Are you starting your career in the real estate industry? House flipping is a rewarding field, but there are many steps you must take to be successful.
Let’s discuss flipping 101 and why you should use a private money lender for your house-flipping needs.
Faster Approval Process
Most traditional banks require you to present multiple forms containing your financial history, credit audits, and more depending on the bank you partner with. This is a normal part of the application process but can be a significant obstacle in the house-flipping business.
Many real estate investors tend to work with private lenders for many reasons, most notably, the efficiency and speed of the approval process.
When looking to invest in a property via a private lender, you can apply, negotiate terms, and close the loan within the time it takes for a traditional bank to consider your application.
This is significant in many house-flipping cases, as time is money in the real estate industry, so investors need their money to invest, flip, and profit on a dime.
Many conventional banking institutions contain more regulated, rigid restrictions that determine the loan amount and specific loan term/interest rate. While this may be effective for homebuyers, it may prove difficult for investors.
For example, a house flipper might take out private real estate loans through a private lender. This type of private loan may allow them to choose their payback terms in a timeline that works for them.
This is an essential benefit of working with private lenders as house flippers don’t have to worry about confining terms through a standard banking loan.
How To Find a Private Lender
If you’re ready to start looking for a private money lender, look for someone who isn’t affiliated with a traditional bank.
Try checking within your current network for any professionals you might’ve worked with in the past that offers private lending. Many lenders often come from referrals within your network.
Be sure to prepare your “elevator pitch” by bringing a company overview, goals, experience, and more to stand out in your interview with the lender.
Now that you understand flipping 101 and why you should use a private money lender, you’re ready to begin your career in the real estate industry!