In many cases, lack of financing is the biggest obstacle to proceeding with a fix and flip transaction you have in mind. The good news is that these types of transactions don’t really have to go through traditional banks, because there are better options available to an entrepreneur. Here are some of the best ways to pull off that fix and flip you’ve had your eye on.

Consider a Home Equity Loan

If you can secure a home equity loan, it will provide you with a good sum of cash which can be used immediately toward the purchase of a fix and flip property. It will also generally carry a lower interest rate than other types of loans would. The downside is that there is a risk associated with using your home to generate funding, because there’s always the possibility you might default on the loan and lose the home.

Cash-Out Refinancing

This is a process which is sometimes used by entrepreneurs attempting a fix and flip. Equity which you have accumulated in your personal home could be used to fund your purchase. In essence, you would be refinancing your current mortgage, in order to extract the difference in cash so you can pay for the investment property.

Hard Money Loans

While this type of loan generally carries a very high interest rate, you should be able to manage that because you won’t have to deal with it for very long. A typical loan term for a hard money loan would be six months, and sometimes as much as 12 months. The big appeal of hard money loans is that they are much faster and easier to apply for than conventional loans.

Arrange a Partnership

If you can find a trusted individual whom you would not mind working with, it could be that a partnership will solve your financial issues. There are a number of investors willing to provide the upfront cash for a project, in return for a share of any profits. If you can find such an individual and work with them, it could provide the basis for an ongoing relationship which could be to your mutual benefit.

In Need of Financing for Your Fix and Flip? 

If you are in need of funding so you can proceed with a fix and flip transaction, we may be able to provide financial assistance. Contact us at Commercial Capital Finance, so we can discuss some funding options which you may qualify for.