Flipping Houses for Beginners: Choosing the Right Property & Securing the Best Loan
Successfully fixing and flipping a house can be a daunting task for a beginner. From finding the right property to securing the best loan, there are a lot of potential missteps that can occur throughout the process.
Close to 50% of investors lose money on their first flip and fix as a result of accepting bad deals – who you partner with at the start sets the tone for the rest of your project. DFW Hard Money breaks down what you need to watch for when setting up your venture:
Choosing the Right Property
Fixing and flipping opportunities are a dime a dozen, but it’s vital to choose the right property that will result in a profit. As a first-time buyer, you may be working with a wholesaler to simplify the search and scout potential projects. A wholesaler receives a property under contract and sells the rights of that contract to an investor just like you who will then fix and flip the property. When they sell a contract, they receive a fee.
A wholesaler is a business; their goal is to make money, too. Just as you’re likely to strike a deal with a dependable wholesaler, you’re also likely to encounter dishonest salesmen that slip hidden fees into their deals or provide inflated numbers. The wrong deal can doom a fix-and-flip project at first signature.
With dozens of wholesalers vying for your attention, how can you avoid landing in a bad position? Partner with a hard money lender from the very start.
At DFW Hard Money, our hard money lenders help first-time fix and flippers assess the value of wholesale deals to gauge whether or not they’ll result in a satisfactory profit margin for you. We recognize the red flags of deceitful terms and will steer you in the right direction to choose the right property.
Are you a first-time buyer that doesn’t have a property selected? No problem! You don’t need to have a property lined up in order to apply with DFW Hard Money; it’s not a requirement of our pre-approval process.
Securing the Best Loan
Although you may be enthusiastic about your project and eager to secure the best loan, hard money lenders may be reluctant to support you. Most lenders won’t back first-time buyers since they lack the successful financial track record lenders look for. Loaning money to a first-time buyer with no experience poses a risk to the business.
While not all hard money lenders are resistant to working with a first-time investor, a portion of the ones that do, may take advantage of their lack of knowledge. These lenders may engage in predatory lending practices that increase their own profit while hindering the success of the investor’s fix-and-flip project. This includes hiding the true risks of a loan term, changing the loans terms after the initial offer, inflating fees and costs, and charging exceptionally high interest rates.
At DFW Hard Money, our hard money lenders are 100% transparent. What you see is what you get, and what you get is the best loan terms for your project. We have completed thousands of deals – many of which were in partnership with first-time buyers! And we won’t lend on a deal that doesn’t make any sense. Our goal is to help you be successful.
Think Smart and Partner with DFW Hard Money
Are you a house-flipping beginner venturing into the Houston, Dallas, or Forth Worth real estate market? Then get in touch with DFW Hard Money today. Make your first project a resounding success supported by a level of communication, responsiveness, and understanding you won’t find with any other hard money lender.