Flipping a property involves purchasing a home that is in need of repair, renovating it, and then reselling it for a profit. Flipping a home can be a very lucrative investment, however sometimes it can be challenging to obtain initial capital for the purchase. If you are interested in investing in a fix and flip property, and want to learn more about your financing options in the areas of Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage. We can work closely with you to determine the best mortgage options to suit your needs.
The Basics of Fix and Flip Loans
Fix and flip loans are short term mortgages that allow a borrower to buy and improve a home and then resell it. Fix and flip loans are most commonly used to purchase homes that are being foreclosed on or at auction, and can include the financing for upgrades and repair to the home. There are several different types of fix and flip loans, including bridge loans, which can be secured quickly using real estate assets, and hard money loans, in which the property serves as collateral.
There are several advantages to getting a fix and flip loan. First of all, approval for a fix and flip loan is a relatively fast process, and you can get loan approval for a home even if it is in fairly poor condition.
There is also less risk associated with a fix and flip loan since it is already backed by the property, therefore there is no chance you can lose your home because you could take ownership of the collateral. Additionally, the terms for fix and flip loans tend to be shorter, and you will not have to pay a penalty if you are able to pay off the loan early.
Qualifying for a Fix and Flip Loan
When applying for a fix and flip loan, lenders will want to be assured that you have a specific plan to renovate and resell the property, and that you have the ability to repay the loan. Good credit will be required, and you will need to be able to prove that you have steady income. In order to create a plan for the fix and flip, you will want to estimate the amount of money you will need for renovation costs, then you will want to determine what type of repairs will need to be done and create a timeline of when the work can be finished.
Getting Assistance With the Fix and Flip Process
Fixing and flipping a home can be an excellent source of additional income. If you are located in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and want to know more about securing financing, contact Foundation for a consultation. We can help determine the best financing option for you.