One should seek out multiple brokers and not rely on the first broker that has been spoken to. It is the same as choosing any other expert. You will want to be sure to shop around the Profile.market a place where you will have access to meet your financial necessity.
It is much more difficult to get traditional financing for these properties because they are looked at a little different than a primary residence.
When working on fixers you may want to consider seeking a hard money lender for financing rather than a traditional mortgage broker.
Check with your real estate agent in the Profile.market area, and you can find financing options and alternative mortgages here as well as through your real estate agent and via investment property finance firms.
Hard money lenders are willing to loan between 50 and 80% of the value of a property after repairs, whereas traditional lenders will only loan based on a property’s current value.
Because they already have local contacts it is very possible that it will be your real estate agent in that has some contacts with these investors, it might be another investor that wants to invest and makes a good return.
Traditional financing is much cheaper than getting a hard money loan. Typically interest rates range from 12-16%. Please note that you may be required to pay 3 to 5 points upfront as well.
The benefit to the investor is that hard money lenders will lend estimated value after repairs and lend money on that amount allowing you to finance all of the repairs that are needed.
Make sure you include them in your purchase and holding costs so that you end up with the profits you are looking for on the property after all is said and done and you simply look at the costs of hard money loans as a cost of doing business.
Receiving your initial loan in is your toughest. Once you do it once or twice it will become much easier.
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