Get a House Flipping Loan Fast with These Steps

Rehabbing houses isn’t something anyone should do on their own. You should be surrounded by a team of professionals who can help you make the best decisions and move forward with each flip efficiently and effectively. Your team should include a grade-A contractor, a whiz accountant, a savvy realtor, and a reliable private money lender.

Finding the right lender can be tricky, but it’s worth the effort. A good lender can become a business partner, someone who helps your investments grow and multiply for years to come. As your business relationship matures, the terms of your fix & flip funding should become more favorable. Here are a few tips for securing house flipping loans from reputable private money lenders:

Do your homework.

This is advice we give in a lot of our articles, but it bears repeating. Private lenders are looking for people who are serious investors. In some cases, a well-organized investment plan can help make up for a lack of experience or an imperfect credit score. Doing the necessary research to show that you know what you’re getting into and that you’re ready to make tough investment decisions on a deadline will show lenders that you’re someone to take seriously.

Shop around.

Don’t settle on the first house flipping loan you come across. Different lenders have very different reputations, terms, and services. Start by researching lenders who are licensed to lend in the state where you intend to flip houses. Narrow your search by listening to testimonials and carefully reviewing the terms each lender can offer you. Look for a lender who is interested in starting a partnership, not just making a one-off deal. Avoid hard money lenders if you can.

Once you have your list narrowed to two or three lenders, talk to them. Find out what kind of guidance they provide their clients with. Do they usually work with clients more than once? Do their rates become more favorable as your experience grows? What percentage of the purchase price will they require you to put down? How many active clients do they have?

Seek pre-approval.

Before you’re ready to make an offer on a house, you should have completed all of your lender research and decided on a lending partner. A reputable lender should be able to provide you with a letter pre-approving your house flipping loan. That will give you leverage when the time comes to make an offer on a home. Without it, particularly in this ultra-competitive environment, you may find yourself outflanked by more experienced investors.

Choose a lender who can fund your loan quickly.

With your pre-approval in hand, you should be able to obtain your funding much faster, helping you start your flip as quickly as possible. However, different private money lenders vary widely when it comes to funding timelines. Some lenders may only be able to get you cash in hand in a matter of weeks or even a month. In the house flipping market, that’s an eternity. Choose a lender who can get you cash in a matter of days, not weeks. The ideal funding period is five to ten business days.