Newport Beach, CA · Member since 2016 · 11 posts · 1 vote
I am wondering for those who are going to buy a property for the first time to flip it, how they can get some money (hard money, or any other loans, etc) to buy and rehab the property, if the amount shown on their tax return is low and may not qualify them.
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
Conventional (bank) lenders will look at your income to qualify you. If you keep your earnings really low, this won't be an option. Conventional lenders need a property to be in good condition and live able, which will also not work for a flip.
Hard money lenders rarely require income to qualify. Some HMLs will lend on properties that need rehab and some will only lend on rent ready, cash flowing properties.
You'll need to find a HML that will lend based on the after repair value, without looking at your income. I would suggest Lima One, Peak Asset, Visio Lending for a good price and I think they all do what you need.
I am looking into funding as well. If you have good credit, you can usually get an unsecured line of credit at about 14% interest. As long as you can turn the property quickly, the 14% won't be an issue. My thought was to get the unsecured line to purchase a rental and then refinance.
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
Conventional (bank) lenders will look at your income to qualify you. If you keep your earnings really low, this won't be an option. Conventional lenders need a property to be in good condition and live able, which will also not work for a flip.
Hard money lenders rarely require income to qualify. Some HMLs will lend on properties that need rehab and some will only lend on rent ready, cash flowing properties.
You'll need to find a HML that will lend based on the after repair value, without looking at your income. I would suggest Lima One, Peak Asset, Visio Lending for a good price and I think they all do what you need.
Conventional (bank) lenders will look at your income to qualify you. If you keep your earnings really low, this won't be an option. Conventional lenders need a property to be in good condition and live able, which will also not work for a flip.
Hard money lenders rarely require income to qualify. Some HMLs will lend on properties that need rehab and some will only lend on rent ready, cash flowing properties.
You'll need to find a HML that will lend based on the after repair value, without looking at your income. I would suggest Lima One, Peak Asset, Visio Lending for a good price and I think they all do what you need.
Darren some good insight. I used Peak both JP, Shane for years for my projects, and our international buyers. A lot of junk fees , and points, but if the number work. Who cares, is my thought process.
Not crazy about Hard money, unless the folks using it have a very strong exit strategy in place.
Lender · Shawnee Mission, KS · Member since 2016 · 5 posts · 2 votes
10y
I agree with Darren - A good HML will loan on the asset rather than your credit score or income. There should be several around your location. if you have questions on what they should be able to do most are using standard formulas and requirements.