Rental Property Investor 路 Richardson, TX 路 Member since 2016 路 61 posts 路 14 votes
I am looking to begin a Flip on a foreclosure property in the Dallas area. My question starting out is where is everybody getting the funds to close the deal? Specifically for a flip is it mainly just Hard money Lenders or is there another way to get a loan that I'm not aware of?
@Rickey Wiley lots of options for flipping is available here in DFW. Hard Money is used to close quickly and in theory, they could have lower out of pocket to you if the numbers worked right. There are also other banks that have loans that are in between hardmoney and conventional renovation loans. Those loans generally use 20% down of your acquisition and repair costs for single family homes. The Conventional loan renovation loan can use 15% down but it needs 30 days to close at a minimum so most flippers use other loan types. Tag me here in the forum if you have other questions on it. Thanks!
Lots of hard money available in this town. If you have any specific questions, I'm happy to help. A lot of folks will also use friends and family money. If you have patience and can qualify, there are some banks that have rehab programs for flippers.
@Rickey Wiley lots of options for flipping is available here in DFW. Hard Money is used to close quickly and in theory, they could have lower out of pocket to you if the numbers worked right. There are also other banks that have loans that are in between hardmoney and conventional renovation loans. Those loans generally use 20% down of your acquisition and repair costs for single family homes. The Conventional loan renovation loan can use 15% down but it needs 30 days to close at a minimum so most flippers use other loan types. Tag me here in the forum if you have other questions on it. Thanks!
Lines of credit on your home or other rental property are another option not yet mentioned. You could also take loans from retirement accounts or life insurance policies.
@Rickey Wiley When it comes to foreclosure auctions, you need to have the cash before you actually have the property (you have to pay right when you bid). This money will come from reserves you have yourself, a line of credit, or family/friend/acquaintance that have reserves or a LOC. Most banks and HMLs will not lend without there being a property that can be used as collateral before the money is handed over.