One of the best ways to make some hard cash through property or real estate would be fixing and flipping. With this activity, one will be buying a unit or a house, doing it up until it looks really good, and then sell it again. Now, if one would do this, then he or she must first look for a source of fix and flip real estate funding to finance it.
The first option would be to get a hard money loan. This is probably the most common option that most flippers would use in order to finance their endeavors. It is a type of short term loan that investors would use if they only plan to keep the property for at least a year and then sell it off quickly right after.
One of the best benefits about hard money loans is that they have a very fast processing time. In fact, it is completely possible to get the loan just right after fifteen days from the application date most likely since the term would be only one to three years. Take note though, that the interest rate is quite high being up to twelve percent depending on who lends.
In order to get this loan though, one has to have certain requirements like a good credit rating of around five hundred and a good income to debt rate. The income to debt rate should be around thirty five percent and it is also required that one has an experience of around three years in the real estate business.
A second option would be the equity credit line with two subcategories under it. The first is the home credit which is a long term credit line that has a fixed number of years for providing credit. The second type, which is the property credit, which is pretty similar but the term is based on the loan amount instead of being fixed.
Now, it would take a while for approval of a home line of credit, possibly up to 45 days. As for rates, it would range from around four to five percent depending on the lender. Also, one is required to have a credit score of six hundred forty and above, a debt to income ratio of forty five percent, and a minimum equity of thirty percent in property.
As for the property line of credit, term would be twenty four months with thirty days approval time. The rates would reach up to eight percent but can be as low as five percent. For requirements, a credit score of six hundred sixty is needed, a debt to income ratio of forty five percent, and an existing equity of forty percent in property.
Before engaging in this money making activity, take note of these three options that can be used for financing. The best one will depend on the preference one has for taking loans. As long as the options are here on the table, one will at least have a choice that he or she can consider for his or her budgeting.
The first option would be to get a hard money loan. This is probably the most common option that most flippers would use in order to finance their endeavors. It is a type of short term loan that investors would use if they only plan to keep the property for at least a year and then sell it off quickly right after.
One of the best benefits about hard money loans is that they have a very fast processing time. In fact, it is completely possible to get the loan just right after fifteen days from the application date most likely since the term would be only one to three years. Take note though, that the interest rate is quite high being up to twelve percent depending on who lends.
In order to get this loan though, one has to have certain requirements like a good credit rating of around five hundred and a good income to debt rate. The income to debt rate should be around thirty five percent and it is also required that one has an experience of around three years in the real estate business.
A second option would be the equity credit line with two subcategories under it. The first is the home credit which is a long term credit line that has a fixed number of years for providing credit. The second type, which is the property credit, which is pretty similar but the term is based on the loan amount instead of being fixed.
Now, it would take a while for approval of a home line of credit, possibly up to 45 days. As for rates, it would range from around four to five percent depending on the lender. Also, one is required to have a credit score of six hundred forty and above, a debt to income ratio of forty five percent, and a minimum equity of thirty percent in property.
As for the property line of credit, term would be twenty four months with thirty days approval time. The rates would reach up to eight percent but can be as low as five percent. For requirements, a credit score of six hundred sixty is needed, a debt to income ratio of forty five percent, and an existing equity of forty percent in property.
Before engaging in this money making activity, take note of these three options that can be used for financing. The best one will depend on the preference one has for taking loans. As long as the options are here on the table, one will at least have a choice that he or she can consider for his or her budgeting.
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