Your Guide to Rehab Loans for Property Investors
There are different ways real estate investors go about acquiring an investment property as well as various strategies on how to use that property to create income. Typically, though, a real estate investment is used as a rental property to create recurring revenue, or a distressed property is fixed and flipped to profit from the value after repair value in a sale. Often, flipping houses are funded by a fix-n-flip hard money lender.
Introduction: What is a Hard Money Rehab Loan? And Why Would I Want One?
A rehab loan is a type of financing that an investor can use to purchase an income property that needs significant repairs. These loans can go by several different names such as “fix and flip” loans, private money loans, or you might hear someone refer to it simply as a flip loan. Regardless, the loan amount is being issued by a private lender instead of a traditional lender.
A rehab loan can be an excellent option for people who want to buy a property but don’t have enough money saved up to do so, especially if the borrower has the skillset to renovate a property themself in a timely manner.
Rehab loans are usually secured by the property being purchased. The lender will take ownership of the property until it is paid off in full, which means that the borrower has to make all of the payments on time or risk foreclosure.
Hard Money Loan Great for Flipping
Hard money lenders are great funding options for flipping houses because they are short-term loans that typically require little in the way of money down and can allow for quick closing. Most rehab projects are done within 6 months and are turned for profit. Hard money lending provides favorable speed and terms for these short projects.
Flip loans minimize the amount of money an investor has to put in up-front enabling a newer investor the ability to get started. It can also aid a seasoned investor to fund multiple concurrent projects. Some real estate investors even use the BRRR Method (Buy, Rehab, Rent, Refinance, Repeat) to build up a portfolio of rental properties and fund ongoing rehab projects. A private money loan is a great way to get started with this strategy.
House Flipping Loan Approval with One West
Every lender’s process is slightly different. This is true whether you’re dealing with a private money lender or a conventional lender. If you are a real estate investor interested in a hard money loan from One West, here are the things you need to know about our loan approval process.
Our pre-approval is simple. We require 10 simple pieces of information from the borrower to get started
2. Receive Firm Approval
Once we have all the pre-approval info to review, we will quickly qualify the borrower and quickly move to firm approval.
3. Find and qualify purchase property
Once you’ve received firm approval you are free to search for the right investment property at the right purchase price for you. Our experts are here to help get the right property under contract.
4. Walk Through With One West
One of our representatives will meet you at the property site and conduct a walk thru with you.
5. Target Close
Once we’ve conducted a walk thru we’ll set a target close date and finish things up so you can get started on your project.
Call One West Hard Money!
One West Hard Money has the expertise to be your flip lender in the St. Louis area. With nearly 20 years of experience, count on One West to help you rehab houses with hard money loans.
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