Many people are interested in flipping houses because of the many home improvement shows and the potential return on investment. The goal is to find a house that is inexpensive and then make improvements to quickly turn it around and sell it for a profit.
The hardest part of the flipping process may be finding the right type of loan. There are several types of loans for flipping houses but are they right for your situation. We’ll examine the best types of loans for your situation and why they’re the best.
If it’s your dream to flip homes, then check out the loans that are best for you.
Loans for Flipping Houses Include Hard-Money Loans
The key to flipping a house is to pay off the loan as soon as possible and still have a profit. A hard money loan isn’t from a bank and instead is from a private lender or group of investors. They are designed to be short term loans, so they are ideal for flipping.
They do charge high interest, usually anywhere from 12 to 21 percent. If you have bad credit and still want to flip a house, then this might be the route for you. There is also considerably less paperwork and can be finalized within a week. It’s a big part of why people choose these types of house loans.
The value of the home is collateral for the loan, and you can borrow as much as 75 percent of the total home value.
USDA Loans for Flipping a House
The United States Department of Agriculture has special loans for people buying homes in designated rural areas. USDA Loan requirements are more stringent than other loans, but it’s a popular loan program because they provide housing for people with low to moderate incomes.
The loans are available through approved lenders and generally, most rural areas with less than 35,000 population qualify for the loan. All applicants must meet certain income requirements to qualify for the loan.
The goal is to provide homes to promote prosperity in rural areas to create thriving communities and improve the overall quality of life. You can also use them to flip a home if it qualifies.
Acquisition Line of Credit
An acquisition line of credit is similar to a home equity line of credit where you are approved for a certain amount and have the ability to remove all or some of that amount at any time. The main difference between a HELOC and an acquisition line of credit is it’s designed specifically for investing in property.
Receiving this type of loan is based on your ability to own or flip properties. It’s for experienced flippers and loans can be for $1 million to $50 million.
Go for Your Ideal Loan
Whether you’re new or an experienced investor, there are loans for flipping houses available. Choose the loan that best fits your needs and begin your flipping adventure.
If you’re like to learn more about house flipping and methods of investment, then please feel free to explore our site.