How to Get Money to Flip Houses

Flipping houses has become a popular way to try to make a lot of money in a short amount of time. There have been a lot of television shows featuring home flippers that make it look easy. Flipping a home basically means to buy a home for a low price, do a lot of work yourself, obtain sweat equity and then sell the house for a large profit. There is a lot more work involved than you might think, but the first and one of the hardest things you must do is secure funding to buy the house you want to flip.

Difficulty: Moderate

Instructions

Things You'll Need:

• Financial documentation
• Down payment

Getting Funds

1. Get you're finances in order. Being able to show you have sound financial resources will help you be able to get a loan and to prepare you to use other sources of funding. Pay off credit card bills, consider moving stocks and investments to more secure investments. Check your credit report (see Resources) and look for any areas that are incorrect or need fixing.

2. Make a business plan. This will not only help you identify your costs but will be good to show your lender how you plan to succeed and if it is realistic for them to expect you to repay the loan. In the plan, include answers to all relevant questions about how each step will be achieved. Be sure to include a time line with alternative options.

3. Apply for a loan. If you have good finances, a good business plan and a house that you are interested in, you can try to get a mortgage. Even without a house, you should try to get preapproved for a mortgage. Traditional mortgage lenders take a month or two to close on a loan, so if a traditional bank won't work, consider borrowing from a private lender (see Resources), sometimes called hard money lenders.

4. Find the money for a down payment. After you have secured a loan for the mortgage, consider using a low interest credit card or getting a home equity line of credit. You should be able to pay this back quickly if you can effectively flip the house.

Tips & Warnings

• Consider working with others who have experience in the areas you'll need to flip the house. Get other business partners to help you get a loan.
• Don't borrow money if you have no way of paying it back should a flip go wrong.

References

• How to Get a Loan to Flip Houses

Resources

• Hard money lender
• Free credit report