For more Real Estate Learnings go to: RehaHardMoney.com
Many neophyte rehabbers ask whether they can actually flip a house without shelling out a single penny. That will probably lead us to the question: Can hard money, which is the No.1 source of financing for flipping houses, actually finance 100% of a fixer upper project?
Actually, yes, a hard money loan can answer all your expenses when flipping a house, including repair costs. Let’s clarify this tough. Hard money lenders technically do not answer repair costs but these expenses are usually covered as will be shown in a sample computation here.
Since hard money lenders base their decision whether to approve the loan on the fixer upper in question, they also compute the amount based on the property. Rates differ but the 70% of the ARV, or after repair value, is usually given by lenders to borrowers. The ARV is the value of the property once it has been repaired.
For example, if the ARV of the property is $150,000, the lender will grant you a $105,000 loan. If you brought the fixer upper for $90,000 and will spend $15,000 on repairs, your total expenses will be $105,000. In this case, the loan covered 100% of your fixer upper project. That means you closed a deal without spending a dollar.
Your profit will be $45,000 less the interest and other fees imposed by the lender. What will be left of it is still substantial money, considering you did not have any capital for the venture. That makes flipping houses attractive to many businessmen.
You can learn more about hard money financing online at RehabHardMoney.com. Rehab Hard Money answers frequently asked questions about hard money financing and how it can help beginners in the flipping houses business. www.RehabHardMoney.com allows visitors to pre-qualify for hard money loans anywhere in the country just by filling out a form. After signing up, you will also receive two FREE reports from Rehab Hard Money to make it easier for you to understand how the system works. Visit Rehab Hard Money today and start flipping houses with zero capital.
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