Investor · Denver, PA · Member since 2015 · 193 posts · 55 votes
Hi All,
Here is my latest plan to raise the funds needed to start flipping houses in 2016. Please let me know if you think it will work or not. I will be buying houses that need work obviously, but not ones that need so much work that they are not livable.
Example House Price: $50,000
Example Renovation Cost: $20,000
House Downpayment: 25%
Mortgage Interest Rate: 4.5%
Loan from Lending Club for $30,000 at 7% (in case it goes over budget)
Do you see any issues with this financing strategy, or do you think it would work out well? I'd prefer to stay away from hard money because of the high interest rates, but that is an option as well. Any advice is greatly appreciated.
Investor · Denver, PA · Member since 2015 · 193 posts · 55 votes
11y
Hi Bryan,
I'm sorry, I should have been more clear. I would do the 25% down payment + Closing costs on the house with my own money that I've saved up. And then I would simply get a loan from Lending Club or Prosper for only the renovations.