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fix and flip loans

Real estate has continued to be a great form of investment for a long time. One strategy to follow when looking to invest in real estate is to “flip” an investment property by purchasing it at a discount, investing capital to make improvements, and then selling it for a profit. There are several tips that can be followed to help reduce your costs and improve your profitability when flipping homes.

Look for Ways to Reduce Labor Costs

The most significant expense that you will incur when flipping a property is labor. While it is best to leave some work to the professionals, such as electrical, plumbing, or labor work, there is other work that can be handled by less skilled individuals. Simple demolition, moving materials, cleaning, and doing basic work could be reserved for college students and other individuals that command less income than general contractors.

Get the Right Type of Financing

Flipping houses does require you to have access to capital, and for many investors, the best option is to take out a hard money real estate loan. These loans are ideal for house flippers as they have shorter terms and can provide the capital needed to both acquire and renovate the property. A typical hard money loan term is six months to a year; however it is possible to get longer terms (up to two or three years) in certain circumstances. With these fix and flip loans, you will have the ability to purchase a home with confidence when you see an opportunity. Once you have completed the renovation, you can then pay off the loan through sale of the property or refinancing with a permanent loan.

Invest in Business Assets

Someone who is going to flix and flip homes will need a lot of equipment to get the work done. While most home improvement stores offer tool rental services, you may find that the cost and inconvenience associated with renting tools adds up quickly. If you intend to fix and flip properties regularly, a better option would be to purchase these tools. Not only will this cut costs, but you will know that you have access to the tools when you need them.

Are you looking to invest in real estate? Interesting in house-flipping? Reach out to us today to learn more about fix and flip loans.