If you are in the house flipping business, it is in your best interest to steer clear of conventional financing. The poor condition of any property you aim to purchase will likely mean you won’t qualify for a traditional loan. Arizona Hard money lenders are perhaps the best financing option for those who are in the flipping business. Learn some things you should look for in your lender and what you can do to maximize the benefits of hard money.

Hard money providers use the value (or potential value) of the property being purchased to underwrite their loans. Therefore, hard money is ideal when it comes to financing flips because this type of lender can look past the current poor condition of your property.

In addition, when it comes to house flipping, hard money offers considerable advantages over other types of financing. In the case of foreclosures (i.e., the properties house flippers most often purchase) banks want buyers who can make full offers right away. Most hard money deals can close in a matter of days. This speed in loan closing makes hard money an ideal way to secure the best investment properties as quickly as possible.

But how do you know which Arizona Hard money lenders are the real deal?

Basically, you want a lender who can understand the potential of your project. Ideally, your lender should have expertise when it comes to renovation projects. If you are in the flipping business, you want a lender who can offer insight into your specific project, who will understand how to value your property after the repairs are carried out and can give you insight into the amount of financing you might need.

You also want to ensure your hard money deal closes as quickly as possible, so you can secure the best investment properties before your competition. So, the ideal lender should be a direct lender, that is someone who has the already funds on hand to fully finance your project.

But when it comes to speed, what are steps you can take to ensure your deal closes as quickly as possible?

What can you do as a borrower to take advantage of the speed offered by Arizona Hard money lenders and increase your eligibility?

In the first place have the numbers and the specific details of your renovation project worked out well in advance before you approach any lender. Know the particular aspects of the property you aim to purchase, the estimated cost of repairs you need to make and have a specific timetable worked out in advance.

Having a sense of the property’s potential gives you a sense of how much it might be worth after repairs, which will give your lender confidence. 

Knowing the cost of the repairs you need to make; will also give a sense of how much financing you actually need. Hard money is expensive so have timetable in mind to get perspective on how long you will to carry the loan, as your aim should be to pay the loan off as quickly as possible.

Basically, the better your understanding of your specific project the more confidence your lender will have in you, and the faster your hard money deal can close.