It’s hard to imagine this is the final season of Fixer Upper, the wildly popular television series about Chip and Joanna’s adventures in fixing up old homes and reselling them for a profit. It’s easy to imagine how a TV show about fixing up old houses would be so wildly popular; it can be wildly profitable. Although they did run into problems renovating old houses, such as having to replace all the plumbing because there was no water pressure due to pre-60s corroded, galvanized steel, or replacing a fireplace that wouldn’t meet code but was part of the ceiling and roof support. Keep in mind, the show’s buyers got the expertise of a top-notch builder and interior decorator, and received goods and services from the show’s underwriters, for much less than those of us in real reality would have to pay through private real estate financing.
Which brings us to the essence of this article: Will private real estate financing work for you, and where do you find it? When private citizens, contractors, and real estate investors need money to replace all the plumbing in an old house they don’t have the advantage of reality TV underwriters’ goods and services at cost. They need real financial help from private financiers or banking institutions.
Private Real Estate Financing Versus Bank Mortgage Loans
So, say you have run into a plumbing snag in the renovation of a property you intend to “fix and flip” for-profit; the plumbing replacement project will cost a lot more than you have on hand. Another common problem with plumbing is the pipes between the house and the street also belong to and must be fixed by, the owner. Replacing all the plumbing can run into 10s of 1000s of dollars. Where do you get that kind of money, so you can move on with the project? Not much can be done until the plumbing is replaced. Since pipes and drains run through walls and floors, there isn’t much sense in replacing those until you’ve replaced the plumbing.
If you go through a banking institution, the delay during processing and waiting for approval could take weeks, which is likely to dig into your turnaround time and profit. Not to mention, banks insist on the house being “livable”; the plumbing could be a major drawback for them, as could your credit score and other conditions used to determine creditworthiness.
On the other hand, private real estate financing is not concerned with a credit score or a steady income source. Your credit history is not as important to them as the value of the renovated property. That’s correct, most private real estate financing is based on their appraisal, which could get you up to a 100 percent increase over their appraised value of the property.
Will a Private Loan Work for You?
Since it works for many contractors and real estate investors, it will likely work for you. These loans are short-term, and many of the expenses you incur are simply deducted from your profit, which will minimize your tax liability (check with a tax professional to make sure).
If Chip and Joanna ever need to use private real estate financing, Red Door Funding is right down the road from Waco, in the Houston area. When you need private money to complete a fixer-upper project or even to buy the property and pay for the renovation, look into private real estate financing.
Why Red Door Funding?
Red Door Funding is convenient, and their application process is simple. Call (832) 539-1099 to get an appraisal of the property and complete the application here. Send an email with your questions to firstname.lastname@example.org.