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Are you an investor facing challenges securing financing for a property flip in rural Northern California? You're not alone. In a recent video, Beau addresses a question from Alex, who's struggling to get a lender on board for a flip under contract. Beau shares insights and tips on finding the right Fix and Flip lender, especially in the context of rural markets.
The Common Challenge: Institutional Hard Money Lenders and Rural Properties
Beau starts by acknowledging a pervasive issue faced by investors dealing with rural properties. Most institutional hard money lenders utilize a system regulated by the Consumer Financial Protection Bureau (CFPB). This system can be a stumbling block, as it flags properties in rural areas. If a property is designated as rural, the lenders might hesitate to provide the loan or require a complex secondary approval process.
Alternative Lenders and Accessibility of Rural Property Loans
The good news is that Beau highlights the existence of alternative lenders willing to finance rural property flips. He acknowledges that while the pricing might not be as favorable compared to traditional loans, these options are crucial for investors looking to capitalize on opportunities in rural markets. Beau emphasizes that, with a good deal and healthy profit margins, investors can navigate the slightly higher fees and points associated with these loans.
Navigating Complexity and Higher Costs
Beau doesn't shy away from the complexities of dealing with rural property loans. He conveys that the process is more intricate, and the pricing tends to be higher. However, his reassurance lies in the viability of the deal. As long as the fundamentals of the investment are strong, the slightly elevated costs shouldn't deter investors from pursuing rural property flips.
Details of Rural Property Loans
For those considering rural property flips, Beau provides specific details about the available loans. Investors can secure 85 to 90 percent of the purchase price and cover 100 percent of repair costs. However, there's a cap at 70 percent of the After Repair Value (ARV). Understanding these specifics is crucial for investors to make informed decisions and plan their financing strategies accordingly.
Seeking Assistance and Moving Forward
Beau extends a helping hand to those facing challenges in securing rural property financing. He mentions a processor he works with and an intake form to streamline the loan application process. Beau encourages viewers to reach out for assistance, emphasizing that while the process may be a bit more challenging, the availability of loans for rural properties is a valuable opportunity.
Exploring Financing Solutions Beyond Rural Properties
In the latter part of the video, Beau broadens the discussion beyond rural property flips. He invites viewers to book a call to discuss Small Business Administration (SBA) financing, covering options like 7A and 504 loans. Whether it's starting a business, buying an existing one, investing in a franchise, or expanding an office building, Beau offers expertise in navigating diverse financing needs.
Conclusion: Connect, Learn, and Secure Your Financing
In conclusion, Beau‘s insights provide a roadmap for investors navigating the terrain of rural property flips. The key is to be proactive, understand the nuances of rural property loans, and explore alternative lenders. By connecting with Beau and his team, investors can not only overcome the challenges but also explore a spectrum of financing solutions for various business endeavors.
Ready to dive into the world of financing and property flips? Book a call with Beau and explore the myriad opportunities waiting for you.