How To Flip a House Using a Loan

Are you looking for a way to maximize profits by getting involved in the current real estate market? Do you want to make house flipping your side hustle or, one day, a full-time job? If so, then you need to learn the monetary side of how to flip a house.

Ask any experienced house flipper and they’ll tell you the same thing: you need to find the right loan for this process. As you might imagine, 15-year and 30-year mortgages don’t make sense if you’re looking to turn around and sell the home right away.

See below for an in-depth guide on how to flip a house using a loan, as well as all the other information you’d need.

Is It Possible to Get a Loan for House Flipping?

For all you beginners out there that have been intrigued by house flipping in the past, you probably have one basic question: “how do flippers get the money to afford it in the short term?”

While there are some out there that use their own cash, it’s rare. The more common scenario is that these house flippers, even the ones you see on HGTV, get loans with the direct intent of flipping the house. It gives the house flipper a bit more financial security.

With the real estate market trending the way it’s going, it makes more sense than ever to try and get a piece of the pie.

But where do you turn to get that loan? There are a few different ways that you could go, but we highly recommend going through a private lender. They can help you, as the house flipper, get your hands on better rates and terms than most other routes.

To answer this question, yes, it is possible to get a loan for house flipping. However, be sure to set yourself up with the best situation in a private lender.

What Is a Bridge Loan?

The main advantage of going through a private lender is giving yourself access to hard money loans. These are loans that focus on the house you’re trying to flip as collateral, giving you the money you need to buy the house, renovate it, and sell it.

Unlike the traditional mortgage loans which expect to get paid with interest over a 30-year span, private lenders look to get repaid quickly in the form of you flipping a house for profit.

We highly recommend that you consider a bridge loan from a trusted provider. These offer you short-term financing that you need to acquire the home, fix it up, then resell or hold it.

They’re a favorite among experience real estate investors because they allow for agents and house flippers to acquire properties at their own pace and increase their book of business.

Here at LendSempli, we offer bridge loans for all types of different properties. This can be for multifamily units, townhouses, unit properties, or single-family residences. You tell us the type of property you’re looking to invest in, and we’ll offer the financial solutions.

What Are the Qualifications of a Bridge Loan?

As you might expect, there are certain criteria that the property needs to meet to qualify for a bridge loan. These terms and conditions vary by private lenders.

For LendSimpli specifically, you can get a bridge loan as long as your property meets the qualifications below:

  • Requires a loan amount between $75,000 and $2 million
  • The loan amount is between 12 months and 24 months, no shorter or longer
  • The maximum LTC (loan-to-cost) is 85-percent of all project costs
  • You have a minimum credit score of 660
  • Maximum rehab of 100-percent
  • Rates that start at 8.5-percent

We also prefer that you have prior experience of 2 or more transactions within the past 36 months. However, if you give us a call, we’re happy to hear your situation and determine whether or not you would qualify for our bridge loan.

What Are the Benefits of Flipping a House With a Loan?

As you’ve probably noticed in this article so far, many advantages come with getting a loan, such as a bridge loan, for your house flipping endeavors.

First, it gives you more financial security like a house flipper. You’re able to protect your personal assets in case anything were to go wrong. Of course, this can also be prevented by the private lender having certain criteria that need to be met, as we do.

Second, your bridge loan will give you more buying power. Rather than using your own money and assets to purchase the home and pay for all of the repairs/renovations, your bridge loan will cover a vast majority of that cost.

Instead of worrying about how you’ll be able to afford the necessary repairs, you can focus on one thing: maximizing your profits from the sale.

Lastly, bridge loans can help you build your book of business. If you were to use your own money, you’d likely only be able to focus on one property at a time. With the bridge loan, you can look for other investment opportunities to help you capitalize on any door the market opens for you!

How to Flip a House: Find a Trusted Private Lender

Now that you have seen an in-depth guide on how to flip a house with a loan, as well as the right loans to get you there, be sure to use this to your advantage.

Be sure to read this article for more information on the advantages of hiring a private lender for your house flipping needs.

For more inquiries, please be sure to reach out via our contact us page and we will be happy to assist you further.