Advantages of Fix and Flip Loan
Purchasing for the real estate property and repairing and selling it fast would tend to be a profitable combination. But, the major key to this kind of recipe to achieve success is to have access right amount of capital. If you do not have sufficient funds or money but you will be interested in the rehab of your property, then your hard-earned money lender who is offering a fix and flip loan can surely be a good option for your needs. These loans are actually being structured in a way that allows the purchaser to be able to quickly acquire the property and to have the access to reserve for the funds for the renovation and the construction costs.
There are actually many advantages one can get from the fix and flip loan and the demand for the source of the funding is actually steadily increasing in that of the real estate investment industry.
First of all, when getting for the approved for that of the fix and flip loan, this can be a quick process as compared to the traditional banking system. If you are a borrower that submit that of the requested documents, then a private lender can surely approve the loan right within a couple of days where the traditional financial institution can be able to take at least 30 days or a month. To add to the significant longer waiting time for the bank loan approvals, the borrower will then be required to be able to submit for the documents and that of the clear conditions to be part of the process
The second one is that properties in various stages of the condition can be able to qualify for that of the fixed and flip loans. Whether the property is owned by the bank, or a foreclosure, or a short sale, the borrower can still be able to find a hard money lender that can be willing to fund the deal. Once again, the borrower may actually not have the option to fund for these types of real estate opportunities with the bank. The banks can be at risk-averse and will have the strict rules in place to what are the type of property that they can accept to be part of the loan portfolio.
Third advantage is the zero prepayment penalty. If you are to take out some loan from that of the established banks, then you may hit with the penalties if you have the opportunity to pay for the loan off prior to the maturation date. This can be called the prepayment penalty. Many of the fix and flip lender will not be anymore subject to this kind of fee.
Teaming with those solid lender who can understand the property you have, the local real estate market, and is willing to give help in the acquisition, selling and the construction process can be very vital. Make sure that when you choose for the loan you have to check the background of the company first.