Home > Blogs > Mark Gowlovech > Mark Gowlovech's (mg0517) Blog

The 4 Best Types of Fix and Flip Loans in Arizona

By Mark Gowlovech

Mortgage and Lending with HomeSmart NMLS 1575944 MB 0941439

March 22, 2019 12:26 PM

Getting started in the house flipping business can be challenging. But investors who know about the four best types of Fix and Flip Loans in Arizona will have far fewer challenges than other investors.

Real estate investors who are buying and flipping houses know that these short term projects need a unique type of financing. Securing a traditional mortgage for each flip requires too much time and also can be very hard to qualify for. But the smart flippers know that there are four very good options for Fix and Flip Loans in Arizona that can meet the needs of almost any borrower.

One of the most favored Fix and Flip Loans in Arizona is from a hard money lender. These are private lenders who offer loans when the borrower is willing to secure the loan with the property being purchased. These asset-based loans offer security to the lender as he or she will only loan about 75% of the property value to the borrower. This means that the borrower must make a down payment of 25% of the purchase price. This large down payment means that there is instant equity in the property and that the lender's investment is also protected as the property will always be worth more than the balance on the loan.

Flippers who own another property outright are fond of using the cash out refinance method to fund a fix and flip project. In this case, the investor will take out a loan on a property that he or she already owns to purchase a new fix and flip. Using the equity in an existing property is normally a fast process and some investors continue to use this funding method by securing a home equity line of credit on their personal home so that the money is readily available for a new deal after they sell a property and repay the line of credit.

Bridge Loans as Fix and Flip Loans in Arizona

Bridge loans are designed to be a temporary loan that is used to cover the time between two real estate transactions. It allows a flipper to buy a new project property before the last property has sold. Then when the completed property sells, you can use that money to pay off the bridge loan and secure longer-term financing on the new project if need be. A bridge loan is also a great tool for an investor who found a great deal and needs more time to secure long term financing. The bridge loan allows for a fast purchase. Then with the property secured, the investor can begin the process of applying for a more long term loan.

Longer Term Loans

There are a few online lenders who offer longer-term loans for property investors. These loans extend to 15 or 30 years and allow the investor to complete a major rehab on an investment property. No investor will keep a property that long unless the property does not sell and is then converted to a rental income property. If the fix is going to take a long time and the property has rental potential, then a long term loan could be a solid option. Understanding all of the options available and determining which loan best meets your needs is the best way to launch a fix and flip project on its way to success.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.