Flipping houses is an expensive proposition. It’s usually reserved for the wealthy or the bod, because there are risks involved. The number one most common mistake investors make while trying to flip a house is running out of money. Keep in mind, even though interest on borrowed money is tax deductible, typical interests rates are rising, so making a profit can be harder than it used to be with traditional funding sources. Though your profits will vary, the average gross profit from house flipping is $65,520 per house. Remember though, that’s gross profit, not net profit.
Too many times, house flippers estimate too low on renovation costs. So, a new house flipper that doesn’t take into consideration the actual cost to remodel or renovate a home they want to flip will dig into their profits. A new investor that didn’t get a thorough inspection done, wishing for the best, can find themselves facing expensive foundation repairs or electrical repairs that could make the whole project a bust. Other investors are savvy with repairs, but don’t factor in the cost of capital gains taxes. That eats at profits too, just not right away.
Just like with any business, house flipping will require patience, planning, time and money. So, if new investors who decide to flip houses for the extra money may find themselves broke if they don’t have a thorough plan and the skill and funding to see the plan through.
Are You Looking for a Hard Money Loan to Flip a House Or Buy A Rental Property?
Paces Funding is a hard money lender offering hard money loans to purchase and renovate non-owner occupied residential and commercial properties throughout the Atlanta, Nashville, Florida, or the North and South Carolina metropolitan areas. Our application process for hard money loans is easy. Just fill out this very simple online form and you will be contacted shortly. Unlike other lenders, the window between applying and funding is very small. We have funded properties in as a little as one day, but typically funding hard money loans takes about seven to ten days.
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.