The real estate market is now coming back to normal as REO and short sale inventories dwindle.
As an investor many times you need some help with funding that house you want to fix-n-flip.
Here is a short checklist you can use to increase your chances of success using hard money to purchase fixer up type homes.
1. Find a Private or Hard Money Lender – These days there are many private money lenders and the major differences you might want to consider are how fast they can fund your loan and what kind of customer service they will deliver.
2. Get Your Pre-approval letter from Your Hard Money Lender – A Pre-Approval Letter allows you to show the sellers that you will have the funds to close. Many private sellers require proof of funds as well.
3. Find and Secure Your Property – Find a specific area and go to work. Meet the agents, property owners, mortgage brokers, and do your marketing. The more people who know you are looking for a home, the more deals you will come across.
4. Analyze and Establish Construction Budget - Setting up a budget that you follow will greatly increase your chances of success. Many real estate investors have failed because they didn't set a good budget.
5. Secure a Hard Money Loan – Many lenders have “Request-a-Quote” forms that can get you a quick financing commitment
6. Prepare Personal Financial Documentation - You will need your bank statements and will need to show the financial ability to pay the mortgage. Most private money lenders only require "interest only" monthly payments while you rehab and flip the home.
7. Clear Loan and Title/Escrow Conditions – Make sure you are getting Title Insurance from a reputable firm and ensure your lien is in 1st Position.
8. Assemble Down Payment and Rehab Funds - Typically private money lenders will loan about 70% of the purchase price.
9. Review and Sign Loan Documents - Time to close and get started with your rehab.
10. Close the Purchase and Financing Transaction – Ready set, close - rinse and repeat.
These 10 steps will get you on your way to using a Private / Hard Money Loan for your Fix and Flip purchase.
Have you found a fast funding, great customer service Hard Money Lender yet?
- How to Get Started as a Real Estate Investor - July 16, 2021
- Local Phoenix Real Estate Investor Wins “Best on Tour” - July 16, 2021
- Real Estate Investing Question: Should I Flip or Hold the Property? - July 16, 2021