How Do You Approach Financing a Flip?

How Do You Approach Financing a Flip?

Real Estate Broker · Frankfort, KY · Member since 2019 · 109 posts · 29 votes

When you're evaluating a fix & flip, how early do you think about the financing?

Do you determine the purchase and rehab numbers first and then structure financing around the deal?

Or do you establish your financing parameters before seriously pursuing properties?

Curious how other investors approach this.

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  • Member since 2022 · 51 posts · 30 votes
    3d

    Hey Linda! I structured a financing game plan upfront that has worked well for us in the past — using private money for the down payment and hard money to finance the rest. Every deal is different, of course, but having that structure in place has helped us get a much better estimate of our out-of-pocket costs going into a deal.

    For us, financing is a lower priority when initially evaluating a flip. First, we work through the scope of work and total project costs. If the spread works based on those initial numbers, then we start shopping around to see if we can reduce our carrying and financing costs. That becomes especially important in a higher-interest-rate environment!

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