| There are a lot of things to consider before getting | | | | back the amount you used. |
| started. One of the most important is finding the | | | | If you intend to flip the house in a short length of |
| right kind of property to flip. You have to really | | | | time, you could just pay the interest only (if this is |
| research a house before making an offer. One thing | | | | the way your HELOC is set up) and when the |
| you need to know are the comps of the | | | | investment property sells you would then pay off |
| neighborhood. Find out what the other houses in the | | | | your HELOC. A HELOC can be very useful but |
| neighborhood are selling for. Also check for the most | | | | remember that it is a second mortgage against your |
| recently sold and how much they sold for. You then | | | | home so use it wisely. Talk to your mortgage |
| need to compare other features of the houses such | | | | company or banker to find out about HELOCs and if |
| as square footage, land square footage, condition of | | | | it is advisable for you to get one. |
| the house, etc. | | | | You can also get a hard money loan. These are |
| Another beginning step is to figure out how you will | | | | privately financed loans that have a higher interest |
| pay for it. This needs to be decided before you | | | | rate than a mortgage loan, usually 12% to 18%, and |
| make an offer. You hear a lot about no money down | | | | they are short term, usually 6 months to a year. One |
| deals and creative financing but those methods will | | | | advantage of these loans is that you can have an |
| not work in all cases, so you need to be prepared | | | | early closing, sometimes two weeks. If you get the |
| with alternatives. | | | | right property for the right price you can sometimes |
| One of the methods of financing is getting a | | | | finance the cost of the property and the repairs. In |
| mortgage loan for the property. This can be long and | | | | some cases you will have no out of pocket |
| drawn out and you will need to have good credit and | | | | expenses. You really have to look for the right deal |
| show your ability to handle the note until you can sell | | | | for these to be beneficial to you. Research these |
| the house. You will also have to have enough money | | | | loans as they can come in very handy. Your local real |
| to make any necessary repairs. | | | | estate investment club is a good place to talk to and |
| Another way to finance a real estate deal is to get a | | | | about hard money lenders. |
| HELOC on the house you are living in. A HELOC is a | | | | These were just a few ways you can find and |
| home equity line of credit that you get approved for. | | | | finance a good real estate property to flip. As in |
| You don't have to use the money, but it is there if | | | | anything to do with real estate you need to |
| you need it. For example, you get a HELOC for | | | | research, talk to mortgage companies, real estate |
| $100,000.00 (you can only get a HELOC for a | | | | agents, and other investors. The best thing a |
| percentage of the value of your house). This money | | | | beginner can do is join a real estate investment club |
| will just sit there available until you want to use it. If | | | | where you can get good advice and maybe even |
| you want to buy some investment property for | | | | get your first real estate flip. |
| $70,000.00 and need another $10,000.00 for repairs, | | | | Real estate investing is a good business to be in but |
| then you could withdraw $80,000.00 from your | | | | there is a lot of studying and learning involved before |
| HELOC. Using this method you can have a quick | | | | you take on your first house flip. Think smart and be |
| closing and be able to offer cash for the property. | | | | diligent in your efforts to learn as much as you can |
| You can sometimes get it cheaper if you pay cash. | | | | about investing in real estate before you take that |
| Some HELOCs require interest only payments to pay | | | | first plunge. |