Did you hear about flipping houses, and now you want to try it? It can be exciting to see the results of flipping. It can seem overwhelming if you’re looking to invest via fix and flip but have no prior experience. But not after you’re done reading this blog. We’ll tell you some handy ways to flip a house without expertise.

Tips to Flip a House with No Experience

You’ll need experience and money to generate income by flipping houses. Since you have no experience, you can go for the other option: tips from experienced professionals. It never hurts to learn more about what you’re interested in. You can even start flipping houses with no money; just reach out to an experienced professional for advice.

Here are a few tips you may want to consider when you start flipping houses with no experience:

  1. Look for the Right Property
    You can’t start flipping if you don’t have the property to flip. So start searching for the right house that could bring you sales. You can bid on houses listed on the MLS, but looking for off-market properties is better.
    You can start visiting different properties to see houses that require repairs. To do so, go into neighborhoods you can easily convince the buyer to buy a home. These also include places that are too fancy or have many tourists. Hence, your chosen house should be safe, have curb appeal, and be in a friendly neighborhood.
    Other than this, look for houses that need minor repairs. Since you are new, don’t go for places in severe disrepair. An unkempt lawn, a few damaged pieces, and similar disrepair should be where you start.
  2. Ask For Referrals
    Reach out to people and if they’re not interested in selling their property, ask them for referrals. You can get many new referrals by asking people for referrals. Make every call count.
  3. Build Your Team
    You can only become a pro at flipping a house if there’s a talented team by your side. Start networking with other investors in the area, particularly investors with experience in a fix and flips business. You should have a real estate agent, lawyer, lender, general contractor, and specialized contractor in your network. Although building a good network helps, it can take time to gain members. Try starting with a real estate agent and slowly adding more people.
  4. Invest in a Business
    You’ll need to become a business owner when you start flipping houses. Having a registered business set up can up your chances of appearing credible in front of potential lenders. In addition, having a business name gives you a layer of legal protection.
    You can open an LLC, as many investors do. Having a trusted attorney will make the process all the more easier. This will help put things in order. Furthermore, depending on your situation, you can opt for sole proprietorships, corporations, or other business structures. Whatever business structure works best for you, start setting it up.
  5. Find a Lender
    You’ll require financing for your fix and flip project, which may call for the need for a lender. A few factors can help you determine the type of lender to go for. If you’ve nothing to put down, a full mortgage might be your choice. In that case, you can look for a traditional lender like a bank.
    But if you have some money of your own and need the amount you’re falling short on, a hard money lender is what you should look for. Look for a lender offering flip and fix loans, as they understand your situation. Plus, they might get you the funding quicker, and they may not focus on credit much, depending on the lender,
  6. Set a Budget
    When flipping a house, you’ll need to set a budget to stick to. Don’t get distracted by overspending. Therefore, stick to the budget and make the house as appealing as you want to generate an income.

What to do?

So you don’t know how to start flipping houses? You can follow our tips if you have no experience in flipping houses. Our Red Door Funding team is always here to guide you. You can reach us at (832) 539-1099.

Pre-qualification and preapproval are two of the most innovative options to go for when you decide to buy your dream home. Pre-qualification is the first step toward your destination; you are told the amount that is at your disposal to buy a home. At the same time, preapproval is more like a stamp, an affirmation that you are just a step away from your goal. Want to know how long a pre approval document is good for?

Usually, mortgage pre approval is valid or good to go for 90 days. It makes your position stronger amongst the candidates who do not apply for it.

How Long Is A Mortgage Pre Approval Good For?

Your mortgage pre approval will last for a total of 90 days. However, you must know that interest rates are dynamic. Your credit scores change each month, which affects your financial situation and can change over time. These factors come into play and affect your purchase price limit. This can be your strength or weakness.

You must ensure that a house is already in prospect so you can get on with legalities in the coming days. However, if you have not found your dream home yet, and your 90 days are coming to an end, talk to your mortgage expert to refresh the preapproval.

They will need certain documentation submissions, up-to-date versions to refresh the credit score, and everything else. Be it any case, negative, positive, or neutral; they will inform you in writing and allow additional 90 days’ time to hunt down your house.

How Long Would A Pre Approval Take To Come In?

Preapproval has a specific role in your home-buying process. It helps fast-track the process of legalization and finalization. However, getting this document or approval may take time.

As far as mortgage pre-approved loan document is in question, it requires extensive information and aiding records. Therefore, expect the approval letter to come after taking its due course time.

Generally, a pre approval letter is issued within 10 business days after you provide the department with all the legal information they need to process the application.

Documents Required

The loan providers need the following records to grant preapproval:

  • Credit history
  • Proof of employment and income verification
  • Income tax history
  • Total assets
  • Desired mortgage amount along with down payment.
  • Bank account number
  • Most recent bank statements

Advantages of Applying for a Preapproval

It is solid proof of your financial stability, giving you an edge over other contestants. This document allows budgeting appropriately and the stance to submit your offer as soon as you find your desired property.

Final Words

You can look into more details about the loan qualifications and approvals with the help of professionals from Red door Funding. Dial (832) 539-1099 to connect with us.

Getting mortgage approval is a big deal, but when the papers come back, they have the word conditional written. What is the meaning of “conditionally approved loan?” Well, it does affirm that your loan is passed; however, the guarantee is not 100%. Still, it is much stronger than pre-qualification.

What is The Meaning behind a Conditionally Approved Loan?

A conditionally approved loan is a statement that one receives from the lender. It mentions that the lender has agreed to lend a specific amount of money to the potential applicant if his criteria are met.

However, the letter in no way guarantees that the applicant will definitely close the loan. Since the approval for the loan is conditional, it includes a list of factors that the borrower must meet before the loan is finalized.

Conditionally Approved Loan and a Pre-approval Letter – What Is The Difference?

What differentiates between the two is that conditional approval is a far strong indication of success than a pre-approval because the former is given only when an Underwriter is done checking through your income, credit report, and assets.

On the other hand, a pre-approval is sent before the submission to an Underwriter. So, the conditional loan approval letter is a more secure version to the seller since the buyer is close to a fully approved loan.

Mortgage Approval – Conditions

It is necessary to meet some criteria for a conditionally approved mortgage and submit documentation to the lender. Some examples include:

  • Financial statements, as well as proof of income for the past few years.
  • Information about the high-value assets you possess, such as art items or jewelry.
  • Income and asset verification via bank statements or any other means.
  • Mortgage verification homeowner’s insurance.
  • Income tax returns.

Is It Better To Obtain a Conditional Loan Approval before Putting Your offer?

A conditionally approved loan has the power to enhance your chances of getting an acceptance compared to those who are pre-approved buyer candidates.

With conditional approval, you have already surpassed most part of the extensive loan paperwork in advance. So, a conditionally approved loan might get you to close within 10-15 days. It would not require 20-30 days. What quick closing does is get leverage for you to negotiate better.

Buying a home is a major leap towards stability. It may be stressful since there are so many things a layman does not know about.

Getting a conditionally approved loan fast-tracks the loan sanction process and minimizes the things that may go wrong with financing.

Final Words

Few builders have made it mandatory to get conditional approval before starting the building process. So, this letter acts like a head start; the odds will be in your favor. If you want to know more about loans and the entire process, talk to one of the experts from Reddoor Funding.

With the increasing prices every day, buying your dream house has become, well, just a dream. Many people find it hard to make ends meet, and even paying rent can be difficult. Some luckily inherit family homes or properties from relatives, but that’s not the case with everyone. However, buying your first home might become more accessible with a gift of equity. Do you know what it is? Keep reading to learn all about the gift of equity.

What is Gift of Equity?

When a homeowner sells their house to a close loved one at a price lower than the property’s market value, it is called a “gift of equity”. Usually, gifts of equity are transactions between family members. For example, from parents to their child or the grandparent to grandchild.

By selling the property to a family member for a lower price, homeowners can keep the house in the family at a comparatively low cost for both parties. This way, the buyer gets to take out a mortgage on a reduced amount than the market value of the home. And for the lenders, the difference in value is perceived as a kind of down payment. By the end, the seller can pay off the final portion of the mortgage. As for the buyer, they’re left with monthly mortgages that are more affordable than if they had bought the house at a full market value.

Pros of Gift of Equity

Apart from keeping the property in the family and making it easier to buy your first house, the gift of equity also has other benefits. These include:

  • Home Equity for the Buyer: Making the purchase will come with immediate equity for the property you buy. This means you can take out home equity loans to upgrade your home a bit, pay off the remaining debt, or make other purchases.
  • Saving on Upfront Costs & PMI: This allows the buyer to top up their down payment or pay it off entirely. Plus, they can avoid paying PMI and probably apply this gift to other closing costs.
  • Accessible Homeownership: You won’t have to save up for a down payment with the gift of equity. Instead, you will have a more financially feasible alternative to becoming a homeowner.
  • Saving on Real Estate Commission: Since the transaction usually takes place without an agent, the seller gets to save on the real estate commissions.

Cons of Gift of Equity

Gift of equity is not all sunshine and rainbows; it has its drawbacks too. Some of these include:

  • Possible Gift Tax: The seller might have to pay a gift tax if the gift of equity exceeds the annual exclusion.
  • Potential Capital Gains Tax: If the buyer sells the house eventually, they might have to pay a higher capital gains tax. Since the gift of equity lowers the cost basis, you might have to pay increased taxes if you have a sufficient profit when selling the house.
  • Eligibility: The buyers and sellers need to have a specific relationship for the gift of equity, as the lender requires. Moreover, there are restrictions on the property as well.
  • Legal Fees: You’ll be free from paying the real estate commissions. Still, you’ll need to pay a lower to help you manage this transaction.
  • Limitations: Gift of equity is less flexible than a cash down-payment gift, as it is tied to a specific property.

What’s the Takeaway?

In conclusion, a gift of equity can help you buy your first house at a lower price than the property’s market value. It has many benefits, but some disadvantages as well.
We offer loan programs at Red Door Funding; contact us today at (832) 539-1099 for more information.

So you bought your home with the help of a mortgage, moving in to spend quality time with your family. Looking back, you would not trade in those precious years for anything. But what if you have been dealing with financial constraints lately? Or maybe you want to renovate your kitchen, which has been looking a bit worn out these days. That is when you wonder whether you should refinance your home, as it seems like a good option. Before you decide, contemplate the pros and cons of refinancing your home.

What Does it Mean to Refinance Your House?

For those who don’t know, refinancing your home means trading in your present mortgage for a newer one. Usually, the newer mortgage comes with more favorable terms.

The Benefits of Refinancing Your Home

Refinance is particularly advantageous for those who are early in their mortgage. Since you’re paying most of the interest now, having a better rate will significantly impact your longer term costs. That doesn’t mean a refinance will not save you money if you’re even further along in your loan. The benefits of refinancing are for everyone, like:

  • Provides you with a better deal on your mortgage payment. This might include a better interest rate, no mortgage insurance or a lower one, and paying off the looming balloon payment. Moreover, it allows easy future planning by turning an adjustable loan rate into a fixed-rate loan.
  • Helps improve your home, increasing its value. You can use the new mortgage to cash out your equity and utilize it for something else if you want some other options than exploring options for home equity loans.
  • Allows you to raise funds for some other investments. But before you go ahead and gamble recklessly, be mindful that failure to make the payment equals losing your home.

The Drawbacks of Refinancing Your Home

Nothing comes easy, showering you with benefits. There is always a catch, right? So does refinancing your house. Apart from the additional expense and process of actually receiving the loan, you should think over the drawbacks. These include:

  • The extension on the loan term is the reason why your payment is lower. Thus, make sure you are okay with creating a longer loan term.
  • Your mortgage debt will remain the same. But you know what won’t? The market. So the house that cost you a good amount today might just be worth half what it was yesterday. Hence, it might be a bumpy road to tread on. Thus, selling or refinancing again might not be as easy peasy lemon squeezy as you expect.
  • Refinance might not protect you from the deficiency judgments following foreclosure in some states.

What is the Takeaway?

Refinancing your house might be necessary on some occasions, like when you’re facing financial problems or need to renovate some parts of your property. It can help improve your house’s property value and offers other benefits. But it can also come with some disadvantages, like everything.

But you would need a house to refinance it. So why not get the investment money for one? Red Door Funding opens many doors to incredible opportunities. Dial 832-539-1099 to contact us for more information.