It goes without saying that the person with the ability to grant or deny access to massive amounts of cash is a critical player on your team. Here is where your relationships can pay off.
If you have never bought anything more substantial than a winter coat, it is time to hit the pavement. To be a star flipper, you need a friendly lender in your back pocket. Local banks are your best bet, as sellers frequently frown on offers from an out-of-town institution. That is not to say that you’ll never close a deal if you choose your sister-in-law in Hawaii as your financier. However, if yours is one of multiple offers, you want to do everything you can to make it as attractive as possible.
A quick word about money: A lender will take several factors into account (primarily your income, credit score, and the price and value of the property in question) to determine how much money you are eligible to borrow. Nowhere is it stated that you have to borrow it all. Since lenders are in the business of making money, the more you borrow, the more they make. Remember, borrowed money is not free money. You will be paying mortgage payments and costly interest on it (depending on the length of time you wind up borrowing it). Only you can determine your borrowing comfort zone.
Start at the bank where you do most or all of your personal banking and set up an appointment with a loan officer. (If you insist on keeping all your cash in a sock in the freezer, ask friends for referrals.) Explain your intentions — that you’re buying to flip, and that if all goes well, you hope to do it again. You will not appreciate the true value of having a solid relationship with a personal banker until you need last-minute funds wired into your account to go toward your down payment and it’s the Friday before a holiday. A loyal banker will find a way to make it happen.
Before You Sign: Kirsten's Nine Questions for Potential Lenders