Tips on How to Choose the Best Loans for House Flipping
Real estate investors who are successful in house flipping, or those renowned entrepreneurs finding ways to leverage their multiple properties quickly, rely on hard money loans. This is a lucrative opportunity for hard money lenders to provide investors with purchasing and enhancing fix and flip properties.
Various hard money lenders in today’s marketplace offer bridge loan programs designed to meet the required needs of individual flip investors and flipping companies. Choosing the best hard money lenders for your flipping house business will be based on various factors. Thus, it is highly crucial to be aware of the important questions to ask yourself before selecting the best lender for you:
Which hard money lenders will provide value to my team?
If you’re one of the house flippers who think that all hard money lenders are generally the same, think again. They may seem to offer the same loan products that charge the same interest and points to borrowers. Because of that, it may be challenging to choose the best money lender to work with.
You need to check and probe deeper into their operations. The reality is, despite their similarities, there can be significant differences when it comes to loan application and approval, short-term loan funding, and payoff.
Which lender meets my standards?
Be diligent when choosing your lender. Lenders will ask you some mandatory questions to find out if they can work with you. Make sure to be ready in answering the following:
- How many successful house flipping projects have you completed?
- Have you had mortgages that ended up in foreclosure?
- What will be your exit strategy on this loan? How are you going to repay the principal when it’s already due?
- Do you have the cash reserves required to complete your project successfully?
- What is the status of your credit history? Have you ever filed previous bankruptcy?
Answering the questions above will establish a relationship between the lender and the borrower. Since you will be investing a lot, there should be an equal relationship. A hard money lender should also communicate with you to create the best deal possible.
How will I make a final decision between lenders?
In case you’ve already narrowed down your search of lenders who meet your specific business goals, your best choice could be the one that focuses on your business and prioritizes customer service. It is also important to consider checking testimonials. You can contact their previous clients and ask about their borrowing experience with the lender.
It will also be advantageous if you network with other investors. They can give you insights into how you should choose the best lender based on your own experience. Reviews online may not always be reliable; thus, some feedback from colleagues in the same industry can make a big difference.
Comparing various hard money lenders for your flip will help you to get the best loan for your first-time investment. There are various factors and questions to be considered and answered. Find out their differences and make sure to take note of all of them for better evaluation. It will aid you in deciding the best hard money lender to move forward with to leverage your business.
If you’re still looking for hard money lenders who are reliable and competent, end your search with DFW Investor Lending, LLC. We provide competitive, hard money lending rates to help fund your real estate projects. Our professional and highly skilled team can assist you with all your real estate needs. Contact us today!