When you flip a home, you’re buying it at one price, fixing it up, then selling it at a higher price, thus turning a profit. To perform these renovations, you often need funds to pay for materials, tools, and labor. There are numerous ways to accumulate these funds, with one popular option being to take out a loan. And while other financial institutions can provide you with a loan to help you flip a home, one great option is a hard money lender.
If you’re in the Texas area, there’s never been a better time to start residential real estate investing. To make the most of this venture, you may need some financial assistance to help you get started. Below, we’ll outline hard money loans and the benefits they can provide to those of you looking to flip a home.
What Is a Hard Money Lender?
A hard money lender is a type of money lender that uses a real property to secure the loan. They are often used by home flippers, who use the value of the home they are flipping to secure the loan they need for renovations. Hard money lenders are different from banks in that the lenders are typically individuals or companies.
Hard money loans are typically taken out over a short period. This aligns well with home flipping projects, as most people in this line of work are looking to renovate and sell the home within a year. Since the loan term is so short, borrowers do not need to worry about the interest rate and instead focus on other factors of the loan process, such as speed.
Benefits of Using a Hard Money Lender to Help You Flip a Home
The biggest benefit of using a hard money lender is the faster approval process. When you’re looking to flip a home, time is very important. The longer you have to wait to get the funds you need for your renovation, the longer it will take to complete that renovation. Every day that goes by without completing the renovation and selling the home cuts into your profit, making it essential that you secure the loan as quickly as possible.
Since hard money lenders aren’t banks, they can move the loan application process along faster. Hard money lenders focus more on your collateral – the home you’re flipping – rather than your personal financial history. They do not need to spend time verifying your income or reviewing your financial documents. Instead, they can look at the value of your property and determine what sort of loan you’re eligible for.
This is good news for people with less than stellar credit history, even with a high income. If you have a low credit score or don’t have a credit history built up yet, this isn’t much of a factor for hard money lenders. So, if you’re new to home flipping, it could be much easier for you to secure a hard money loan than a typical loan from a bank.
Some banks are hesitant to fund loans for residential investing projects, viewing them as risky. If you’re having trouble finding funding elsewhere, you should consider a hard money lender. These lenders are much more open to projects that are typically regarded as risky and more likely to give you the funds you need.
Flipping a Home with a Hard Money Loan
To get the funds you need for your home flipping project, contact Quick Lending today. We offer all sorts of loans, including bridge loans, rental loans, and transactional loans. So, if you’re interested in getting started with residential real estate investing in the Texas area, we can help you make that dream a reality.
After you contact us, we’ll schedule a meeting with one of our loan officers. Our loan officer will discuss what you’re trying to do and provide you with different loan options during this meeting. Once you decide on the type of loan you want, our loan officer will help guide you through submitting paperwork. Finally, your paperwork goes through the approval process, and once approved, you’ll receive your loan. It’s a simple and fast process that’s perfect for real estate investors who don’t have a lot of time to waste.
Now is the perfect time to start residential real estate investing in the Texas area, so don’t waste time going through the typically slow bank loan process. Let Quick Lending help you get the money you need so that you can begin your home renovation and start turning a profit. Contact us today!