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The Art of Fix and Flip

To successfully invest in a 'fix and flip' property, you do not need perfect credit, but you must have some cash. Your costs will consist of down payment money and fix up money.   Some mortgage companies offer an alternative short term loan specifically geared toward the fix and flip market.  They work very similar to a construction loan where the cost of the property plus the budgeted costs to fix it up are loaned to the qualified party.  The funding is provided through phases of the project are payed for by withdrawing funds from the account.  Thus, you pay interest only on the portion you withdraw from the moment you withdraw them.

The average turnaround on a 'fix and flip' property is 90 days from close to cash. (30 days to fix it up, 30 days to sell it on the market, 30 days to close) This process can be done quicker of course, under the right circumstances. This process can also take longer if you don't get the property in selling condition in this time frame, that will be your biggest hold up.  If you are not a full time fixer uper - I would recommend that this process be handled by contractors.  In other words if this is a part time job you will get the most out of your money when using professionals to handle the fixing process for you.  Decide what kind of an investor do I really want to be....

It is critical when investing a in a 'fix and flip' that you do not overpay for contracting, which will directly affect your profit. As a REALTOR, I can help as I have built relationships with contractors and have handy resources in the Austin metro area.  However, it is even more critical that you make your money on the buy side.  What does that mean?  I mean that the home should be priced below market value -at least 20%, for most of the investors that I work with in this market to even look at it!  That is where the money is really made -on the buy side!!  -Let my negotiation skills and knowledge of the market help you!

Many 'fix and flip' investment properties can be funded with hard money.
Hard money is a loan for anyone looking to rehab a property. They could also be a temporary personal loan, or a construction loan depending on how the bank structures the loan.
Often, there is no denial of funding contingent on the condition of the home, unlike traditional mortgage loans.  That's because there is no mortgage on the home.  Therefore, traditional requirements are bypassed.
Hard money is treated as a cash offer in the real estate market. There is no appraisal of the home and typically, no lengthy process. Usually, the buyer must contribute $5,000-10,000 and the remainder of the sales price is funded buy the hard money lender.
Less! A hard money loan typically has $500-700 in costs. A mortgage funded by conventional lending typically has $3000-$4000 in costs. The interest rate on a hard money loan is higher. However, it would take 6 months or more to catch up on those fees associated with a conventional mortgage.  It is good to work with a local lender on this as they have first hand knowledge of the real estate market in the Austin area.  Therefore, they understand the value of the deal!
The first step in attaining this type of funding is a one-on-one meeting with me, where we can review your profit goals. 
 
If you would like to know more about this process and what the possibilities are...contact me!