Flipping houses can be a very profitable business once you have the means to finance the purchase. Using home equity Loans To Flip Houses in Arizona is one solution.
Flipping houses is a fast-paced business and having instant access to funds when you find a great property is critical to your success and longevity in the business. Traditional lenders just can’t meet the timetable to be a useful and reliable resource for most house flip purchases. But if you own a home outright or you have a great deal of equity in your home, then you can put that to use rather than searching for other types of Loans To Flip Houses in Arizona.
Many homeowners are offered preapproved home equity loans or a home equity line of credit when the amount they owe on their home is far less than the value of the property. These funds can be used for anything that the homeowner chooses and the loan is basically a second mortgage on their house. This fast access is great for flippers who want to buy a place fast, add some value and then sell it quickly. The money from the home equity line is only used for a short time and the homeowner does not pay a huge amount in interest or in fees and closing costs.
Another benefit of using home equity Loans To Flip Houses in Arizona is that the interest rates are much lower than those of a short-term hard money loan or a personal loan. Most banks offer very competitive rates for a HELOC or a home equity loan to entice homeowners into using the money. Most traditional lenders are offering rates anywhere from 5% to 9% while hard money lenders could ask in the neighborhood of 15% or even 20% for a short-term loan. That will greatly reduce your potential to turn a good profit.
The Down Side
There is a definite downside to using home equity Loans To Flip Houses in Arizona. Not only are you risking the house that you are flipping if you can’t make the payments but you are also risking your own home if you run into trouble and the flip loses money or you are unable to sell it quickly. It is always important to consider what you are risking and how you will carry all of the payments in a worst-case scenario.
Evaluate Your Choices
As a brand new flipper, risking your personal home on a new business venture might not be the best choice. You are already in a position of a great stress as you learn the new business and having your house on the line will only add to that stress. But as you become more experienced and understand the process, the stress and the level of risk will decrease. At that point, using the equity in your home will open up new opportunities for you as the funding is instantly available. In addition, the lower interest rate will help to increase your profit margin and allow you to grow your house flipping business even faster.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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