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Updated about 7 years ago on . Most recent reply
Mortgage question - Will this be ok?
I have flipped 3 homes, but they have been homes i've lived in and renovated myself. Now, I'm looking to make more of a business out of it and flip side house's that I wont be living in. I would rather stick to conventional loans and I have the cash for a 20-30% down payment for a mortgage and cash for the renovations, what I need to be funded is the purchase of the house. I created an LLC for protection, but I am quickly realizing banks aren't looking to touch fix and flip mortgages. What I am thinking is for these first 2 or 3 homes until I build up enough cash to purchase the homes outright is to just finance the properties as personal investment properties in my name.
Am I asking for trouble if I turn around and sell these homes in say 4 months once the reno is complete? I know this opens me up to some liability if someone were to get hurt at the house, but I'm more unsure about the actual bank side of things. Is there some sort of gotcha to conventional investment property loans? I talked to a bank yesterday and he said there weren't any issues paying back the mortgage in a short-term, but this is just new territory for me and 100% confident. If I tell the bank the plan is to renovate and then rent the house, but once renovated it makes more sense for me to sell the house. Can I get dinged by the bank because I didn't rent the house like I said I was planning on and instead sold it for a profit?
I don't mind taking on risk, I just don't want to take on dumb risk that is easy to avoid. I'm hoping someone could shed a little more light on person investment property loans and any possible downfalls.
Thanks!