How Much Financing To Get Started

Question

Hello. I'm interested in getting into Rehabbing/ Flipping Homes. I'm a new Licensed Realtor and am wondering are there any special loans/grants that could assist me with investing in rehabbing properties? I have reached out to a few investors but they are more interested in investing in someone that has experience in this business..

In addition, how much financing do I need to get started if I'm looking into properties between $70,000 to $120,000?

In addition, how much financing do I need to get started if I'm looking into properties between $70,000 to $120,000?

John Pearson · Answer

Alicia,

if you have decent credit scores you could try Rehab Financial. Think about using a partner on the first couple of deals to build up your bank roll. I have done this in the past but I caution you to be careful as money makes "partners"'do funny things. I personally do not use partners anymore as I need to control where my money is being spent. I do, however use friends/consultants as a second set of eyes or opinion.

Raymond B. · Answer

@John Pearson,

Welcome to the Best Real Estate Site on the Net.It is always nice to see another Ct., resident in the forums.Click on the "Education Tab" at the top of the page, and you could be spending many hours on the Information that is available.Raymond

John Pearson · Answer

I am a licensed contractor in CT, and my first flip funding came from an investor that we have done the rehab work for. He loaned me 100k at 9% with 0 points interest only. Additionally I have a business line of credit that can be tapped into if needed. My first deal I purchased for 55k, property was off market and will need 45-55k. In the end property will be listed for about 205-210 based on current market conditions.

Mags S. · Answer

also talk with your real estate broker.  If they are experienced in many phases of real estate, they may have connections.  There are several r e brokers in my area that also lend monies to investors

Kevin Martinez · Answer

It's definitely possible to invest with little to no money. It may require you to be creative though if you don't have the financial resources. You could also try to wholesale first to build some capital so that when you're ready for a flip you have some "skin" to put in the game.

Alicia Austin · Answer

Oh wow thanks Abel for the great advice.. I will definitely check out Brandon Turner's book as well as reach out to fellow members who have experience in the business...

Abel Curiel · Answer

Hello Alicia,

Traditional financing for flips is different than it is for properties that are move-in-ready. Lenders usually require a more substantial down payment and sometimes make it difficult for borrowers to obtain loans on distressed properties.

There are, however, lenders out there willing to loan money for these kinds of projects. I would check out some of the resources here on BP to get a better understanding. Brandon Turner of BP wrote a book on investing with little or no money down. I would also check out some of the forums and blogs that have been written on the subject.

Lastly, reach out to some fellow members who have experience flipping homes in your area. You can also reach out to some lenders who are active in the BP community.

Best of luck to you!

-Abel

Alicia Austin · Answer

Kevin, thanks for your response.. I am not looking into investing any of my own money at this moment. If I need to, the most I can do is around $5000 which is not much at all.. I am looking for investors but if I can't find any then I will try bank loans if possible..

Kevin Martinez · Answer

The amount of financing you need is more specific to the property you are purchasing, the amount of repairs needed, holding costs, closing costs, financing costs, your holding time and other miscellaneous costs associated. Are you going to be putting any of your own money in? What type of financing are you trying to acquire