Like any real estate transaction, flipping a home involves a lot of separate costs. While flipping a house can have an excellent return on investment, it can also cost quite a bit to get the process started. However, there are ways to flip houses with very little upfront cash. Here are the best ways to flip on a tight budget:
Private Lenders
Private loans come with a variety of advantages because they don’t work with banks or government institutions. This means that a private lender can give you your money much quicker and without the same regulatory obstacles as traditional lenders. However, they also make their own rules, which can benefit you or hinder you. As long as you’re clear about any contract details and expectations, they can be a good option for funding a flip.
Hard Money Lenders
Hard money lenders work with entities that specialize in lending money but offer shorter term loans than traditional sources. Hard money loans are excellent options for flipping houses because they allow for flexibility in timelines. However, like private lenders, hard money lenders have their own unique rules and guidelines, so shopping around for the best fit is ideal.
Crowdfunding
Crowdfunding is a more free-form type of investment strategy involving multiple sources. Each source would contribute a part of the total loan amount. There are many sites and companies dedicated to helping you set up your own crowdfunding initiative and when paired with promotion and marketing strategies, it can be an extremely convenient way to raise the funds for a flip.
These are just a few ways to get the funding you need while sticking to a small budget. All offer a great opportunity for financing your flipping project with a low initial investment up front. Research and budget carefully to find the best fit for your situation.
About the Author
Kyung Kim
Hi, I'm Kyung Kim. I immigrated from South Korea to the United States in 1968 when I was 7 years old. I have seen my mom struggle with the English language and work hard to raise her four kids by herself. Still to this day, I don't know how she pulled it off, but she bought her first home in 1979 for $70,000 and because of that decision, she was able to live without worrying about her financial future. I want that for everyone, to feel the pride of home ownership and to build their financial wealth using real estate as part of their financial portfolio. I feel so blessed to play a small role in helping others reach this goal.
I live in Beaverton with my husband, Richard. My mom, who lived with us for several years, passed away in our home in February 2022. Her first home purchase in 1979 made it possible for her to live to the very end, without worrying about her finances. As of August 2022 with a little downpayment assistance, our four children own their own homes. Being in real estate, I quickly realized that if they didn't buy now, they may be priced out of the market in the future. Whether that would have been the case, we will never know, but what we do know is that they are all realizing some good, healthy appreciation in their home values.
As passionate as I am about people owning their homes, I'm also passionate about giving back to our community. I support Compassion First, a non-profit organization that provides aftercare for sex trafficked girls in Indonesia. My husband and I also feel called to financially support social injustice organizations.
I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.
