Having less than excellent credit doesn’t mean you have to squander your dreams of becoming a house flipper. It means you might need to get a bit more creative with how you land the financing for your projects. So take a moment to read about three ways to fix and flip a home with bad credit so that you can make your house-flipping dreams a reality.
Forge a Partnership
Investing in and flipping a property is an enormous undertaking, both financially and logistically. So especially if your credit isn’t in the best standing, it can be beneficial to forge a partnership with someone who can help you achieve your goals. Typically, you’ll want to find a partner that can complement your weak areas.
For instance, you might have a spotty history with your credit, but you’re an excellent carpenter with an eye for design. In this case, you’d want your partner to have a better financial history or credit score. This way, you can get approved for the funding you need and focus on the aspects of the project that are in your wheelhouse while your partner worries about funding.
Work With Private Investors
One of the most significant obstacles for those looking to flip homes with lackluster credit is finding adequate financing for their projects. The good news is, there are plenty of options out there that will work for you. For instance, you could try your hand at working with private investors to obtain a sizeable loan that can help you fix up a property and turn it into a profit quickly.
Private investors are a popular choice for those with bad credit, as these lenders are no affiliation with banks or businesses. For this reason, their approval criteria are more lenient than more traditional venues. Plus, once they decide to give you a loan, the funds are readily available for you to use. Finally, private investors work pretty fast, enabling you to get the financing you need, flip your property, and put it back on the market as efficiently as possible.
Take Out a Hard Money Loan
Next up on the list of three ways to fix and flip a home with a bad credit score are hard money loans. This particular type of loan is not dissimilar to working with private investors, as they will likely get your funding to you quickly. Just as well, hard money lenders usually will not look at a borrower’s assets, income, or credit score when deciding whether or not to back a housing project. Instead, they’ll use the property you intend to flip as collateral should you default on your loan.
Hard money lenders will also charge you interest on your loan over time. And although these loans might sound steep, they’re an excellent choice for house flippers trying to work quickly to turn a profit on a property. This type of financing is a perfect choice for flipping homes with fix and flip hard money lenders specializing in financing housing projects.
Hopefully, scanning this quick guide gives you some new insight into how to start flipping properties, even if you have a lackluster credit score.