Race Cars, Cheetahs, and Fix and Flip Loans: The Need for Speed

Speed is crucial. It could mean the factor that determines whether you win in the Indy 500, catch tonight's dinner, or generate profits from the real estate fix and flip loans. Many real estate investors resort to hard-money loans to fund the acquisition and renovation of properties that need rehabilitation, and the demand to speed up the process is among the primary reasons.

What can you do to "win in the contest" in the world of renovations in real estate?

Renovation projects depend on time and therefore require financing sources that can respond promptly. Here's why:

* The most money is the best Offer: When you live in a highly-density region such as Washington, DC, the competition for the right fix and flip properties is very intense. If foreclosed, abandoned, or deteriorating housing stock comes to the marketplace, it's typically the developer with the fastest access to funds that pick the property. If you cannot secure financing within a few days, you may miss out on a lot.

* TIP For more information: The U.S Department of Housing and urban development's website includes an online portal that lists all foreclosure properties across the United States. Go to the site to find out what's available in your area.

* Time your Sale: in most regions, the best time to sell a fixer-upper is a lengthy buying season, which typically starts in the early spring. It is recommended to plan your purchase and rehabilitation process so that it coincides with your selling period. A quick private loan, available whenever you need it, is crucial to a proper timetable for your rehab plan. A recent Zillow study suggests the best time for selling is between mid-March and mid-April, based on factors such as the area and the weather. The homes sold during this period are sold 15 percent quicker and at a 2% higher price. That's money that you can put into your wallet.

* Flexibility: Fix and Flip, as well as construction loans, are typically designed with a draw schedule, and funds are released every time you meet the specified threshold (permitting framing, allowing, etc.). This will ensure a consistent flow of money throughout the project. However, overruns in costs and delays in construction can happen as developers tend to extend the project's scope or duration after the initial funding; whatever the reason you have for needing extra funds for your project, waiting for a loan may slow your project's progress. The loans made with hard money can be designed to cover multiple phases, drawing upon phases 2 or 3 in the event of need, and funds can be paid out as fast as on the same day to ensure that there won't be a delay in your project.

Walnut Street Finance has helped developers and builders obtain real property loans with hard cash in Washington, D.C., Maryland, and Northern Virginia.