boglapuri: PieceBlog: 3 EZ Ways to Finance Your Flip! - Real Estate

3 EZ Ways to Finance Your Flip! - Real Estate - Property Investment

Ask any home flipper and they will tell you one thing. It can be stressful! You will have to find contractors if you do not plan to do the work yourself. You will also have to make all the decisions as to what items will be used such as faucets, paint, and floor coverings. However, none of these decisions will be as stressful as choosing the right financing method if you do not already have a choice made. Of course, your first thought may be to finance your flip through the bank. However, there are many situations in which financing through the bank will not be the best choice. Bank financing will require you to provide credit info and work history, along with many other contingencies. Most times, traditional bank financing will not be the best financing for a quick sale. There are other ways you can creatively finance your flip, and some of them are much easier. Here are three ways you can finance your flip without the hassle of dealing with the bank. Home Equity Line of Credit / Unsecured CardsIf you already own a home and you have equity in it, you can actually open a line of credit and then make use of this equity to finance your flip. A home equity line of credit is much easier than having to go through the hassle of getting a bank loan or mortgage. Often, you can open these lines of credit with just a telephone call and a couple of signatures. Usually, you can get them through the same lender that holds your mortgage. This makes things much simpler overall and you can easily get enough funding to finance your flip provided you have the equity available. Another option would be to tap into low interest credit cards; these are unsecured and offer another creative financing method, pool together three or four cards and you could have $50-$100,000 instantly!Hard Money LendersHard money loans are often referred to as rehab loans because they are used predominately for real estate investments and home investing. This is because the loans are designed to make it easy for you to finance the cost of the home, along with enough money to pay for the renovations. Here is how a hard money lender will work the loan. These loans are solely for investment properties.For the most part, if you are using a hard money loan to purchase your flip, you will be able to finance up to 65% of "as is" value of the acquisition, along with 100% of the renovation costs. This way, you will be able to borrow enough money to buy the home and then have enough cash to actually do all the repairs.

IRAsAll IRAs are not created equal! In order to use your funds tax deferred, you will need to open a Self Directed IRA. This will allow you to (just as the term says) direct your funds to the investment of your choice that is allowed under IRS guidelines, real estate being one of them. So, you will be able to borrow against your retirement and use the money for a home flip. You will need to pay the funds back to the IRA within a certain amount of time that you determine, but this is a good way to free up cash for your flip and also build up your retirement tax deferred.Should you not have loads of cash at your disposal, use one of the above financing options to get your deal done quickly and grow your business.

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