How to Get Money to Flip Houses
Many people want to know how to get money to flip houses. You may have heard of how to flip real estate with no money down. When you want to flip houses with no money down, you need to know how to get money to flip houses that is not your money. We have discussed what it means to flip real estate with no money down. Now we will discuss how to get money to flip houses using none of your own money. This is how to make money on a fix & flip property with no money down.
How to get money to flip houses 101
The first way of how to get money to flip houses is borrowing. When you borrow to flip houses, you will pay interests and principal back to the lender. Borrowing is a form of debt financing. You are incurring debt temporarily (hopefully) to get money to flip houses to make enough profit in the end to pay off the loan and interests.
When getting money to flip houses by borrowing, make sure you do the math correctly. There are so many real estate investors in failing deals because somewhere the math went wrong and the profit disappears. So, who can you borrow from to get money to flip houses?
You can borrow from banks, mortgage companies, financial institutions, subprime lenders or any other institutional lenders that would lend to real estate investors. You usually have to qualify with credit, income or other factors. You can also borrow from hard money lenders but the interests and terms may be more steep than mainstream mortgage lenders. However, the qualifying process for borrowing from hard money lenders is much less strict.
Private lenders are individuals or groups of people willing to loan per deal. Private lenders will look at the property you are going to flip and decide according to how good it is and how profitable it will be after it is flipped.
Finding a partner to flip houses
If you can find a partner who is willing to put up the money for you to flip houses, then you would have to make the deal attractive to him or her. This can be a profit sharing deal such as a 50-50 split of the final profit. The partner may want to own a portion of the property. Finding a partner to finance your house flipping is similar to equity financing rather than debt financing as in the case of borrowing.