How To Make Money In Fix and Flip Loans With No Work

ByRobert Watson
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The economy is in decline. The real estate market is in a slump. However, some make a lot of money buying homes at the foot of the court or from the banks. They buy them cheap, repair them, and then sell them for a high price. If you’ve got the experience, the time, or an entire team to help you with the work, it is possible to earn money.
If you can pay and cash, you can achieve even more. This is how. Fix and Flip have secured the property he’s purchasing from a lender. The price of purchase is $100,000. But Fix and Flip only hold an amount of $80,000 in cash. He only needs $25,000 to close the transaction. $5000 is more than enough to cover closing costs. This won’t be enough because he’ll require reserves to repair and sell the house. It will cost about $10,000 to make the repairs. In addition, he will need funds in his reserve More the more.

Fix and Flip loans contact his mortgage broker. He completes a loan request for a loan of $60,000 with a $40,000 down. The broker contacts you. The property’s value has been assessed. After the repair, the property can be sold for between $150,000 and $200,000.

The mortgage broker will present you with the offer. This is a 1-year note at 12%, plus 2 points—no prepayment penalty. Therefore, your minimum yield is 14%.

You reviewed the loan agreement and are pleased with the loan package. You drive over to the house, and it looks nice.

You can now offer him the money he’s seeking and consider putting down $50,000. If not, and if all else is fine, you can loan him $60,000. Even worse, you’ll purchase the property for just $40,000 less than the buyer recently bought. After that, you can make whatever you can to make it better and sell it for $150,000.

Then, you lend him the amount. He doesn’t want to lose the $40,000 down payment. He makes repairs to the property and sells it within seven months. You receive a payment of $100,000 at 12%, and you already have two points. You have earned over 14% return on your cash, and Fix and Flip loans did the rest.

Saratoga Bancorp has been making Trust Deed Investments since 1987. We can handle all the checking and documents for you and ensure that your investments and the paperwork are completed correctly. There will be the title to the property, and it will not be able to be sold until you have cleared the debt.