Financing for flipping houses

First 2 years are the hardest.
I would recommend that if you have friends or family that work in business if you can be employed on a on off type arrangement. where you work fulltime hours whilst at work and then when you are renovating you have time off or say you cannot work for 4 weeks. I say friends and family because not many normal employers would be able to cope with it.

Another way is to work odd hours at a job. Ie a 5pm – 2am type job.

Or you could get a partner/ another director who comes In for a percentage of profit after costs. They supply the serviceability and you provide the work and have say $1k a week for 40 hours of your time as a expense.

Nope wont help the situation at all unless they are also party to the Title.

We do a lot of short term finance deals for flippers and developers.

Sure the rate of interest is not cheap but you factor it in to your profit.

Cheers

Yours in Finance

Dont give up your day job until you have 2 years of good financials

Yip your right
The ones I have come across have lied through their back teeth, conned every one they come across I.e. Contractors
And then have gone broke
A typical person in this category is very excitable runs around a lot looking busy, but doing nothing, can be very friendly & engaging looking to earn lots of money with no real effort
Promise every thing deliver nothing but cayouse & frustration
Early warning signs are large grand plans quickly followed by being late and unreliable
They dont necessarily have to be a developer they can contractors as well, some of us are even lucky enough to employ them for short periods, I guess the they become contractors, then developers then broke
How ever their are some real clever ones who keep all Their money, but there is another name for them

I would strongly advise all to stay well away from people who fit into the above

But hay best of luck

• This reply was modified 10 years, 3 months ago by  Terry.

It’s possible but requires a few years of planning on the right loans and buy structure, lender and most importantly pre-planning…not something you can do off the bat.

Most of our flip clients who’s doing this now full time ( flipping 2-3 properties per year ) had to go through a 12-18+ month planning stage. As the only way to get this across the line without working was to consider the “flip project” as a BUSINESS ie your a professional flipper…

^ As you can imagine, getting the 1st years income is the hardest and hence why we can’t write the loan till a good >12-month after planning with our brokers and your accountant.

Else the easy way out is to keep your full time job and using that income to service the loan for the flips. But at the same time you may want to plan for the ^ above if your wanting to do this full time.

But you can imagine the amount of work required and planning, so really we also pre qualify our clients before we take them on board this flip journey to make sure their financial, mental and desire is strong enough to last the 12-18 month pre planning.

Hi Renov8r, I am looking at trying to accomplish the same thing! I am also a tradie and project coordinator and have been working on houses as a side project for years…breaching that gap and launching into it full time is bloody hard! I am not sure there really is any simple solution but I agree the juggle of working full time and renovating full time is certainly taxing on the body, mind, lifestyle, family etc.

Some of the problems that I am still trying to get around include:
– keeping a borrowing capacity within the first few years (as mentioned above)
– Maximizing the profit if possible and maintaining cash-flow
– factoring in tax, stamp duty, agent fees etc – it all seems to add up and eat into profit!

Just a thought if you were willing to look at options for the first few years to get yourself started. Perhaps you could consider JV’s? Its the path I am travelling down

Anyways goodluck and keep us posted on your journey

Rach