Some people in the public believe that fix and flip loans are taking advantage of people and that is just not the case whatsoever. A fix and flip loan is actually helping the community, helping the economy and helping our country as a whole. The reason for that is that a real estate investor that is going to get fix and flip loan from some good private money lenders is actually working on opportunities.
There are people out there that have houses that are in poor condition that may be grandma’s house that nobody is taking care of for years. The house is in disrepair. Things may not be working very well and may be they inherit that house and all of the siblings flew out of State, and it is main cause of the property in such bad shape. Their inheritors may not be able to sell that property on the market and they try approach private money lenders over it. They are not getting any offers and that is reason. There are so many disrepairs like the pipe or ceiling leakage. There is, you know, peeling paint everywhere. The siblings can consult Private Money lenders, in order to get out of this trouble. They just want to move on and so they work with the real estate investor and real estate investor pays the cash and there are not a lot of people in this world that give cash for a property.
They are really in a better condition to get a fix and flip loan from some good Private Money Lenders. But it is important to realize that this real estate investor is taking an unwanted product in making it something that is wanted. So they are not taking advantage of anybody. What they are doing is they are actually solving a problem because this family has all the siblings all over. They tried to sell the property. It has been in the market for over a year. Nobody can buy. They can’t get a loan on the property so they contact the real estate investor to come to the rescue and purchase the property. The real estate investor is obviously trying to make a profit on that but in the same regards they got to make sure that they make up their deal happen or the family is never going to accept it. They might as well do it by themselves.
The process shows how much the property is going to take to fix up because this is the best I can do for you. The family looks it over and says sure let’s do it. It is less what we thought may be but let’s do it and the real estate investor is going to make money in two ways. One he is going to get the work done cheaper than what retail prices would be. See most people pay retail prices to get work done on the property and the investor is going to pay wholesale price. Two they are going to make some money because they are going to buy the property for less than they can sell it for after they do all the work and that is how they make their money.