Chattanooga, TN · Member since 2020 · 14 posts · 9 votes
I am lining up financing for my first flip. My thinking is I will get a HELOC (bank has said I could get $43k) for 20% DP on a $80k-$90k property and rehab, and get preapproved for the rest (they confirmed that wouldn't be an issue either). Is there an issue with this or is this a typical route for a first flip? Any other suggestions would be helpful on the absolute BEST way to finance your first flip (if you're not paying cash).
@David Karnes hey David! I'd say the HELOC route is easily the most common route for financing that I've seen on the first flip. I've worked with investors here in Chattanooga on flips before, and that's usually the best way to go.
There’s a few other options but I wouldn’t recommend them due to sky high rates comparatively to compensate for the lender’s increased risk of a flip. Hope this helps!
@David Karnes A heloc is a good route to go on your first flip. If you are supplementing with bank financing, the best deals are often the ones that need to close very quickly, and much faster than a bank can work with...this is where hard money or private money is a great tool. Even the most experienced investors with 100s of deals under their belt occasionally use hard money as a tool when needed. Also, the benefit of that type of financing would be that you have somebody very experienced in rehabbing double checking your numbers and watching over your shoulder, and hopefully available to help you through the process when needed.