the money. This option works well for investors who own multiple properties and buy them for the purpose of flipping them.
A bridge loan is just what it sounds like. They bridge a gap between two separate real estate deals. This is also a short term loan designed to allow the investor to buy one property before he has sold another one. The terms can be as short as two weeks and as long as one year. In order to qualify the investor must show proof of enough capital to pay multiple mortgages. The existing property must have at least twenty percent equity in it.
A permanent bank loan is not really for flippers. This is a fifteen to thirty year loan for the purchase of long term owner occupant or non-owner occupant properties in good shape. Rehabers who want to live in a property for a period of time before reselling are good candidates for a permanent bank loan.
There is a lot of money to be made flipping real estate. You have to know what you are doing though. You also need to know how to borrow money wisely and which loans are the best deals.
About the Author:
You can find a summary of the advantages and benefits of taking out fix and flip loans Seattle area at http://www.privatecapitalnw.com/fix-and-flip-rehab-loans right now.
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