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bkb1956
bkb1956, Finance Enthusiast
Category: Finance
Satisfied Customers: 2845
Experience:  IRS Enrolled Agent, 18+ years of experience in tax preparation with associated finance experience.
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I want to buy a house, then flip it within a year. Have

Customer Question

I want to buy a house, then flip it within a year. Have credit score approx. 725. Already have rent to own agreement which is running out in 3 months. Have agreed price of 68,000 to buy at any time between now and Sept. 30. Was a year contract.
Have already renovated entirely to be complete within a week. Put in approx. 20,000 plus
many months of hard work. Don't want to loose that investment. Don't trust the owner and
want to close ASAP then put it up for sale. Not living in it.
What is the best source of capital for this investment? Ordering an appraisal this week.
Should come in at around 125,000 conservatively.
Just want to borrow 68,000 until it sells, could be weeks, could be months. Hopefully no more than a year. Corner lot on high volume traffic count zoned residential/commercial.
2 houses up from my business. Same house and square foot as mine. I paid 127,500 nine years ago.
Is this a question for a banker or can you help me?
Submitted: 5 months ago.
Category: Finance
Expert:  bkb1956 replied 5 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Fixing and flipping houses costs a lot of money. In addition to buying the home, you will need to pay for repairs, contractor fees, listing and broker fees, and more. Merrill says there are three main kinds of financing for flipping houses. There’s also a newer fourth option (crowdfunding) that is increasing in popularity:

  1. Hard money lenders – Best for novices or borrowers with a bad credit score
  2. Private money lenders – (same as above) Best for novices or borrowers with a bad credit score
  3. Bank financing – Best for experienced flippers who have a good credit score and some capital on hand from other sources
  4. Real estate crowdfunding – Best for experienced flippers who need money quickly

The following links contain excellent information for financing which you will find helpful:

http://fitsmallbusiness.com/fix-and-flip-loans/

https://www.biggerpockets.com/renewsblog/2014/08/24/4-proven-ways-can-get-loan-flip-houses/

Based on the information you have provided, #3 should be your first choice, especially if you have a bank that you currently do business with for other matters, but you will also want to contact other local banks in your area to compare rates, etc.

Please let me know if I can assist you further.

Thank you and best regards,

Barb