How to Get The Funding You Need for Your Next Rehab Project
These days, house flipping is a popular investment endeavor. According to ATTOM Data, 323,465 condos and single-family homes were flipped in 2021, representing 5.5 percent of all home sales in the U.S.
But a rehab project requires a lot more than clever design ideas and a big bunch of work, although it requires both to be successful. A large part of the success equation is getting adequate funding.
What Are the Costs of a Rehab Project
First, is the cost of acquiring the house, including land, where applicable, plus closing costs.
Second, are the costs needed for the rehab project work itself. These costs will vary depending on the project’s size, cost of labor and materials, appliances, and HVAC equipment.
Third, are carrying costs. These are the costs that are spent from the time the property is purchased until the rehab project is completed and successfully flipped. Carrying costs eat into profits, so moving each project along quickly makes sense.
Fourth, are the marketing and sales costs which can include a real estate agent’s fee and will include the seller’s closing costs.
How to Get the Funding You Need for Your Next Rehab Project
Consider these funding choices:
Conventional lenders. These are banks or credit unions that provide traditional mortgages. This type of funding is often difficult to get for a rehab project.
Owner financing. This is where the property seller “lends” money to the buyer, takes a mortgage on the property sold, and then gets paid back in installments.
Hard money lenders. These are lenders that fund projects based on the value of the property rather than the creditworthiness of the borrower.
Private money lenders. These are lenders that consider funding based on the buyer’s credit, their capacity to pay, and the collateral offered.
Seek Expert Financing Assistance
Contact Atlas Capital Solutions for expert financing solutions. Our team of seasoned professionals helps businesses and entrepreneurs navigate the alternative financing landscape to get the funding that they need to grow.