Real Estate has always been a boon for all the investors and has become the most widen source of generating wealth. Investors are always looking out for opportunities to build their empire and make a steady cash flow. Fix & Flip Investments has become one of the most widely used Real Estate Investment strategies. For individual and institutional investors both, it is the finest option to generate income if one knows how to play their cards right.
Let us have a look into the basics of Fix & Flip loans and what advantages can the flipper have while using this strategy.
WHAT ARE FIX & FLIP LOANS?
Also known as Bridge Loans, they are Real Estate short-term loans specially designed for investors to purchase an old, distressed property, renovate or remodel it and then sell it out for profit.
The investor generally purchases the property in an auction, a foreclosure, or in a short sale where he gets the house at a price much lower than the market price. The current condition of the house requires a repair and renovation after which he can sell it out to any potential buyer for higher profit margins. There comes the need for Fix & Flip Loans, in which the investors need to cover the upfront costs and expenses.
There are two prime components to Fix & Flip loans – the purchase of any old residential property and the second is the fund needed for rehabbing it. The traditional mortgage methods provide loans for long-term investment needs that are not demanded by the investors. The investors need short-term profit and want to diversify their portfolio, so they get their desired needs to fulfill from the private money lenders who are quite flexible in their terms and conditions.
FIX & FLIP LOANS CAN BE USED FOR?
One of the most lucrative strategies, Fix & Flip Investment, offers a diversified opportunity for investors who want to earn profit in a short time period.
- RENOVATION OR REMODELLING: The investor spends on renovating the house to make it more appealing in front of the interested buyers. He invests money in fixing the foundation or roofs which are of prime concern, replacing the old items with the new ones, and installing new utilities as required.
- PURCHASE – A Fix & Flip Investor gets the opportunity to purchase an abandoned house and distressed property at a deep discount from the market price. Fixing the minors and doing little renovation he can easily sell it at a price much higher than it was purchased for.
- CONSTRUCTION PURPOSE – The borrower can even buy vacant land with a single house on it and can demolish it to make a new construction of any residential house. The investor can easily earn a profit by selling the constructed house.
BENEFITS OF FIX & FLIP LOANS
Fix & Flip loans provide great benefits to Real Estate Investors by yielding a high return on their investments. The major advantages of such loans are as follows:
- QUICK FINANCING – The investors purchasing such properties need hard cash while purchasing. They do not rely upon traditional methods as they may take days or months to approve your loan. The best alternative for seeking such loans is Private money lenders who quickly finance your loan and make the fund available whenever you need it.
- ADAPTABLE TERMS – Busy investors who have more investments to look on believing in spending their valuable time and effort at the right place. Private money lenders have flexible terms and condition that makes the whole loan-seeking process uncomplicated for the borrowers.
- LOW RISK – Unlike in the conventional mortgage system you may lose your property kept against security if you fail to pay the loan amount, but in private money lending, you may be at the risk of losing only the desired property you were granted a loan for.
- SHORT-TERM PROFIT – The greatest advantage of such loans is that they yield high profits in a short time frame if done skillfully.
FINANCING FOR FIX & FLIP LOANS
When it comes to financing, seeking a loan from a reliable and trustworthy private money lending company should be your priority. At 5F ASSOCIATES LLC, we make our borrowers believe that they are in much safer hands and we will make their financing experience completely stress-free. We are your flexible Fix & Flip lender providing versatile loans tailored for your specific needs. We deal in long and short-term financing, Rehab loans, and Vacation rentals.
Call us anytime for any questions and loan-related requirements.
Visit our website for more information.