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Flipping Houses? Apply For Guaranteed Payday Loans No Matter What Canada

Since 2007, house flipping is gaining a lot of traction in Canada, mostly because of the increasing prices of real estate. And of course, the increased availability of finance options has a major role to play in its popularity, as well.

Although it generally costs more to flip a house as compared to buying one, flippers have been earning higher profits.

Regardless of what lenders believe, house flippers check for guaranteed payday loans in Canada at FriendlyLender.ca for relevant information.

So, what exactly are these payday loans and how do they help house flippers?

Online money lenders usually have a lower loan term with higher interest rates, ranging so. And most of the borrowers (house flippers) usually seek easy money options.

Even if they have a low credit score, they can easily apply for online payday loans. The fact that repayment options are flexible and short-term, also adds to it further.

A payday loan is a short term loan offered by private lenders to meet immediate financial needs. The amount of loan can vary between a few hundred dollars to 2-3 thousand dollars, depending on the eligibility of the borrower.

Understanding how these payday loans can help house flippers- it is important to know how much house flipping can cost.

How much does house flipping cost?

When a house flipper buys a property, they usually have to bear the costs of repairing and also reselling it. Following it comes to the property taxes that are also to be born by the flipper. Then there are utility costs, homeowner’s insurance, and many more expenses.

All in all, the cost of buying a property for flipping is way too high than what it would be otherwise. Of course, the expected returns on investment also has a significant role in it.

Moneylenders usually consider house flipping to be a risky investment. And therefore, they are quite reluctant to offer a loan. And even if they do offer a loan, the interests could be fairly high. As already mentioned it could range anywhere between 12% to 18% and that too in a very short-term period.

Of course, for someone who has no money or low capital, choosing house flipping is not a very lucrative proposition. Even if, somehow, the flipper qualifies for a mortgage with a downpayment, they’ll still be paying a lot in terms of interests.

Moreover, financers, even if they do lend, are unlikely to work with inexperienced house-flippers.

All in all, house flipping is not a walk in the park.

How does traditional mortgage work for house flippers?

Apart from levying a higher interest rate, traditional financing institutes have two to five points.

A point is 1% of the loan amount that the lender charges and is payable when the home sells, at the closure of the loan. For example, a loan of $100,000 with 2 points would require the borrower to pay about $2000 to the lender, when the house is sold.

In addition to this, usual mortgage lenders decide the amount of money that can be borrowed based on the home’s after-repaired value. For example, if the cost of the house after repairs are done is $160,000 then the borrower can apply for a loan up to 70% of this value. Or in other words, $112,000 is the sum that is offered by the lender.

And when clubbed with the points that a lender may charge, the workable budget available with the house flippers is very narrow.

Payday loans come to the rescue

Noteworthy is the fact that house flippers can mitigate the points with the help of payday loans. As already mentioned, payday loans vary somewhere between a few hundred to some thousand dollars, it makes perfect sense to use these for paying off the usual mortgage.

Although the payday loans won’t offer a complete solution to the financial needs of a house flipper, it can still help mitigate the risks. And make it easier for them to avail of a mortgage from traditional money lenders.

The bottom Line

Whether you’re new to house flipping or an experienced house flipper, you would need to limit your risks. And for this purpose, it is always better to seek financial help from money lenders.

While most of the conventional finance institutes would be hesitant to invest, it does not mean there are no options. To start off as a successful house flipper, you should arrange for enough cash.

Apart from it, there are several options to arrange for funding, such as crowdfunding, REITs, and also going to a bank.

It needs no mention that all of these options are pretty expensive when you need money to finance your business. But, if you could consider the likelihood of gaining handsome returns on your investment, the risk is well worth it.

It needs careful planning and knowledge of the local real estate market. A rather easier way, to begin with, would be practicing your skills as a house flipper in collaboration with some experienced flippers.

Whether you visit a conventional mortgage agency or you visit a bank if you have a good experience and can convince the lenders about promising returns, your likelihood to receive a loan is increased, manifolds. And that’s all you need to start your career as a house flipper in Canada.

If you know the right options and where to find them, a lot of your efforts are already brought justice. Grow your network, meet real estate mavens, discuss your theories with them. There’s no harm in discussing your aspirations.

As the experts say, most of the billionaires in the world have grown through real estate investments. No matter what, the value of land is bound to appreciate, unlike other assets.

So, better you start investing in your house flipping dreams now, then never. It’s always good to start as early as possible, particularly when the stakes are in real estate.

We hope that you found the information that you were looking for. Please let us know below in the comments section.

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