Where To Find Loans for Flipping Houses

Last Updated 6/11/2015

Where can real estate investors find purchase mortgage loans for flipping houses today?

Flipping houses has become incredibly popular thanks to an array of reality TV shows ranging from Flip This House with Than Merrill to Flip or Flop featuring Tarek and Christina. The trendiness of real estate investing, along with the promise of big pay days and a ripe and improving market has enticed thousands of individuals to try it out. Yet, while the US housing market may be flush with opportunities the big question many are asking is where to find investment property loans to fuel their purchases?

Fortunately, there are a number of purchase mortgage options for real estate investors to take advantage of when shopping for investment property loans.

FHA, VA, and USDA Home Loans

While many real estate investment gurus may not highlight the potential for using these loans for flipping houses, they can be incredibly powerful financing tools. While FHA, USDA, and VA home loans are not specifically designed for investment property, there are a couple of ways to use them to this end. Firstly; many HUD homes while are being auctioned off at bargain prices may already approved for these types of government backed loans. These purchase mortgage loans can also be used to acquire small multi-unit properties such as duplexes. If the borrower intends to live in one of the units while renovating the property, or renting the other units for income these loans can still be used, and offer low downpayment options, with great mortgage rates. These mortgages can also be assumable, meaning that buyers might be able to assume an existing loan to minimize acquisition costs, or let future end borrowers take them over.

Rehab Loans

There are mortgage lenders which offer special rehab loans for the purpose of buying and improving property. One of these home improvement loan programs is the 203k mortgage loan.

Transactional Funding

Transactional funding is a relatively new conept which really only came to the mainstream in the wake of the financial crisis of the early 2000s. Transactional funding is specicifally designed for those wholesaling houses. These are very short term loans, normally only used for 1 to 30 days. However, they can provide 100% financing, with easy qualifying.

Equity Based Loans

While not heavily advertised many mortgage brokers and lenders also facilitate hard money, or private money, asset or ‘equity based loans’. While these financing options often come with higher interest rates and lower loan to values (LTVs), they are not as focused on credit scores, making it easier and faster to fund loans for the credit challenged.

Your 401k or IRA

Many individuals continue to see their retirement plans suffer with low returns, while paying high taxes. Many new real estate investors could borrow against 401ks, or roll them over to self-directed IRAs. Funds in a self-directed IRA can be used to buy investment properties, or to put down larger down payments, and fund renovations, all while enjoying tax free or tax deferred returns.

In summary; there are a variety of purchase mortgage financing options for investment properties and flipping houses today. Explore them, and pick the right one for your scenario…