We borrow money to fulfill our financial requirements. The loan is the amount of money which you take for a particular period, and it involves paying interest for the same. You can pay it back all at one time or within the term specified to pay it off. Loans are of different types and one takes these depending on the needs.
Know About the Fix and Flip Loans
Fix and flip loans are one type, but before you borrow you should know everything about these to avoid any kind of mistake. These are different than conventional loans and are taken for a short duration. These are used on a property, which you have purchased to fix it up and later sell it to earn profit.
For most of the real estate investors, it is a difficult task to find reliable fix and flip lender. Capital Fund 1 is a private money lender in Arizona which works hard to fulfill your loan requirements. All the loan related needs are completed within the shortest duration. So, you do not have to wait for a long time to get the fix and flip loan.
What Is Expected When You Get A Fix and Flip Loan?
Fix and flip loan involve a term length from six to twelve months. The interest rate ranges from 12% to 21 %. In some cases, you may get a lower rate too. The loan fee is between 3% to 6% of the total loan amount. Documentation is not necessary, but it is kept to the minimum if used. The loan amount which is sanctioned is between 60 % to 75% of the total property value.
Benefits of Fix and Flip Loans
Fix and flip loans you can avail within the shortest time limit. As no one likes to wait longer while they are in immediate need of money. This slows down your renovation job when you have to wait to get the money from the lender.
Most of the hard money lenders are not even concerned about your income. No need to worry about the current value of your property, because it is still in the pathetic condition. It will own its value once it is fixed up. The moneylender confirms the deal if they find that the borrower is the genuine type.
Is A Fix and Flip Loan A Right Choice for You?
Before borrowing the fix and flip loan for the investment purposes, you need to ask a few questions to yourself like:
- What will the expenses occur in repairing the property, so that it can be sold for making a profit?
- What amount of interest and fees will you pay until the property is sold?
- What will be the total money you will earn when you will sell the home? Is it going to profit you?
- How much amount below the market value will you be able to pay for the property?
Think wisely if the fix and flip loans are the right choices for you or not. It is a good way of making a profit if you buy the property below the market rate. After fixing the property, you sell it at the increased market rate. This means that you are not a loser but a profit maker.