If you’re thinking about investing in real estate, you have several options… you can rent, rent-to-own, wholesale, flip, and many other options as well! If you’re thinking about flipping, you’re probably looking to acquire an investment property and then fix it up to sell at a higher price. If so, here are 4 top financing options for flipping houses…
Flipping Finance Option #1
The biggest drawback to this method is that you can usually only get a few mortgages in your name at once before the banks won’t lend you anymore. That will limit how many properties you can flip at once.
Flipping Finance Option #2
Another way to finance your flips is to partner with other investors so that each of you put in a portion of the total cost. For example, you might acquire a $100,000 property by finding 3 other investors and each of you put in $25,000.
Of course you’ll also need to figure out what percentage each person will invest in the renovations, and what percentage each partner earns at the end. In the example above, the simplest option would be for each partner to invest 25% and then get 25% back but some investors might prefer to be just “silent partners” while other investors might want to roll up their sleeves and do the renovation work!
If you’d like to flip some properties and perhaps want to partner with other investors, why not get in touch with us at (209)588-7100 and we might be able to give you some suggestions or even make some introductions.
Flipping Finance Option #3
In some situations, you may be able to invest in real estate with your IRA or 401(k). This is a very smart strategy (although you should be aware that there are some restrictions and guidelines — so make sure you talk to an expert who can help you).
There are some significant tax advantages to using this financing option, so it’s one that you may want to consider if you have money available in your IRA.
Flipping Finance Option #4
Seller financing is a very powerful way to finance your investments. Using this method, you by pass the bank and the seller actually becomes your bank! Instead of getting a loan from a mortgage company, you simply get the house and pay the seller a regular “mortgage” payment each month until you’ve paid the entire amount off. Some sellers like this because they want to sell fast and like the cash flow.