First property - Mortgage or business loan?

2 Replies

Hello,

I am looking to buy my first house to flip within the next week or two. My question is this: Should I look at getting a home mortgage loan or a small business loan to pay for the house? I have enough capital to cover any down payments and possibly some maintenance to prepare the house for resale. 

If anyone could help me out with this, I would greatly appreciate it.

Thank you in advance,

Joseph

Typically a small business loan is used to start/finance/expand a small business. The bank is going to want real estate to secure the loan anyways so it's basically a mortgage with a higher interest rate. If you go the mortgage route, you have to consider how many houses you plan to flip annually since you will eventually not be able to get a mortgage as the houses you flip will become your inventory in a sense and you may no longer qualify for mortgage financing. Your best bet is a hard money lender and over time you will build a relationship with them and your rates may get better and the process simpler. Just my thoughts....

Rob,

Thank you. I will look into hard money lenders - this is something I don't know much about. What you say about the others makes sense. I obviously have a lot to learn, but this seems to be the place to learn.

Again, thank you!

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