Category Archives: Fix & Flip Loans

Top 5 Best Ways To Finance Investment Properties!

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Category : Fix & Flip Loans , Hard Money Loans , Home Equity Loan

If you have a good deal to invest in real estate and looking for the best ways for financing, you are certainly at the right place. Financing investment property is about obtaining a property for short and long-term investment. It’s a good way to gain income. Investors would either acquire a property to have it leased to generate revenue or have it renovated and sell it at a higher price. Here are top 5 best options for you to finance your investment properties:

1. Traditional Bank Loans:
This is the first and most common method for financing investment properties, but you need to have a solid credit rating and be financially stable before trying to invest in properties. You can borrow money from banks, credit unions, home mortgage companies, and other financial institutions. Most of these lenders require a high credit score and a full documentation of your income and debts. You also need to pay out at least a 20% down payment. Because these complex loans requirement and a large down payment, real estate investors are less likely to default and tend to have a more secure financial standing.

2. Fix-and-Flip Loans:
A fix and flip loan is short-term loan secured by the property. Fix and flip loans work a little differently than conventional loans. It’s much easier to obtain in comparison to conventional loans. A fix and flip loan is suitable for financing investment properties if the purpose of your investment is renovating a real estate property and then putting the property for sale to earn profit. If you are sure you can turn a profits, a fix-and-flip loan is a great option for financing investment properties.

3. Home Equity Loans:
If you have significant equity in your existing property or primary residence, you can easily opt home equity loans. You can get as much as 80% of a home’s equity value in a loan to buy an investment property. The lender will give you the funds upfront, and they will be required to make a fixed payment each month. This method can be a more secure way for financing investment properties because you will have some collateral to back them up if your investment doesn’t work out.

4. Private Hard Money Loans:
This method for financing investment properties is commonly used when real estate investors believe they can raise the value of the investment property over a short period of time. Hard money lenders offer loans for flippers and real estate developers on slightly different terms than banks. They give cash for buying an investment property in exchange for a specific interest rate. These loans are the best choice for those people who don’t necessarily have great credit but require quick money to finance their investment properties.

5. Search For A Investment Partner:
If you want to invest in a real estate property, but the price range is outside of your budget, you might consider adding an equity partner to your team. Real estate partnership can be a win for both parties and is very beneficial to new real estate investors. You can use the partner’s cash for financing the entire property or use a partner to only fund the down payment. There are no set rules, but each deal requires its own examination of who makes the decisions, how profits will be split at the end, etc. However, partnerships can also cause more troubles than a single head, especially if each one of them is thinking in its own way and considering only its own gains. So make sure you do not do partnerships with just anyone who is not reliable.

The Bottom Line:
There are many different ways for financing investment properties, but you need to find the most suitable way to keep your investment property moving forward. Finding the right method of financing investment properties is key to your success, so make sure that it fits the type of program that you’re planning to invest in. For more information about financing investment properties, contact Magna Capital Group, Inc. today at (310) 734 4044 or email at info@magnaloans.com.

Top Three Financing Options For Fix and Flip Investors

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Category : Fix & Flip Loans , Hard Money Loans , Home Equity Loan , private money lenders

Flipping a house is a form of real estate investment that involves purchasing a house or property, fixing it up and selling it quickly. To get started, you will need capital to purchase and renovate a house before you can flip the house for a profit. Here are the costs involved in flipping a house:

  • The purchase cost of the house.
  • Rehab costs.
  • Appraisals and inspections carried out on the property.
  • Holding costs, Realtor fees, and closing costs.
  • Loan interest and fees.
  • Down payments on loans.

Now you will have to look at how to cover these costs. Luckily, there are four fix and flip financing options available to flippers:

1. Traditional Bank Financing:
The first place you might look for a loan is your local bank. This is where the bank pays for the property and you pay the mortgage payments until the house is rehabbed and sold. You will need good credit and good track record of successfully flipping houses to qualify for a traditional loan. If you have bad credit or low credit score, there is no chance to get a traditional fix and flip loans for you. In this situation, you can consider the second financing option that is hard money loans.

2. Private Hard Money Loans:
A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by real estate property. Hard money lenders make loans for flippers and real estate developers on slightly different terms than banks. They provide hard money loans which are best for experienced or inexperienced flippers who need money quickly. These loans are designed for people who don’t necessarily have great credit but need money to complete their renovations.

3. Home Equity Loan or Line of Credit:
A home equity loan is basically a second mortgage and you are repaying the loan over a fixed term. A home equity line of credit usually comes with a variable rate, but you can draw against your credit line whenever you need extra money. So, if you have significant equity in an existing investment property or primary residence, you may consider tapping that to fund your house flipping project. The biggest issue with this financing option is that your house serves as the collateral and if you fall behind on the home equity loan or line of credit payments, the bank could decide to foreclose on your house.

The Bottom Line:
House flipping is not only for the rich but also for the resourceful! The key is finding the right solution for your unique needs. These are top three ways you can finance house flipping projects. Out of these three fix and flip funding options, the best one for you depends on the type and condition of the property, your experience with real estate investment, and your personal financial situation.

If you are a fix and flip investor with imperfect credit who is looking to buy discounted properties, fix them up, and sell/flip them within 12 months, then consider hard money loans for the capital you need. Magna Capital Group, Inc. is a reputable hard money lender in California. We offer financing options to real estate investors looking to renovate and resell residential and commercial properties. We provide the best loan programs to meet your financial goals. If you feel that a hard money loan is right for you or if you have any query, feel free to call us now at (310) 734 4044 or email at info@magnaloans.com.

Five Simple Requirements Of Getting Hard Money Rehab Loans

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Category : Construction Loans , Fix & Flip Loans , Hard Money Loans , Hard Money Rehab Loans , private money lenders

A hard money rehab loan is a short-term financing option used by real estate investors to purchase and renovate investment properties. Hard money rehab loans allow investors to purchase homes in need of renovation and rehabilitation under terms that are more flexible than traditional, long-term mortgage loans. Rehab loans are issued as a percentage of a property’s expected after-repair-value (ARV). A property’s ARV is equal to the expected amount the property will sell for after all renovations are made.

Hard money rehab loans usually have a quick approval process, 06-12 months financing terms, and good interest rates between 7.5% – 12%. Hard money lenders offer rehab loans of up to 75% ARV and can get investors funded in as little as 10 days. Further, they fund the purchase and renovation of both single-family homes and multi-unit properties, as well as offer interest-only payments, making it a good option for rehab investors.

If you found the perfect Rehab or Flip Deal and can’t find a traditional bank to lend or approve the financing you need, hard money rehab loan would be the best option for you. You can utilize easy lending criteria and quick closing services of a hard money lender that will finance a rehab loan quickly than a traditional bank. Every hard money lender has a set of requirements to fund and close a rehab loan. Here are some of the basic information required by most hard money lenders:

1. Interior And Exterior Photos Of The Property
You will be asked to provide photos of the exterior and interior of the subject property. For external photos, it would be ideal to provide a front, rear, sides of the property, as well as street scenes. For the interior, a few images of the various room, units, property amenities and good to see images would be helpful. You can also provide extensive photos of the property areas that will be repaired, replaced or removed, digital copies and a walk-through video. The more pictures submitted, the better the chances of approval.

2. Bid For Repairs:
Hard money lenders will require written estimates in order to process rehab loan application. You can contact a local contractor, handyman or repair specialist and get written estimates. Also, if you plan on painting and doing the make-ready yourself – still get a bid for repairs to give to your potential hard money lender.

3. Purchase Agreement:
They will need to see a signed copy of the purchase contract, the title company, and special escrow funding instructions if any. A real estate purchase contract is a binding agreement between two or more parties for the purchase, exchange or other conveyance of real property. Showing them a copy of the contract you plan to use is still a smart move and will make your property report compete and legit.

4. Proof of Insurance (POI):
You will need to provide proof of insurance to your hard money lender. It’s a type of documentation that a person can provide to another individual proving that the person has valid insurance with an insurance company. You can contact your insurance agent and get a quote for liability and hazard insurance for your hard money lender. This will ensure that the lender will be repaid in the event of the severe act of vandalism or catastrophic loss that occurs.

5. Preliminary Title Report:

This document is a tricky one. Some hard money lenders prefer to work with the certain title company. If you have a preliminary title report or confirmation that there is not a clouded title share this information with your potential hard money lender, else you don’t need to purchase title insurance or a full certified report.

Each hard money lenders have their own unique set of requirements based on their lending area, property purchase price, commercial vs residential, and loan repayment terms, but they always like to work with well informed and serious real estate investors.

The Bottom Line:
Hard money rehab loans are great for the fix and flip projects and for buying rental properties that need a small repair work done. Hard money rehab loans offer real estate investors a short-term loan with interest-only payments, quick approval times, and facilitate both the purchase of a house and it’s rehab costs into a single loan.

If you are looking for hard money rehab loans, take a few minutes to read these basic requirements to get your real estate investment deals funded quickly. To apply now or to get more information on our hard money rehab lending programs, contact Magna Capital Group, Inc. today and speak with one of our expert representatives at (310) 734 4044 or email at info@magnaloans.com.

4 Best Financing Options For Fix and Flip Business!

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Category : Fix & Flip Loans , Hard Money Loans

House flipping is a type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. A fix and flip is an excellent way to quickly make money from real estate, and with wise decisions, can be a long-term investment or retirement strategy. A lot of people dream of getting into the business of fixing and flipping houses, but funding is the number one obstacle. You need capital to purchase homes and cover the cost of renovations before you can flip them for a profit.

House Flipping is not just a matter of buying a house and selling it for a profit, but also there are so many costs involved. For examples:

  • The purchase price of the house.
  • Rehab costs.
  • Appraisals and inspections carried out on the property (for example for beetles, pests or foundation inspections).
  • Holding costs, realtor fees, and closing costs.
  • Loan interest and fees.
  • Down payments on loans.

If you’re thinking about flipping, you’re probably looking to acquire an investment property and then fix it up to sell at a higher price. If so, here are four top financing options to help you get started:

1. Get A Hard Money Loan: Hard money loans are the best financing option for novices or borrowers with a bad credit score. Hard money lenders can get you funds quickly to buy the house that you will flip as well as pay for any of the costs. Loan approval of a hard money loan is far easier than obtaining a more traditional loan. Hard money loans usually have terms of less than one year and interest rates of 12% to 18%, plus two to five points. Hard money lenders can finance up to 65% of the home’s ARV or after-repair value, which is what you think the house will be worth once the renovations are done.

2. Cash Out Refinance: Its best for the fix and flip investors who have significant equity in an existing investment property or primary residence, but not for those who are just getting started, or for those who still need a bit of extra funding on top of what comes from the cash out refinance.

3. Home Equity Line of Credit: A home equity line of credit is basically taking out a second mortgage as you will also be repaying it over a fixed term, often with a fixed rate of interest. It’s one the best financing option for those flippers who already own a home. Keep in mind, if you do choose this financing option, your home will act as collateral. You risk foreclosure and the loss of your house if you do fall behind in payment. However, if you are confident in your ability to flip a house, it could give you the capital you need to jump-start a new stream of revenue.

4. Conventional Bank Loan: Conventional bank loan is an another financing option that you may opt. Bank pays for the property and you pay the mortgage payments until the house is rehabbed and sold. Its best for experienced flippers who have a great credit score, capital on hand, and significant collateral. For a conventional bank loan, you will have to provide around a 20 to 30 percent down payment of the purchase price on the house you intend to flip. They will also need to know what you intend to use the money for. A traditional money lender may outright refuse to fund it if there are health and safety issues at play. While you intend to fix these issues to flip the home, a traditional money lender generally prefers to fund homes that are already fixed up and livable.

Find the Right Financing Option For You:
If you need capital to flip houses, these are 4 top financing options for flipping houses that you can use to acquire as many properties as you want. Out of these 4 fix and flip funding options, the best one for you depends on the type and condition of the property, your experience with real estate investment, and your personal financial situation. If you are beginner or borrower with bad credit score then hard money loans would be the easiest and fastest financing option you.

To get started on your fix and flip quickly, with most of the funding you need, contact Magna Capital Group, Inc. today to discuss your options. We provide hard money loans at very competitive rates with fast approval and funding. We have proven to be reliable fix and flip lenders and earned many satisfied repeat customers. For more information about loan programs, call us now at (310) 734 4044 or email at info@magnaloans.com.

Fix and Flip Loans – The Fastest Financing Option For House Flipping Business!

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Category : Fix & Flip Loans

A fix and flip loan is a short-term financing tool that enables a real estate investor to obtain the necessary capital to acquire, make repairs and improvements and then sell the property quickly for a profit. Fix and flip loans are also known as hard money rehab loans, investment property rehab loans or house flipping loans but the purpose of these loans remain the same. Fix and flip loans are either based on the current value of the property or the after repair value, but most of the fix and flip lenders prefer to loan on the current value of the property as this reduces their risk in the event that there are issues with the rehab of the property, the estimated after repair value was incorrect or the real estate market begins to decline during the rehab process.

Fix and flip financing is available from hard money lenders but not available from traditional lenders such as Banks. When applying for the fix and flip financing, the hard money lenders may consider the following about the borrower:

  • Experience in real estate and fix and flip projects
  • Purchase price of the subject investment property
  • Amount of cash reserves available for holding costs and rehab costs
  • Estimated after repair value of the property
  • Estimated cost of the renovation

Why choose a fix and flip loan?

If you are an investor or flipper interested in buying properties that require all cash or hard money to fix and flip, then only a fix and flip hard money loan can help you out. Here are some significant advantages of fix and flip loans:

  • Fix and flip private money loans provide up to 80% of the total project cost, which is the purchase price plus the cost of the rehab
  • There no pre-payment penalty which allow you to sell the property as quickly as possible
  • Fix-and-flip financing up to 12 months
  • You can qualify for fix and loans with low FICO score or even if you’ve been turned down before
  • Fix-and-flip loan rates between 7%-12%. All rates are based on the individual property and borrower. Call us to know more at (310) 734 4044
  • Quick approval and funding, 24 Hours for Approval and 7 to 10 days for Funding
  • Loan amounts: $500,000 to $50,000,000
  • No limit on the number of properties
  • Loans are available to individuals, trusts, corporations, and limited partnerships
  • Single-family residence, 2-4 unit properties, condominiums and townhouses properties are eligible for fix and flip loans
  • No hurdles- a very user-friendly and streamlined process
  • No appraisal fees (in most situations) and no hidden junk fees

The Bottom Line:
Fix and flip loans are always the most attractive option for short-term financing requirements. If you want to get into the home flipping business but don’t have the cash on hand, a fix and flip loan may be what you need.

Magna Capital Group, Inc is one of the top private money lenders in California with over 35 years of experience in residential and commercial loans. We offer fix and flip loans on very competitive rates with quick approval and funding. We have proven to be reliable fix and flip lenders and earned many satisfied repeat clients.

For more information about fix and flip loans, Contact Magna Capital Group, Inc. now at (310) 734 4044 or email at info@magnaloans.com and get your hard money rehab loan funded fast.

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