It’s well known that traditional banks are not interested in providing mortgage loans to real estate investors looking to flip. The reason is simple: they are not a profitable customer base for banks due to the short duration of the loans involved. Real estate investors must therefore look for other financing options when seeking to acquire one or more properties for holding over a short time period. Whether it’s for the acquisition of a single-family home, a multiplex or a lot, private lenders are becoming an attractive option for those wanting to quickly seize opportunities in the market.
1. Who should use a private loan to make a flip?
If you’re in no rush, your profile matches what traditional banks look for and you’re comfortable with lying about the reason for the loan (if you say it’s for flipping, your request will automatically be refused), you can always try your luck at financing your flip with a traditional bank.
However, if you are a serious real estate investor and want to make a number of real estate flips, it’s essential that you have a private lender like Victoria Financial on your side. This will enable you to acquire various properties without the constraints of traditional bank financing. You can make offers without any financing conditions because we take the time to pre-approve financing for every project before you even make an offer to purchase.
2. The advantages of opting for a private loan for your flip projects
All serious real estate investors do business with private lenders in order to acquire the most desirable properties. Here’s why:
- It’s much faster than a conventional bank. You can make an application in less than five minutes using our secure online form and get a same-day response. You can also reach us rapidly by phone to discuss your project.
- It’s a simple process. There’s no need to go through endless paperwork and comply with debt ratios to qualify. The approval of our private loans is based primarily on the net capital available on the property.
- Openness and creativity. Whether the property is vacant or requires major work, we understand that your goal is to get a return on your investment. We analyze your project from an entrepreneurial point of view in order to offer you the right mortgage.
3. Financing a flip – the secret ingredient!
Properties with the greatest potential for flipping never stay on the market for long. They often sell at a higher price and in less than a week. Having a partner like Victoria Financial will give you a head start over other potential buyers because we can provide you with a pre-approval to accompany your offer to purchase.
4.What does it take to qualify for a private loan for the purpose of flipping?
a. The down payment
In order to acquire a property with a private mortgage, you must first have a down payment of at least 25% of the purchase price. For example, if you want to buy a duplex in Montreal for $400,000, the required down payment is $100,000. You can use our mortgage calculator to determine the maximum possible financing for a property.
b. Funds for the renovations
You will also need to have sufficient cash available to finance the work to be done on the property. Make sure you don’t underestimate the funds needed!
How can I apply for a mortgage loan?
Apply online via our website or call us at 1 (877) 220-7738, extension 1.