Today I want to talk about accessing capital as a real estate investor. One of the most difficult things to do when flipping houses is finding capital. In this line of work, having access to funds is key, in order for you to be successful and to keep flipping. If you run into a roadblock, where your funds dry up, it can be extremely difficult. So how do you access capital as a real estate investor? Well I’m glad you asked, here are a number of ways you can access capital as a real estate investor:
1.If you already own a property, you can take out a line of credit against it or apply for a home equity loan, which will give you access to capital. Generally you can get a 70-75% (LTV)Loan to value on the equity in the property. Most banks will offer an non-owner occupied loan on the equity.
2. Depending on what your credit looks like, you could take out a cash advance on your credit cards, then when you flip the property, pay those advances back. In order to have access to those funds again.
3. You could apply for a small business loan or a personal loan with one of the peer to peer lending platforms like lending club, or prosper just to name a couple.
4. This is the last and final way, and should be your last resort if you are unable to access capital the other three ways, and that is, to borrow from family and friends. You could even add in a greater percentage on their return, to make the deal a little sweeter. You could also even offer to have them partner on a deal with you as well.
You see the main objective is to keep the cash flowing so that you can purchase, renovate and flip quickly. In order for this to work you must, I repeat you must have access to capital. If you ever notice on those flipping homes reality shows, the one thing they always talk about is the money needed from purchasing and renovating, to flipping the property. All while hopefully turning a profit.
So always remember in order to be successful at flipping houses you must always have access to capital as a real estate investor.
Hope this was informative for you. Until next time!