Purchasing a run-down house and remodeling it can be a great way to make money in the real estate market, and this is often referred to as flipping homes. Flipping a home will require buying a house, investing money into the house, and then selling it for a profit, and one of the reasons more people do not do this is because they cannot get a loan to buy a house to flip. If you really want to flip a house, here are some tips to help you get the money you need to make this happen.
Buy a house that has equity in it
If you are selective about the home you buy, you might be able to qualify for a regular type of real estate loan, and the best way to qualify is by purchasing a house that has equity in it. If you can find a house, for example, that is worth $100,000 but has a price tag of only $80,000, you could possibly buy the house without putting any money down. This particular house would start off with $20,000 worth of equity in it, which means a lender may be willing to give you a loan to buy the house if you are paying only $80,000 for it.
Get a hard-money loan
If you do not think you can qualify for a regular type of loan, you could consider evaluating hard-money loans. A hard-money loan is the perfect option for flipping a house, as it is a short-term loan. Lenders that issue these loans typically give you a loan for one year at an interest rate that is significantly higher than the going rates on loans. The benefit is that you can get a loan to flip a house. The downside is that you will need to flip the house quickly if you want to avoid racking up too much money in interest charges.
Find an investor, partner, or friend
One other option you have is to find someone who is willing to put up some money for you, such as a real estate investor, partner, or friend. If you are good at home repairs and can flip the house quickly yourself, someone might be willing to fund the project in exchange for sharing the profits from the deal with you.
If you are interested in buying a house and flipping it and need money to do this, you could always talk to a real estate lender to learn more about your real estate loan options.Share