Let’s face it – the economy today is going down the drain.
It has become a massive challenge for someone to keep up with the necessities of life and sustain themselves working an average job in the United States – let alone raise a family on it.
People who work in offices are staying overtime in hopes of getting paid more or reaping the rewards and bonuses. Those who work minimum wage jobs are forced to pick up more shifts to afford a near decent lifestyle. All in all, it has become increasingly challenging to keep yourself afloat with the recent inflation we have seen.
There is a considerable need for more investment opportunities with the declining economic conditions
Naturally, people have begun looking for ways they can make some extra money. The fear of financial constraints has become more real than ever, and people are taking steps to make the likelihood of that happening as small as possible.
Fortunately, in times as financially scary and unpredictable as these, we have some investment opportunities that can act as our saviors. These side businesses can not only be strong monetary support in case of any emergencies but can also elevate our lifestyle to one that is slightly more acceptable than the one we would have without this stream of extra income.
House flipping has become an accessible side business with many wealthy investors today
One such side hustle that is gaining in popularity today is ‘flipping houses.’
The term refers to buying real estate that has the potential to increase in value, wait for the increase in value, and then resale it at a profit. During the time that an investor is waiting for the benefit of the property to increase, he may or may not choose to add the value himself – such as restoring a rundown house or renovating an old fashioned home to make it more modern and appealing. In the year 2017, there have been records of more than 207,000 houses being ‘flipped’ and sold for a profit!
Who are hard money lenders, and what is their importance today?
But, as you would imagine, buying houses do not come cheap. According to multiple reliable surveys and studies, the median home listing prices in the US today is $226,800. More often than not, this is beyond what a beginner investor can afford – even if he has been saving up all his professional life. In addition to this, it is the pricier real estate properties that have the potential of a higher return on investment than real estate that comes cheap. How can an average Houston citizen be expected to make use of these opportunities?
This is where our hard money lenders come in. These money lenders exist primarily for the house-flipping industry. They loan the investors the money that they lack to buy a house and flip it for a profit. With the money the investors make, these hard money lenders can be paid off quickly.
Today, there are many lenders of hard money Houston has to offer.
One quick Google search can provide you with tens and hundreds of links where you could go to Houston to get some house flipping money. However, more often than not, these hard money lenders will ask you to pay an initial amount as down payment, and this is where the problem arises.
The problems with a down payment when taking a hard money loan
On average, hard money lenders will ask you for an upfront payment of 30% on loan as a down payment. Someone who has been struggling to get their kids enrolled in the decent schools in the area will most probably not have a handsome amount of money to pay as down payment for a hard money loan.
Even this 30% can often be something that many people cannot accumulate even after years of savings. Try as he might, it is implausible for a person with a low income to afford this expense. How are these individuals supposed to break the poverty cycle, then? Simple – a hard money loan with no money down!
When is it possible to get a hard money loan with no money down?
But does such a thing even exist? If so, how would it also work with the lenders having no monetary security of fraud or embezzlement not happening from the borrower’s end? To find out, keep reading.
No down payment, hard money loans do exist – in Houston, as well as the rest of United States. However, this does not mean that lenders are giving away money with blind faith in the borrowers. The system works by using cross collateral.
Cross collateral is when a borrower uses an equity (this could be a house, any property, an expensive car – basically anything) as a form of security to the hard money lender. This allows the borrower to avoid paying an upfront cost to the lender – allowing him to obtain a hard money loan even when he is short on cash, or using the said cash to renovate the house and add further value to it.
Is there any additional fee for using other methods of acquiring a hard money loan other than paying a down payment?
Most hard money lenders will charge you an extra, fixed amount for letting you borrow a hard loan against collateral rather than a down payment. However, this amount is much less than what you would have had to pay upfront as down payment and is most probably a sum that you can afford.
The final word
Have you been thinking of flipping houses, but do not have enough money to get started? If yes, you might want to talk to the hard money loan providers in your area about no money down hard money loans. With these options available, you are that much closer to start generating humongous profits flipping houses!
Ashley Rosa is a freelance writer and blogger. As writing is her passion that why she loves to write articles related to the latest trends in technology and sometimes on health-tech as well. She is crazy about chocolates. You can find her at twitter: @ashrosa2.