Property flipping is a lucrative venture for savvy investors, but only if you have the proper funding in place. Without the right capital, it’s impossible to find suitable properties and complete renovations in time to make a profit. Fortunately, there are several ways that property flippers can access the funds they need to get started — from traditional loans and private lenders to crowdfunding platforms and more.
The most common type of financing for property flipping is the traditional loan, typically obtained from a bank or other financial institution. These loans are secured by the property being bought and renovated, meaning that if you default on your payments, the lender can take possession of the house. Traditional loans usually come with fixed interest rates and repayment terms, making them a fairly predictable source of funding.
For those who don’t qualify for a traditional loan or need funds quickly, private lenders are an option. Private lenders usually offer short-term loans with higher interest rates than banks and other lenders — but they also often require less paperwork and have faster approval times, making them attractive for property flippers trying to move quickly.
More and more people are turning to crowdfunding platforms as a viable means of funding various projects, regardless of their size. These platforms offer the opportunity to gather financial support from a wide range of individuals, including acquaintances, relatives, and even strangers who believe in your vision and want to assist in bringing it to fruition. Crowdfunding platforms typically have straightforward procedures and low fees, making them an attractive option for those who prefer to avoid the complexities of traditional loans.
Other Sources of Funding
Property flippers can access additional funding options beyond traditional sources. Hard money lenders offer short-term loans that are secured by the project’s collateral, typically real estate, and require prompt repayment. On the other hand, real estate investment trusts (REITs) are publicly traded companies that invest in properties. Investors can buy shares of the trust to gain a stake in the profits. Contact Royall Capital Funding today to get financing tailored for property flippers.