With any real estate transaction there can be risks and rewards, including when you work with a lender to secure the financing on your deal. With bridge loans, there can be slightly more risk involved, since the main objective is to essentially have two loans out on two properties at once. However, for developers who know their market and are confident in their development plans, the rewards can outweigh the risks and provide a means for paving a smooth path to getting their next deal lined up and ready to go.
In a perfect world, financing your investment property would be as simple as taking out your personal (or business) checkbook, writing a check, and handing it over - no heavy lifting or strings attached. Unfortunately, for most developers that isn’t usually the case - especially when they’re first getting started in the world of real estate investing and development. After all, the funds to make the purchase need to come from somewhere, and until you’ve got a few flips and sales under your belt that money simply might not be there yet. So, if you’re weighing your options about financing your investment property, let us walk you through some of the best ones.
When purchasing a historic home in any market, it can sometimes be a bit more overwhelming and involved than purchasing a recent build. It goes without saying that historic homes have additional considerations - they may require updates to their utilities and infrastructure to make the house fully habitable, or to simply make them more comfortable to live in.
As with most things to do with real estate, there’s a variety of terms and intricacies you need to know and understand. When you’re purchasing property with a loan it can all get a bit more complicated. This is especially true when you’re entering into the investing world as a prospective fix and flipper. For many first-timers, they assume that what they’ll need for their project is a construction loan - which on the face of it makes total sense. After all, they’ll be purchasing a property and then doing construction - why wouldn’t a construction loan be the appropriate method of funding and what is its purpose if not to fund construction?