Basic Tips For Flipping Houses With Hard Money Loans

For many investors starting out flipping houses, the financing is the biggest hurdle to overcome.  This is especially true in a state like California where the market is extremely competitive.  With a little cash to work with, however, there are some basic tips for flipping houses with hard money loans that can help the novice investor.

The biggest benefit you can have when starting out flipping houses is having access to some cash to work with.  Whether you have cash from savings, whether you borrow from family or friends or whether you take out an unsecured type of loan, cash is going to help.  While there are some 100% type funding programs out there, to qualify is very difficult and if you do qualify you typically have to give up 50% or more of your profits.

The ideal spot to be is to have 15-20% of the project cost that you can bring into a deal.  So if you are buying a property for $250k that needs $50k in work, being able to bring in $45-60k will make the cost of funding much lower.

The next biggest benefit you can have when starting out is to have an easy fund control to work with.  For novice investors, dealing with a fund control process can be a make or break part of the deal.  Not only that, it is also an aspect of the transaction that very few people talk about.  Many fund control processes will require work to be done in advance, then inspected, then funds released.  Additionally, it is not uncommon for funds to be released based on a percentage of completion rather than based on what the cost is to that point.

Having access to a fund control that will release funds in advance is ideal.  Often times it will cost more, but in the long run it will save time, money and headaches.  Having funds advanced means you don’t need to have additional funds in reserve to pay for the work to be done.  It also means a quicker turn time on the work getting done.  Less time means less interest paid on the loan.  Less interest means more profit.  The fund control process is a big deal, so be sure you understand it going in.

Check back in for more tips.  If you are looking for a fix and flip hard money loan in California, you may want to call 877 462 3422.  Ask about rehab programs that allow for advances for work to be done.  The money is not the least expensive, but the fund control process likely will be very easy to work with.

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