A recent news article about the home flipping buzz in the United States got me thinking about mitigating risk while facing a tightening profit margin. If you’ve just finished binge-watching your favorite HGTV flipping series, beware! Home flipping is not for the faint of heart! It can have many pitfalls, small margins for error, and anything (even the unexpected) can go wrong.
As a lender, Revolver Finance helps people reach their dreams of flipping!While we may not be the expert in any specific geographic location, we remain experts on what it takes to issue an appropriate level of leverage for a sound deal. If you’re speaking with your lender and find yourself having to “sell” the deal to them, you may want to take an objective look at your project. The project might not have the margins you expected. Use your lender as a resource and remember that you’re both on the same team!
Find a lender who will educate and guide you through the sizing of your deal. Lender guidelines are not created merely to make profit for the lender, but to ensure property returns to the borrower as well. ARV caps, specific DSCR requirements for rentals, serve a purpose, and while a lender may do a deal with a higher ARV or lower DSCR, it comes as a cost to the investor as it requires more skin in the game.
If your deal doesn’t fit the underwriting box of three lenders you’ve called, walk away. The goal in these transactions is for all parties to make money, so there is a heavy benefit to ensuring completion and disposition of your project. A good lender loves to talk through deals and size them – it’s what they are paid to do, so let them do it! It will help ensure you to go into the project well educated and comfortable with the margins of your transactions.
At Revolver Finance, we focus on making your flipping dreams come true. Our amazing staff is always ready to educate and guide you through any questions you may have. Email us today at email@example.com to get started on your newest fix and flip venture!
Flip your Future with Revolver Finanace
Email Us: firstname.lastname@example.org
Call Us: 316-749-8663
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