Top 5 Best Ways To Finance Investment Properties!

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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.

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.

Finance Your Fix and Flips Projects With Hard Money Loans!

Tags :

Category : Fix & Flip Loans , Hard Money Loans

Fix and flip is really a slang term to describe a type of real estate investment deal. The real estate investors purchase an undesirable single family home at below market value and do some repairs to the property in order to make it more appealing. The idea is to significantly increase the market value of the property with the minimal expense possible so that the home can be resold for profit.

While buying, fixing and quickly reselling properties can be lucrative, it takes much more money to flip a house than it does to simply buy a house that you want to live in. Not only do you need the cash to become the property’s owner, you also need renovation funds plus money to pay for property taxes, utilities, insurance and loan interest from the day the sale closes through the rehab work and until the day it sells.

Unfortunately, many people struggle to find financing to buy fix and flips. Hard money loans are the best financing source for them. Hard money lenders provide loans to experienced or inexperienced flippers who need money quickly. Hard money lenders do not require the same amount of time and paperwork as traditional banks. Instead, they evaluate the property itself (both before and after improvements) and your ability to successfully complete the project.

Here are some important reasons that house flippers use a hard money loan instead of a bank loan. Compared to a bank, hard money lenders typically:

  • Can give you a quicker loan quote
  • Can fund a loan much faster
  • Don’t always require third party appraisals
  • Make loans on distressed homes that need rehab. Many banks won’t touch this type of property
  • Rely heavily on the value of the property. Banks typically rely heavily on the borrower’s credit
  • Have much shorter approval process, less red tape, and less paperwork
  • Don’t have maximum exposure limits to one borrower

The Bottom Line:

Hard money lenders play a vital role in the financing of all kinds of real estate investments and especially for flipping houses. A hard money loan is good for the experienced and inexperienced fix and flippers. The use of hard money in your house flipping business can be a tremendous benefit, increase your margins, help you grow your business, and allow you to diversify your risk. However, you just need to do your homework, ask questions and minimize the risks that come along with the use of outside capital.

If you are an investor who is ready to make an offer on a property and you need financing or just want to get pre-approved loans, then you have come to the right place! Magna Capital Group, Inc is one of the most trusted hard money lenders that can help you achieve your house-flipping dreams. We provide fix and flip loans across California. Our interest rates start as low as 7% and monthly payments are interest-only. Further, pre-qualification takes few minutes and funding happen in 10-15 days.

For more information about our fix and flip loans program, please feel free to call us today at (310) 734 4044 or email at info@magnaloans.com.

 

Top 5 Situations For Whom Hard Money Loans Are Ideal!

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Category : Hard Money Loans

Hard money loans are quite different from bank loans. A hard money loan is simply a short-term loan secured by real property. The terms are usually around 12 months, but the loan term can be extended to longer terms of 2-5 years. The loan requires monthly payments of only interest or interest and some principal with a balloon payment at the end of the term. Interest rates for hard money loans range from 10-15% and points can range anywhere from 2 – 4% of the total amount loaned.

The amount that hard money lenders are able to lend to the borrower is primarily based on the value of the subject property. Many hard money lenders will lend up to 65 – 75% of the current value of the property. Some lenders will lend based on the after repair value (ARV) which is the estimated value of the property after the borrower has improved the property. A borrower can get a hard money loan on almost any type of property including single-family residential, multi-family residential, commercial, land, industrial many other types of properties that fall outside of the conventional parameters likes rehab loans, construction loans, bridge loans, land loans, mixed use property, non-owner occupied rentals used to secure startup capital for new ventures.

Hard money loans are ideal for below top 5 situations:

1. Fix and Flips
2. Land Loans
3. Construction Loans
4. When the Buyer has credit issues.
5. When a real estate investor needs to act quickly

Why should use a hard money loan?

Borrowers choose to use hard money loans for many different reasons. Hard money lenders have the ability to fund the loan quickly. In most situations, hard money loans can be funded within a week. The ability to obtain fast funding is a significant advantage for a real estate investor. Especially when the real estate investor is trying to acquire a property with many competing bids, a quick close with a hard money loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing.

Hard money loans are backed by the value of the property, not by the creditworthiness of the borrower. Borrowers who are rejected or cannot find conventional financing due to their low credit score, bad income history, a recent foreclosure or short sale, they can still obtain a hard money loan if they have sufficient equity in the property that is being used as collateral. The hard money lenders provide you flexible loan repayment terms. So, if times are tough you can get by with only paying interest each month or with only paying the balloon repayment at the end. This makes it easier for you in the long run instead of causing you to make a hefty payment each month.

Conclusion:

Hard money loans are the faster route to financing than bank loans. They have relaxed approval standards, are fast to get, and require less paperwork. Hard money loans may be wonderful for you when you need them in a crunch and can’t get the money from anywhere else.

You can consider a hard money loan to fund one of your future real estate deals. If you have questions or would like to receive additional information about hard money loans, please contact Magna Capital Group, Inc today at (310) 734 4044 or email at info@magnaloans.com.

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