Whether you’re a novice or an expert in the house flipping business, you have to deal with funding, budgeting, cutting costs, and the adventurous venture into the world of financing, private lending and hard money loans.
Now, For Fix & Flip Newbies Out There:
If you want to scale, the true question is… How can you get from “I have this fantastic project in mind but I don’t have the money to do it” to “I’m confident enough to get in touch with investors and lenders”. It’s not difficult, it just takes the right attitude and mindset.
We’ve all been there: the first house we buy and flip, we try to do everything ourselves, we spend days and nights, maybe even “hire” some family members and friends, and try to cut the costs of every little thing to save up as much as we can and squeeze as much of that profit as possible.
After 2-3 of these projects, the burnout starts to sink in, and you might be getting this inner feeling that you could probably have more success if you weren’t doing all the constructing, planning, and doing-it-all-yourself.
Thus, you found yourself in the “Scale-up” dilemma. Should I keep doing what I know I’m good at, or take a leap of faith, a little risk, and start educating myself, contact more people in the industry and get in touch with lenders to see what their requirements are?
Our Advice Is: GO FOR IT!
When you’re ready to scale up your Fix & Flip business you’re also ready to stop depending solely on your own capital and you’re ready to reach out to a lender. That’s not easy, but you’ve come a long way, and you know you’ve got what it takes!
The initial mental switch you’ll have to do is quite interesting. All of a sudden you’ll go from “I don’t have to pay any percent on anything, I can make my own rules with how I spend it” to “I have to pay someone else to borrow that money and I have to make sure that my investment property fits into whatever it is they require.” That’s some attitude gymnastics, but it is worth it!
The truth is, that when you’re using your own capital you’re tightening all up. You have a certain limit. But what happens when you decide that you want to go beyond that limit? That you want to dream bigger and to start tackling some extensive house repairs? That would be the perfect moment to start planning in detail the costs or each segment and make a plan, do your homework and find out what kind of loan or investment will truly suit your Fix & Flip.
Time To Network!
Now, you’ve done it. You have your plan all figured out. All you have to do now is finding the courage to go looking for the right lender. The great news is that real estate and house flipping are amazing and friendly industries, so one easy way of finding other people to exchange ideas with, or that have already gone through your journey and might have an advice or two, or even lenders, it’s on social media.
Find out if there are any Facebook groups, local Instagram/Twitter hashtags, or find similar people on LinkedIn locally, research any events, or discussion groups and get out there!
When you’re confident about your plan and have a good sense of what and who you’re looking for, you’ll find it right away. Just keep your goal in mind and keep searching, ask the right questions, and never settle for less than what you think you deserve.
Lastly, don’t worry too much about money!
Keep in mind that when you’re borrowing it with a good lender, it means they’re also checking into your investment and making sure that on paper it looks worthwhile. Really, a good lender is kind of like your partner in the deal, so don’t get caught up on whatever box you think you have to fit into, or the money that you’re spending in order to borrow your goal loan. Just remember, in the end, the margins that you’re making are what makes it worth it.
That’s it for now. Remember, change your mindset, do your homework, and get out there!
And, when you’re ready to take your fix and flip game to a whole new level, call or message us for more information, and advice on how to reach your goal! We can help you get started.