House flipping has become a popular way to augment an individual’s income. Some individuals have even turned this trade into a full-time business, producing a decent income by flipping as few as 2-3 homes each year.
There are several obstacles to overcome before you start renovating homes for a profit. But once you’ve identified the right property, finding the funds to buy the home and the materials necessary to flip the house can become an obstacle. Funding a flip is one of the largest hurdles you will need to overcome.
Funding a flip like this one could be costly. Make sure that the house you are flipping is something that will be marketable once the project is complete.
Whether your credit is good, bad or somewhere in between, there’s a way for everyone to get funds for a house flip. Here’s a list of five ways to find funding to start flipping a property.
Traditional mortgage:
This way is perhaps the most popular method of funding your house flipping project. To start, visit a bank or financial institution of your choice to pre-qualify for a loan. Once you find the property in your price range, you’ll get the keys to your property within 2-4 months, on average.
A second mortgage:
Do you have a lot of equity in your home? Leverage that into the funding you need to start this project. Again, you’ll need to visit a bank or lender to take advantage of this process. This way carries risks because if you don’t move the home fast, you could be paying the mortgage for two homes until the flipping is complete.
Personal funds:
If your credit situation won’t allow you to take out a mortgage, look in the mirror for funding. Do you have assets you can liquidate to obtain the funding? Or do you have a 401k or other form of retirement fund to borrow from to start flipping homes? If so, this can be a great way to start flipping houses.
Renovating a commercial property such as this multi-family apartment complex above takes more than what your piggy bank holds. There often needs to be several backers in order to accomplish this type of flip.
Find a partner:
Do you have some of the funding you need but not all of it? Find a partner to split the costs of flipping the home. While this can be a faster form of obtaining money, it also involves splitting the profits.
Funding a flip online:
With the popularity of house flipping growing, so are the options. New investors are finding ways to get into the action through funding a flip of other’s projects. Web sites like www.fundthatlfip.com or www.realtyshares.com are giving individuals access to funds from private investors. Almost all types of flipping projects can be funded with websites like www.realtymogul.com and www.realtyshares.com focused on funding larger projects such as apartment and other multi-unit housing projects.
