Do you know how to get into flipping houses with no money and no credit?
A lot of persons have asked the question if it is possible flipping houses with no money. By reading this article, it is possible that you also seek answers to this question.
Well, the answer to this question is; yes! You can start flipping houses without using your own money and we will show you how. Carefully read through the entire article as we show you practical ways to achieve this.
- What does Flipping Mean?
For the benefit of the reader with little knowledge on what this term means, it is simply the practice of purchasing an asset, in this case a home and selling it for profit. But why use the term “purchasing” when we are talking about starting the business with no money? Well, do not be confused or worried as we will tackle this shortly. It is also important to note that this has been in practice for as long as capitalism has existed.
How to Flip Houses with No Money
- How Skill Cuts Down on your Overhead
There are several things that contribute to successfully flipping a house. A critical aspect of this is skill. If you are skilled in any aspect of home repairs, then you will have successfully cut down on cost. This doesn’t matter whether you are a mason, a plumber, a painter or any other. Such sweat equity will reduce your overhead.
- Your Credit Rating or Score
In order to enter into this line of real estate business, you need to evaluate your credit score. Why is this necessary you may ask? Well, it is simply because lenders are always interested in knowing this detail of your financial history. They need to know that you are able to pay back money loaned. To successfully flip houses with no money of your own, you will need a high credit rating or score.
There are different types of credit scores (numerical representation of risk you pose to a lender). However one feature common to all is that the higher your score, the better qualified you are for a loan. Some common credit scores include the FICO, Equifax, Vantage Score, Experian and TransUnion. All of these have ranges from 300 to 850 except Experian and Vantage Score which have ranges of 330 to 830 and 501 to 990 respectively.
- Speak to a Financial Expert
In your bid to flip houses with no money of your own, you will need to seek the services of licensed financial expert. But why is this necessary? It is because you do not want to work blind. A financial expert or advisor will point out your risk exposure as well as recommend the best risk you can work with in meeting your loan obligations. It is important that you do not take for granted this point or any other for that matter.
- Seek for a Private Money Partner
This is a beneficial relationship between you and your chosen partner that works on the principles of obtaining cash for flipping houses with no money of your own while both having an agreed amount to pay back. Not everyone is qualified to become a private money partner. This is because there are certain attributes you need to be on the lookout for.
Some of the attributes you have to consider in choosing a private money partner include someone with the funds required for takeoff. You shouldn’t involve some who himself needs to apply for a loan to achieve this. Such a partner(s) should be able to function strictly within their specified roles or boundaries. This involves transparency as well as clear and unambiguous communication.
The success of your house flipping business depends to a large extent on the quality of your partnerships. Hence it is crucial that a careful selection of the right partners is done.
- Agreements Should Have Legal Backing
No matter how close you are with a private money lender, all agreements should be legally binding. It is advisable to consult a real estate attorney to ensure your actions or agreements are properly guided. Your agreements should specify the roles to be played by each partner to avoid disagreements. There should also be trust.
- Trust as a Currency in Business
Flipping a house like other businesses depends on trust. Because you won’t be using your own money, lenders especially private will need to trust that you will keep your end of the bargain. It is important that you do not break such trust as a broken trust marks the end of such relationship and business.
- Only Go for Low Interest Rate Loans
We have said that one of the ways of starting a house flipping business without money of your own is by applying for loans. However you need to understand that different lenders have their different interest rates. Under such circumstances, you should go for those with the lowest interest rates. Loans with single digit interest rates are the best, although they aren’t found often.
Flipping houses with no money is a challenging process that involves taking into consideration important details regarding loan application. However in spite of this, there are successful house flipping businesses today that started in similar circumstances. You too can replicate this process by following the procedures outlined above.
One other way you can start without money is by reaching for your Independent Retirement Account IRA. There is an exception to this as not everyone is qualified as you are expected to have reached a certain age (usually fifty nine and half years) to do so. To flip houses with no money, you need to take all these into consideration.