Without the right funding source, flipping your first property will be a challenge. It’s a great time in the market for flipping houses, but knowing your funding options could mean the difference between success and failure.
1- Know Your Personal Financial Situation
Many fix and flip operators go into a real estate investment opportunity only focused on profits. Many people aren’t aware of their own finances before they dive in and find that they might not be as secure as they assumed.
- Find out your credit score. There are plenty of reliable options out there for finding it, and you’d do well do monitor it regularly. Many different factors can affect your score, so know where you stand before making an investment.
- Get your financial documents in order. Get your assets and income verified. Be ready with bank statements, tax forms, and recent pay stubs.
2- Look for Plenty of Available Funding
As a first-time fix and flip operator, you’ll be faced with many different funding options. Choosing the correct one doesn’t need to be intimidating. As you look, be sure that there’s enough funding available for someone in your position.
- If you’re capital-constrained, as most novice operators usually are, look for funding source that can offer a percentage of your acquisition and remodeling costs.
- Funding this way could help you see a sizable profit, even after a 50/50 split.
- Working with an organization that provides funding helps to balance risk. With more traditional financing options, you’ll assume all risk should the project not turn a profit.
3- Help with Paperwork and Listings Will Ease Worries
As a novice house flipper, you have many other things to juggle. As you first look into fix and flip funding options, keep support at the top of your list of qualities to look for.
- Look into the funder’s ability to provide property and liability insurance. The more support you can find in your initial investments, the better.
- Don’t overlook the human element. If you have a dedicated primary contact devoted to your success, you’ll find the process easy to navigate.
- Can your funder provide help with invoice payment and other transactions? These services may seem small at first, but it’s the small things that pile up and cause increased costs.
There’s no reason to be nervous about your first fix and flip project. Work with friendly people that are experienced in successful projects and you’ll find there’s no need to be intimidated.
Learn more by applying for our fix and flip program today!