There are a multitude of television shows that depict fix and flip projects as fun and simple. But the truth is that it is a very serious business that requires a good knowledge base of finance to be sure to get the best loan to meet your needs. Understanding your options for the best Arizona fix and flip loans is the first step in a successful flip.
Hard money Arizona fix and flip loans are a great option because they are a short term loan that is secured y the value of the property that you are buying. Real estate investors normally purchase a property, renovate and resell within the term of a hard money loan which is around a year at the most. But if you are only doing minor repairs, you can request that the loan term be even shorter if that is what works out best for you. The private lenders are much easier to work with and can even create a custom payment schedule in some cases.
Cash out Arizona fix and flip loans require you to own another property. In this case, you are refinancing or taking out a loan on a property that you own outright to use that equity to invest in a property to flip. This could be refinancing your current home to use that equity or you could refinance another investment property that you have to make the purchase. But the concern is that you need to complete your flip to at least break even and not risk losing both properties.
Home equity line of credit loans also require that you own a property or have a great deal of equity in a property. For this loan, you secure a line of credit against the equity in your home or another property that you own. Again, you are risking that property if you fail to sell the flip and cannot pay the HELOC payment. But with a line of credit, the line of credit is somewhat revolving. So each payment that you make provides you with more options for reusing the line of credit to make purchases for materials for the renovations or other projects.
There are many options for funding a fix and flip. But only after you have researched all of your options can you determine which loan will best meet your current needs. Some short term loans will require a large balloon payment at the end of the term while others can be refinanced to extend the term if you are unable to repay the full loan amount. It is also important that borrowers understand that using the equity in one property to purchase another property represents a far greater risk than using the property being purchased as the collateral for a hard money loan. Making a solid choice for your fix and flip loan will get you off to a great start on your real estate investment project.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.