March 5, 2019
If you are looking for an investment property to rehabilitate and sell for profit, you may be curious what your funding options are. Unlike a traditional home purchase with an extended mortgage, flip properties have more financing options available. Hard money fix and flip loans are a great option for buyers who have experience with rehabbing homes for sale, for example. Let’s look at what a hard money fix and flip loan is, and who can benefit from one most.
What is a Hard Money Fix and Flip Loan?
A hard money loan is a short term loan that can be obtained much quicker than a traditional loan and is intended to those individuals who plan to resell a property within a year of purchasing. These loans are great for fix and flip projects because they are designed for short term investment properties. Because these loans can be obtained in a much shorter amount of time than traditional loans, they are ideal for buyers who need to move quickly on a property.
3 Ways to Benefit from a Hard Money Loan
The most common use of a fix and flip hard money loan is for a rehab property purchase by an experienced flipper. Lenders are more likely to offer hard money loans to buyers who have had successful flip properties in the past, because there is less of a risk that the loan won’t be paid back in a timely fashion.
The second use of a fix and flip loan is by a first time flipper who is working with a contractor who has a lot of experience with renovations and flipping. While the buyer may not have the experience, the lender sees the contractor as experienced, allowing the loan to be a possibility.
Lastly, hard money fix and flip loans allow buyers to compete with all cash buyers for the property. Many flip properties are found at auction, where there may be a large amount of cash buyers competing for the property. Because the hard money loan can be obtained quickly, this gives more buyers a chance at the property.
If you are a seasoned flipper and are looking to finance an upcoming project, consider a hard money loan for a quick and profitable turn around. For novice flippers working with a contractor a hard money loan may be a great way to quickly obtain your property and get to work. If you are in the market for a hard money loan, or are curious what other funding options you have available to you, call us at Maryland Private Mortgage today. We offer hard money loans in Maryland and have years of experience. We’d love to answer any questions you may have! Call today to set up an appointment and get started!
The Maryland Private Mortgage Lending Team