In the age of entrepreneurism and economic freedom, many people are purchasing houses (and other types of properties) before selling them for a profit. This is what’s known as a ‘fix-and-flip’. Typically, the house will be bought, spruced up, and then quickly sold again for a healthy profit margin – simple.
Naturally, it’s common for companies and entrepreneurs in the real estate industry to not have the funds to buy houses upfront. As a result, they get fix-and-flip loans to cover the cost of purchasing it instead. These types of loans are provided by real estate finance companies and there are many of them around.
So, what are the main benefits of getting fix-and-flip loans? If you want to know, you’ve come to the right place. Here, you can find a rundown of the top 5 benefits of fix-and-flip loans and how they can ultimately make your business more successful.
- Get Approved Fast
The number one benefit of fix-and-flip loans from private lenders is that you can usually get approved extremely fast. There’s no waiting around or tedious application process, which is what you’ll often experience when trying to get loans from banks. Instead, you can get your hands on the money right away and stay ahead of competitors in the real estate industry.
- More Flexibility Regarding Age and Condition of the Property
It doesn’t matter whether the property you want to buy is extremely old or in noticeably bad condition: fix-and-flip lenders are very flexible when it comes to this. They’ll understand your vision and see that the property has great potential to be renovated and sold for a profit. Therefore, after close communication with them, you should be able to get the all-important green light within a matter of weeks.
Banks, on the other hand, are much stricter when it comes to handing out loans. When they see that a property is in a bad state, they don’t want to take the risk, which is why loan applications get denied by banks so often.
- Attractive Interest Rates
Another great benefit of fix-and-flip loans is the interest rates that come with them.
On average, the interest rates will fall anywhere between 9% and 18%. When you consider the fact that fix-and-flip loans are short-term solutions (as they’re designed to be paid back quickly), this is an attractive interest range. After all, if you’re someone who can quickly fix-and-flip properties to rack up profits, any interest payments within this range won’t be of concern to you.
- Get Your New Business Off the Ground
Everyone knows that the real estate industry is highly competitive, which can be seen in today’s housing market. This can make it difficult for start-ups to enter the industry and truly get off the ground. However, with the help of a fix-and-flip loan, you can get off the ground quickly and start to thrive. Within a matter of months, your property portfolio will start to expand and (hopefully) you’ll start flipping your homes for a profit.
- Personal Service and Regular Communication with the Private Lender
Lastly, you can expect personal service and regular communication from the private lender that you choose. You’ll be able to stay in touch with them via phone and email, allowing any questions you have to be answered quickly. From the initial consultation through to your repayments, it’s a surprisingly simple process that comes with consistent communication that’s hard to get from banks.