Craven Academy: Real Estate

Getting a conventional loan for a flipping project can be difficult. The lender will order an appraisal, which will list defects that are found in addition to placing a value on the house. Some are deal killers while others aren't. If the problems are not too bad, the lender may require that money be set aside in escrow to cover the costs of any repairs that may be necessary. If the repairs are mostly cosmetic in nature, you could be ok. Things like paint, carpet, cleaning up the landscaping and other minor items should not stop you from getting a loan. Other things such as major plumbing and electrical problems, foundation issues, a bad roof or other major items could be enough to make a lender decline a loan.

Just as there are closing costs when you purchase the house, there are also costs involved in obtaining a loan. Some of these costs are paid up front in the form of an application fee and appraisal fee. These fees are generally not refundable if you are not approved. Therefore it is better to have an idea as to whether or not the property itself qualifies before you even apply. A good