If you are looking to make your money work for you, you already know that you need to be investing it in a variety of markets, and you probably figured out quickly that the real estate market is an ideal area to expand into. Not only can real estate investments produce a high yield, they are investments in actual property that carries tangible value. Of course, flipping houses for profit is a business. To make money and manage risks, you need to understand how to operate, and that means understanding what forms of debt are designed to work with you and what forms are not.
Top Loan Types for Real Estate Investments
If you are looking for flip house loans that will let you easily acquire and improve properties, so you can get your money back out of them, you need loans that are designed for short-term investments. That means considering the following loan styles:
- Bridge loans
- Hard money loans
- Fix and flip loans
These three types of loans are all designed for people who are looking to turn a property over and then sell it. They require you to think short-term, and if you do decide to hold onto a property, they will all need to be refinanced into longer-term debt. They also come with low closing costs and other features that make them cost-effective in the short term.
Loan Types to Avoid
Loans that are designed as long-term investments will take too long to process and cost too much in closing costs. They’re widely available from private money lenders, but that doesn’t mean they fit your business. This includes:
- Stated income commercial loans
- Purchase loans
These are all great loans for long-term buyers, and if you decide to invest in income properties and manage them for tenants, they have their place. They simply don’t work as well when you’re in the business of flipping properties, though.
For more information about which North Coast Financial Loans fit your business best, contact North Coast Financial today.