Fixing and flipping properties is a great way to turn your passion for home renovations into a lucrative job. However, before you can start making improvements and build your new business, you need to find a way to pay for those properties you’re going to fix up. You can use your savings, but most professionals prefer to look into fix and flip financing options to help cover those costs without draining their personal savings. Here’s what you need to do to get a great fix and flip loan to finance your project.

Put a Business Plan Together

Fixing and flipping homes isn’t just a passion project—it’s a business. You need to treat it as such when you’re looking for financing. The best thing you can do is to create a detailed business plan for your project. Outline the types of improvements you’ll make, your estimated costs, the cost of the property you’re interested in and the estimated return on investment. The more detailed your business plan is, the more confident lenders will be in working with you.

Look at Different Loan Types

Once you have your business plan in place, you’ll need to look at different loan types. Some fix and flip experts prefer to use conventional mortgages to finance their purchases. These loans give you access to low interest rates and low monthly payments, but they’re harder to qualify for. They’re best for investors that plan on living in the property for a few years after they fix it up.

Professional fix and flip investors that want to sell their properties quickly often use hard money loans issued by private investors. These loans are easy to qualify for and are backed by the property itself so you won’t have to worry about posting additional collateral. However, these loans tend to have short repayment terms and high interest rates. If you choose to use hard money loans, shop around and work with the lender that gives you the best deal possible.

Crowdsourcing Is an Option

If you don’t like the idea of taking out traditional or hard money loans, you may want to try crowdsourcing your project. This allows you to reach out to people across the globe that believe in your project and are willing to help you pay for the property. Most crowdfunding platforms allow you to borrow money from several different investors and provide you with a simple way to repay what you borrow through the platform.

There are many different fix and flip financing methods you can use. Think about your needs, budget and goals when considering your options. Choose the financing method that works best for your needs.