When “flipping” a property, the process involves buying a home that needs some maintenance, renovating the home and making repairs, and then reselling it in order to make a profit. This can be an excellent way to earn a profit, however, sometimes it is complicated to obtain the initial capital needed to make the purchase. If you are interested in learning more about fixing and flipping a home in Kansas City, Missouri, KC Investor Funding can help. Read on to learn more about buying a home with a fix and flip loan.
How Do Fix and Flip Loans Work?
A fix and flip loan is a short term mortgage that allows a borrower to purchase and make improvements to a home and then resell the property. They are commonly used to buy homes that have been foreclosed on or that are at auction, and the loans can include the cost for upgrades and repair of the home. There are many different kinds of fix and flip loans available, including hard money loans and bridge loans. You will want to speak with your lender to determine the option that best suits your situation.
Advantages of Fix and Flip Loans
There are many benefits to obtaining a fix and flip loan, the first one being that loan approval is a relatively quick process and you can get approved for a loan even if the home is in poor condition. Additionally, since fix and flip loans are usually backed by the property, there is less risk involved because there is little chance to lose the home since you can take ownership of the collateral. Also, since the terms of a fix and flip loan are typically shorter than more traditional loans, you will not have to pay a penalty if you pay the loan off early.
Requirements For a Fix and Flip Loan
When applying for a fix and flip loan, a lender will want to ensure that they have the ability to pay back the loan and that you have a plan to renovate and then resell the property. A decent credit score is required and you will need to provide documentation of steady income. When creating a plan for your fix and flip project, you will want to estimate the total amount you will need for the cost of renovation, and create a timeline of when the repairs will be finished.
Fix and Flip Assistance
Fixing and flipping a property can be a great way to earn some extra money. If you are located in Kansas City, Missouri and trying to determine the best financing option to help meet your goals, contact KC Investor funding today for a consultation.