As a short term investor who is looking to buy and renovate a house before flipping it for profit, you require to use the fix and flip loans. You will have a very fast closing for the property in the condition it is. There are various types and of fix and flip loans like the hard money loan, cash-out refinance loan, bridge loan among others. The one you require will be determined by your situation at the time of your application. We will now take a hander at how you can choose the right lender for the fix and flip loan you require.
You should start by looking at the term of the loan amount that you can access from the hard money lender you choose. You should see to it that you pick one who is able to offer you an amount that is enough to buy and rehab the house or houses in question. This will ensure that you get an amount that is enough to get you kick-started. The second terms and conditions you ought to look at is the interest rates you will be offered. You are looking forward to sell the house and make profit out of the sale.
Therefore, you have to make sure that the loan you get charges an interest rate that will not eat up all your profits. You should make sure that you get the very competitive interest rate among the hard money lenders. This will see to it that you improve your return on investment. Moving on, you ought to think about the term lengths that you will get from the fix and flip money lender. You will require that you are offered enough time to renovate the property and get it back on the market.
Therefore, you have to make sure that you are offered enough time to do all this without rush as it may affect the quality of the renovations. You should as well inquire if there is a possibility to extend the term limits and the penalties that you may incur. The one that offers that offers the best option on all these ought to be chosen as the right hard money lender. You should as well take a look at the repayment terms you are offered. The one you choose should offer you the option of interest only payments. This is where you pay the interest without affecting the principal.
To save money, you can look for where you are offered an option to pay the money early without adding a penalty. The next area of interest should be time to approval and close. You will find those that offer a 24 hours approval and close or those that require a number of days to approve the fix and flip loans. You will have to look for where you will get the approval and closing early enough and where the terms are very attractive.