Best loans to flip a home?

Question

My girlfriend and I are looking to live in a fixer upper and flip it to sell after. This will be our first home and want to know which loans are better in our favor for overall costs. We’ve looked at FHA 203k loans and private lenders aswell as hard lenders. Any advice from people who have done flips would be much appreciated. We just want some good ideas and to be knowledgeable on these options for future reference if we continue to do house flipping.

Collin Boyer · Answer

Lending home is great for starters. They are a hard money lending company, 10% down, no hard credit pull, funds rehab as well. You do need to have a pretty good credit score though. Shoot me a PM if you have any more questions!

Dan Beaulieu · Answer

The main issue would be that you want to live in the property, which means all hard money lenders are out.

What you might consider is buying an investment property and renovating it using hard money, waiting 6 months, then refinancing into a conventional owner occupied home loan and moving in at that point. Then you live in a newly renovated house without breathing saw dust every day, and you’d have plenty of equity in it.

Owen Dashner · Answer

Lines of credit are best, since you are only paying interest during the time you have the money out.  Private money is also an option, provided the terms are flexible for your situation.  Hard money is also a good short term option for non-owner occupied properties.

Steven Skinner · Answer

@Tyler Bougie - You're on the right track with the FHA 203(k), and you could also check out the Fannie Mae HomeStyle loan as it's similar, but with a slightly larger down-payment, I believe. What @Dan Beaulieu suggested seems like a well-enough idea, but I think you're wanting to ultimately sell the home you're moving into? If you go that route, either be confident beforehand that you'll be able to secure the institutional financing needed, or be ready to sell (meaning you'll never end up living there at all, obviously). Some hard money lenders have terms that exceed 1-3+ years, so it depends on your specific situation, however with it being owner-occupied the majority would likely opt-out. With private lenders, there are no "set" terms, so you can negotiate until your head spins. There are a handful of approaches here. Just keep doing your research and balancing out what best suits your individual situation. Good luck!

Michael Plante · Answer

I will take a very close look at the tax ramifications of  short term flips

Many flippippers are surprised at how much they have to pay in income tax reducing their profits down to very little  depending upon your situation where you live you could be responsible for the 12.4% for Social Security short term capital gains which would be at your percent income so could be anywhere from 0 to 25 or 30% and 8% or so state tax

So the $40,000 or profit you may be thinking of good easily be reduced down to 20,000.    Ad in a few unforeseen Needed repairs and it’s even worse

I would make sure to talk with the tax professional before purchasing the property

Collin Boyer · Answer

@Michael Gessner I am approved to lend through them

Michael Gessner · Answer

@Collin Boyer do you work for lending home ?

Best loans to flip a home?

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