Don’t Wait Until You’re Under Contract to Look for Capital

[Nicholas Floyd]

One thing I see a lot with fix-and-flip investors is waiting until a property is already under contract before figuring out where the rest of the capital is coming from.

That can put you in a bad position if the lender doesn’t cover everything you expected, the rehab budget increases, or you need additional liquidity for carrying costs and reserves.

Having access to business funding before the deal shows up can give you more flexibility.

Depending on the borrower’s personal credit, business structure, and/or revenue, options can include:

• 0% APR business credit cards

• Business lines of credit

• Business loans

• Revenue-based funding

• SBA financing

The goal isn’t to use every funding source available. It’s to know what you qualify for ahead of time so you can move quickly when the right property comes along without scrambling for capital at the last minute.

For flippers, having capital lined up can be just as important as finding the deal itself.