Posted over 1 year ago

5 Ways To Fund Your Fix & Flip Deals

There will be a time where you will need to have access to many different funding sources. There are pros and cons of each but consider each of the following for your next real estate investment project.

Banks

Banks have cheap interest rates, but at the same time, they’re harder to deal with. They usually require a large down payment, but if you have it, good credit and 45 days to close, they could be a good option.

Private Lenders

The benefit of private lenders is that you typically can dictate the terms and help structure the deal. They could be harder to find, but at the same time, you usually have flexibility with private lenders.  Make sure the private lender is sophisticated and understands the terms and you have a win win relationship.

Hard Money Lenders

Probably the most popular and easiest to access.  Hard Money Lenders are very flexible—a little more expensive than some other funding sources, but a great outlet to get your deals funded on timely basis.

Joint Venture Partnerships (JVs)

JVs are a popular source for investors. Typically, the JV money partner puts up all the money and the other partner finds the deals, manages the contractors and operates the transaction. You can arrange the partnership anyway you like and split the profits accordingly.

Your Own Money

Cash is a great way to fund deals if you have it. Not many people have cash to fully fund their deals. Self-directed IRAs can be used to fund/partially fund real estate transactions too. There are many custodians across the country that can help you set one up.

Good investors use all these funding sources for different deals. If you need to close quickly, use a private lender or a hard money lender. If you have more time, use a bank. Just make sure that you never miss out on an opportunity because you don’t have the funding.

There’s a time and place for each one of these funding sources.



Comments (2)

  1. Sorry for the delay as just saw this comment.  Yes, most HML will fund up to 100% as long as its below 65-70% ltv.  That money can be used towards purchase and construction funds. thanks


  2. Will Hard Money Lenders supply up to 100% of the acquisition and rehab costs (up to 70% LTV of the ARV)?