So what do you need to get started?
- First, you need an excellent credit score. Lenders have tightened their requirements for home loans, especially if you want a loan for a high-risk house flip.
- You need cash. Use the cash for a down payment, so you don’t have to pay private mortgage insurance (PMI) on your second mortgage. You could also take out a home equity line of credit (HELOC), if you qualify, and if you are buying a cheap house through a real estate auction. If you have enough in savings, and you manage to find a bargain-priced home, you can buy the home, and take out a small loan or line of credit to pay for the renovations, Realtor fees, and closing costs.
- You need to know the real estate market. You want to buy a home in a great location, fix it up, and sell it at a profit as quickly as you can. In order to sell the home quickly, it must be located in a great area. The longer it takes to sell the house, the more money you’re going to lose to monthly mortgage payments, and payments for insurance, utilities, and property taxes