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Finding Financing for Flipping Real Estate


Flipping real estate is a huge investment, both in terms of time and money. If you don’t have cash to back up your deal, then you’re going to have to find it somewhere. There are a variety of avenues for flippers who are looking to finance a deal, from wholesaling to fixing up a foreclosure. Here are a few options you should consider for your next flip:

 

  • Just pay cash. If you have the money sitting in the bank, why not put it into real estate investing? Unfortunately, this means you’re also assuming lots of risk: if the renovations cost more than anticipated or the house doesn’t sell, you may lose your own money.
  • Bring on a partner. One of the easiest ways to get the money you need is to get somebody else to help you. Real estate investing partners each put in part of the cost of purchasing the property and then split the profits at the end of the flip. Before you leap head first into a partnership, make sure you’ve tied up any legal ends by speaking with an attorney.
  • Take it to the bank. If you have excellent credit, securing a loan can be easy. Even if your financial past is slightly tarnished, you may still be able to get financing through a bank – just expect to pay for it in the form of higher interest fees and other costs. Either way, you’ll usually need to make a down payment for the money you’re borrowing.
  • “Creative” financing. There are plenty of other ways to find the money to make flipping real estate a reality for you. Many of these options are shady, such as “subject to” financing, where you pay the seller directly but the loan stays in their name. They’re also harder to pull off, since the seller probably won’t want to be held liable for the loan if you don’t pony up the dough.

 

Real estate investing, such as flips, involve major cash transactions. While it can sometimes be tricky to find that money, it’s not impossible. Research the different options, and perhaps speak with a real estate attorney if you have any questions. Before you know it, you’ll have the money you need to make your flip a reality.

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