After 10 years of marriage, I’m still enjoying living in the first home I moved into with my husband. Buying a first home can be one of the most exciting events in a person’s life. Before making this important expenditure, people need to first sit down and determine how they will successfully finance it. After all, a home will likely be the most expensive purchase you make in your life. Talk to a loan officer and determine how much money you can reasonably borrow. Then, decide how much money you want to use as a down payment. You also must decide how many years you will finance your home for. On this blog, you will learn about the process of buying a first home with a loan.
With so many buy-and-flip shows on television these days, more people than ever are looking to break into the real estate flipping business. However, for those who have never done it before, you may not realize that the purchasing process for a fix-and-flip property is a little bit different from the one involved in buying a primary residence. Before you find yourself overwhelmed by the process and unsure where to start, there are some things that you should know. Here are some things that you should understand to help you prepare for your first fix-and-flip purchase.
Fix-And-Flip Loans Are Often Hard Money Loans
One of the first things that you should understand is that the loans required for a fix-and-flip investment are usually hard money loans. That's because the fix-and-flip industry is a risky one. There's no guarantee that you'll get a return on your investment after the purchase and repairs, so banks often look for experienced flippers when they're making their decisions on lending.
That's why hard money lenders are such a great resource for first-time flippers and those with only a little bit of experience. You can secure a hard money loan to fund both the property purchase and the rehabilitation, then complete the renovations and sell the home as quickly as possible. It's important to complete the flip as quickly as you can because most hard money loans are short-term and are often only one-year or two-year terms.
You'll Need To Estimate The Repair Costs
For anyone who has ever done a home remodel, you know that your best-laid plans don't always work out. Inevitably, there's always a surprise somewhere that can increase your costs and leave you struggling to stay within your budget. The same is true when you're dealing with a fix-and-flip loan.
Since these loans are dependent upon the remodeling process, you need to be sure that you have as accurate an estimate as possible on the repair costs. That means a thorough property inspection before you secure the financing. The more accurate your repair estimates are, the more likely it is that you will be able to fund and complete the flip in the timeframe allotted with your lender.
You Will Have Funding Options
Another important thing to think about when you're considering the financing for your purchase is the fact that you're not bound to only using that money. If you find that there's something you'd like to add to the plan, or you encounter an unexpected issue, you can seek real estate renovation funding separately from your lender, or even pursue crowdsourcing options if necessary.
The goal of a fix-and-flip investment is to flip that property for a profit as quickly as you can. However, you have to fund the purchase and the rehabilitation first. Reach out to a few real estate lenders, like Americas Lending Group, today to see what you can qualify for.