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Hard Money Lending & Private Mortgage Lending- How it Works

Private Hard Money Lending explained. The first in a series of short videos about hard money investing, borrowing and brokering from Trent ...

Everything You Should Know About Fix and Flip Loans

Popular HGTV shows such as “Flip or Flop” and “Flip It to Win It” might give the impression that fixing up a house and making money off it is simple — all you need is a little home improvement funding , and suddenly you can turn a profit.

Real life, though, isn’t so simple. In fact, you could lose money if you aren’t careful when managing your project, warned Daniel Sasson, a real estate agent and home flipper.

Fix and flip loans can be a way to ease the process, but before you borrow, here’s what you need to know.

What are fix and flip loans?

Unlike a conventional mortgage — which is a long-term loan made by a traditional financial institution for a house you plan to live in — fix and flip loans are for a short duration and often are made outside the traditional financing system.

“In many cases, a fix and flip loan is issued by a private investor or business as a hard money loan,” said Sasson, who works at Florida Cash for Home . “They are typically short-term loans meant to be used on a property you’re fixing up with the intention to sell for a profit.

How an Investment Loan Can Help You Build Wealth

Every time I walk by an abandoned storefront downtown, I think about buying it for cheap and turning it into a thriving (and profitable) coworking space . However, I know I don’t have the capital available for such an investment.

One way to get the money needed is to borrow it. An investment loan can provide you with what you need to buy and fix up a property, or grow your existing business. Here’s what you need to know.

What is an investment loan?

“These are loans designed to help you fund a potentially profitable project,” said Paul Koger, the founder of investment website FoxyTrades . “They can be a great tool to help you fund the growth of your company or your wealth.”

He said some of the most common uses for investment loans include:

Buying an investment property (usually meant for rentals or commercial businesses) Purchasing equipment needed for your business Building a factory Buying a competing company

Most people and businesses don’t have the cash available to make such large purchases. With the help of an investment loan , it’s possible to get what you need to move forward without needing to come up with the money entirely on your own, said Koger.