I've been doing a lot of research about house flipping and using hard money loans to finance the venture. Can anyone give me a brief description of a flip they funded with hard money? (Including details such as the interest rate and the sorts of repairs you did to the house and how much those cost?)
I'm just trying to get a feel for this sort of deal.
Thanks so much,
Also, are there any repairs that you stay away from because they will be too much of a headache?
Watch out for unlevel floors....Lots of older homes have slanted or sagging floors
These can be very expensive to repair and time consuming!...Often this is caused
by years of settling....the "piers" that hold up the floor have failed or moisture and
water damage have made the floor joist sag!... If you do a walk through and you see
the floors are messed up...go under and look....You potential buyer will NOT like
unlevel floors!...you will want to fix them in most cases..
There really isn't a standard house flip. Every house is different and has different needs. Before you even start looking for a house to flip, you need to know how you are going to fix it - are you doing the work, or are you hiring out? If you are hiring out, do you already have someone who is going to do the work? Finding a contractor is extremely difficult. Most don't call you back. Craigslist is NOT a good way to find someone. I have had more bad results than success that way. NARI is a good way to find someone, but they can be expensive. The last thing you want is a house purchased with hard money, and no one to do the work for you.
J. Scott wrote a book called The Book on Flipping Houses. Here is a link: http://get.biggerpockets.com/flippingbook/
I haven't read it yet (sorry, J. Scott!) but everyone who has raves about how all-encompassing it is. I have yet to read a negative review of this book.
I would probably be hiring out the repairs. I don't have the skill set to do them myself (maybe someday!). Thanks for alerting me to the difficulties of finding a contractor. I'll check into that book.
As Mindy mentioned J. Scotts book is a great resource as well as his website: http://www.123flip.com/results-to-date/ he has a ton of detailed analysis's on there which are very insightful.
Hi @Leah Cooper ,
As has been said, every single deal is different. I look over hundreds of flips every week for underwriting them as a hard money lender. You will see everything out there. Just always be sure to have a very clear exit strategy. Don't always use your Realtor's comps alone, drive the neighborhood, do your research, make some calls. Feel 100% comfortable with the resale value after repairing/rehabbing the house. Use "worst-case" scenario values. This will also impress your lender, as this is what we are all looking for as well! When looking for lenders, after comparing rates, be sure to make sure they are truly a DIRECT lender and can close quick. They should want to work with you on all your deals, so they should be very fast and efficient. Having a reliable lender as your financial partner will take out one of the major stresses people run into while flipping.
Hope this helps!
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