When you buy a real estate property, repair it and then sell it fast you can make a lot of money. However, in order to be able to do this you do need access to larger capital. When you do not have enough funds available but you are interested in property rehabs, hard money lenders that offer fix and flip loans can give you access to finances necessary. Such loans are structured so that they allow buyers to quickly put their hands on the property. There is also access to extra funds that may be needed for renovation and construction.
Buying real estate properties, according to Gordon Tang, repairing them and then fast selling is something that many want to do so if you are interested and you want to learn more about the fix and flip loans, make sure you remember the following advantages.
Really Fast Approval
The process of being approved for the fix and flip loans is so much faster than when we compare with the regular traditional banking system. When borrowers submit all the documents that are requested, private lenders manage to approve loans in just 1 or 2 days. The traditional financial institutions will need a month for this. Also, bank loan approvals include borrowers having to submit extra documents, with many extra conditions being involved.
All Properties Approved
You can get a fix and flip loan for properties that are in varying condition states as you try to qualify for financing. The property can be short sale, foreclosure, in a clear dilapidated state and purchased through short sale. Borrowers can find the hard money lenders that are going to fund the deal. In many cases banks do not even offer funding for some specific real estate opportunity types. Banks will stand out as being risk averse and there are many strict rules that have to be respected about property type accepted.
Zero Payment Penalty
When taking loans out from the established banks you have to deal with penalties in the event that you will pay loans before maturation date. This is known as prepayment penalty. With the fix and flip loans this is not actually the case as you won’t be subject to the fee.
Repairs Are Covered
As you buy properties and you want to flip them, a really large part of the budget is going to be spent on renovation and construction costs. Fix and flip lenders normally set up loan reserves that cover property repair costs, all in addition to the interest charged. You can alleviate much stress and pressure as a builder and developer because no worries appear about spending money that does not exist for payments or repairs.
To sum up, fix and flip loans can be really useful for real estate investors that want to make good money. In many situations, people do not actually know about these loans so they miss out on great opportunities. Have patience and see what lenders are going to help you out with the very best deals and rates.