You’ve found the perfect house to flip, and you know what that means—it’s time for renovations. Depending on how much work your residential investment property needs to be market-ready, renovations can range significantly in scope, timelines, and cost. It’s not uncommon for residential investors to spend several thousand dollars giving their property the facelift it needs to compete.
Until recently, financing renovations meant a complicated, stressful trip to the bank. Today, however, real estate investors have far more options when it comes to securing funds to put towards their investment properties. Here are just a handful of the options available to you when it’s time to finance residential property renovations.
- Dip Into Your Savings
We’ll start with the obvious here. If you have a significant enough savings that you can afford to dip into your nest egg to fund renovations, this can be a simple, streamlined option.
Cash flowing your renovations has the obvious advantages of not having to involve any outside parties in your business decisions, not having to wait around for your loan to come through, and not racking up any interest. However, not everyone has immediate access to enough liquid funds to feel comfortable going this route.
- Traditional Loans With Banking Institutions
For decades, homeowners and investors alike have sought financing with their local banking institutions. Most banks offer a handful of funding options for things like renovations—refinancing, home equity lines of credit, and FHA 203(k) mortgages, to name a few. Acquiring a loan from a banking institution can be a good option if you have stellar credit and aren’t in a huge rush to get your renovations taken care of. However, borrowers with imperfect credit or who want to access their funds quickly may become frustrated with the institutional loan process.
- Private Loans
Private money lending is similar to institutional lending, except that private lenders tend to have a lot more options when it comes to setting you up with a loan that works for you. Even if your credit could be better, private lenders can usually work with you to supply the funds you need for your project at a reasonable interest rate. Private lenders are also typically able to provide quicker access to loan funds, which is vital if you’re trying to take advantage of a hot market or looking to turn a short-term profit on your investment property.
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Hard Money Lenders is a private lending organization committed to helping you finance your real estate investing endeavors. Visit THIS PAGE for more information about how we can work together.