How to Fix and Flip a Property With No Money In Your Pocket
Fix and flip properties are one of the most popular and profitable ways of investing in real estate today. The right fix and flip can make you a great deal of money—just like the wrong fix and flip can lose you a great deal of money. There is no denying the popularity of flipping in today’s market. However, most people think that they need a lot of cash on hand in order to make a fix and flip work. This isn’t always true.
While cash is always valuable when it comes to any time you are making an investment. There are ways that you can invest in a fix and flip property with hardly any money in your pocket. Here are three different places you can look for help when you need money for your fix and flip investment, but don’t have enough cash on hand.
Find a Partner
This is probably the easiest way to get some cash for your fix and flip property, without having to take any type of loan out. There are many places to find partners. You can ask a family member, close friend, business associate, local business owner or even another real estate investor that you can partner with.
Think about who you interact with on a daily basis in order to find a partner.
There are lots of ways to enter into this partnership. Many people enter into a simple 50-50 split. Your partner will finance the deal, you do all of the legwork and the two of you split the profits. However, there are many different partnership options available—and remember you will need to be able to sell yourself or your services to the other parts you are partnering with.
Hard Money Loan
Hard money loans are some of the most popular sources of financing for people who are looking to get into the fix and flip business, but who don’t necessarily have as much cash on hand as they need.
Hard money loans do have higher interest rates than some other loans, but they aren’t as difficult to get as mortgages, and they are designed to be for short-term projects, such as flipping. Hard money loans are a great solution for many flippers—but are best if you know that you can flip the property quickly.
Private Money Lenders
Private money lenders, like the name suggests, are regular people who have money they are looking to invest. This is different than getting a partner, because typically, these lenders will act as a bank, giving you a loan at an interest rate they see fit—instead of working together with you.
You can typically negotiate a better rate with a private lender than you would with a bank—and you can get more control over the terms of your loan. The good news is, as fix and flip properties get more and more popular—so do the number of private lenders who are looking to invest for flippers without enough money. There are even online directories available that can help partner flipper with private money lenders.
Remember, when it comes to getting started with the fix and flip industry—where there is a will there is a way, even when you don’t have thousands of dollars on hand in the bank. All you need to do is determine which option is the right option for you.