How to get cash for house flip

Question

Hi BP Community,

My husband and I bought a small home on a large lot and are looking to do a large renovation project and expand the size of the home (with plans to hopefully sell in the near future). What is the best way to get a pretty large amount of cash for a house flip? We have lived in our home for almost 4 years so have some equity in the home. Would a HELOC be a good option? If so, any lenders you would recommend?

Samantha Pancoast · Answer

Hi David,

I think I can help shed a little bit of light on this for you. Just recently my partner and I were considering doing a house flip, but couldn't come up with enough of our own cash to do it ourselves. We did a lot of research and ended up finding out several options.

- If you have enough equity in your primary (or rentals) you can pull out a HELOC of home equity loan. Our lender is actually the one who told us to go with a HELOC through a small local bank because they usually give better terms.

- Find a reliable Hard Money Lender! You will still need the money for a "down payment" to give to them, which depending on their terms this can usually be 25%-50% of the purchase price of the home. Most, if not all, HMLs will finance 100% of your rehab though. If this is your first flip, it is also a good way to get your numbers checked by experienced investors because typically HMLs will run their own numbers on the deal you bring them. This can be the more expensive route though.

- Private money! We have found that if you can raise enough private money, you might not even have to put anything down! Pretty awesome, right? Yeah we thought so too. This is actually how we got started BRRRRing and it is also my favorite method.

If you look hard enough, there are plenty of other ways to get the cash you need for real-estate investing. I have just listed a common few, but the more you know the more deals you can make happen.

Best of luck to you and your husband, I hope you guys do well! :)