A lot of folks just can't decide whether they should pursue the deal first, or purse the money to fund the deal first.
Unfortunately there really is no absolutely correct answer to this question. The bottom line is that in order to learn how to flip houses with no money, you need to be working both sides of the house flipping equation all the time.
If you stumble upon a great deal but don't have the necessary funds then you need to be confident that you’ll find the money by using “the Secret” to house flipping success.
Of course, if you get the money first then of course you must search out a deal as soon as you can.
Although it may be hard to visualize…but the bottom line on all of this is: money is everywhere - you must just figure out ways of acquiring the money!
Many people who flip houses for a living use other people's cash - this is called "OPM" for short. There are numerous ways of getting people to invest with you, many of the avenues are obvious and basically sitting right in front of us.
1. Partner up with someone on a deal
When just starting to flip houses, parntering up with someone is one of the best ways to fund a deal. This partner could be anyone in your network that you trust and want to work with.
You can simply ask the partner for the money to finance the house flip. Fill them in on what you plan on doing with their dough and be sure to vocalize that you will split profits right down the middle. Your partner may fund the deal, you do the dirty work, and you both reap the rewards. This is a pretty typical partner arrangement in the house flipping industry.
2. Hard Money Lenders and House Flipping
Hard money lenders are people with money that lend to others at a very high interest rate and it is not
uncommon for them to also charge points on top of the interest rate.
Hard money lenders are good when you know you can flip a house quick.
3. Private Money Lenders and Flipping Houses with No Cash
A private money lender is a person with money to invest. In many cases, they may not be actively looking to invest, they just have it sitting around and may be open to investing with you if they are asked.
Private lenders are preferred over hard money lenders, simply because, the house flipper establishes control.
4. Flipping Houses with Traditional Banking
Granted you have a good relationship with your bank, traditional banking is another way to fund a deal. Of course working with a bank can be challenging at times, yet with a solid plan in place traditional banking can become a great source of house flipping funds. There is a fair chance that for your first house flip, traditional banking may not be an option, however as you improve your track record these doors will open up.
You can also locate funds if you simply:
Consult with your doctor, dentist or any other medical professional
Chat with your lawyer
Talk to anyone in your neighborhood who has a successful business
Definitely talk to anyone who you know is already investing actively
If you can learn how to flip houses by using OPM, you will not have to be concerned with investing your own cash because as soon as you turn your first successful house flip, you will discover that folks want invest with you.
