Becoming a real estate investor by flipping houses is a great way to start a new career. But you will need to understand some of your options to get your first Loans To Flip Houses in Arizona.
Entering the real estate industry is a great way to grow your personal wealth, be your own boss and have the opportunity for almost unlimited income if you are willing to work hard enough. But what stops many people is the challenge of securing the first few Loans To Flip Houses in Arizona. The old saying that you need money to make money could not be more true than in the flipping business. Getting the first few projects completed at a profit is what allows you to continue to make more purchases and more profit.
One method used by many homeowners who are interested in flipping is called cash-out refinancing. This process basically allows homeowners to use the equity in their personal home to finance their first flip. You will be refinancing your current home for a new mortgage which is greater than the amount that you currently owe on the home. Then you have the excess cash to uses to make the down payment on your flip property as well as any repairs or renovations that you are going to make.
Cash-out refinance Loans To Flip Houses in Arizona will require that you have a minimum credit score of around 650 and that your debt to income ratio is below 45%. It is also recommended that you have 30% to 40% equity in your home. If you meet these qualifications then you are certain to be able to get a much better interest rate on your refinance than you would be paying if you were to use a credit card or some type of personal loan to finance your first flip.
Added Costs
Because these Loans To Flip Houses in Arizona are a mortgage refinance, you will be paying some additional fees that you would not be facing if you were to use a personal loan or credit card. In most cases, you will be required to pay closing costs of anywhere from 3% to 6%. In addition, you could end up with a higher interest rate on the refinance than you had on your original mortgage so that could cost you more over the life of the loan.
Compare Total Cost
In the end, you are looking for the most affordable financing that you can find to begin your flipping business. So most new flippers will explore all of their options and compare the total cost of each lender and type of loan. Options such as Arizona Hard Money Loans and home equity loans or a home equity line of credit might be a better option for you, but you will only know once you have completed an exhaustive search of all of your options and then compared the total cost of each option. Getting the lowest cost on your first few loans could be the difference between making no profit and leaving the business or making a solid profit on each flip and growing your business.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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