The market for house flipping has never been stronger. Even as house prices surge, more and more people are stepping into the house flipping game to make a quick buck. And as such, more and more clients are calling me to ask if they can finance a house they plan to flip. Now, in a word, the answer would be: “yes.” But as with most things in this industry, yes really means, “it depends.”

And what it depends on is several things. First, the house needs to appraise for the price you are buying it for. What I have run into more than a few times is investors who see the potential in a house and are willing to overspend to acquire the property because they can do the work inexpensively and turn a profit. Now, I am not an advocate for overpaying in any situation, but especially during a flip. You need to be cognizant of your costs, and overpaying can be a big cost upfront. But if you severely overpay, then no appraiser will justify the loan and no bank will give you money.

Next, you need to be able to qualify for the mortgage as if you were buying the house permanently. And what I mean by this is you need to have the credit, income, and everything else to qualify for the mortgage as you would a mortgage for any other house. So if you already have a mortgage on a home and you are strapped, financially, you probably won’t be able to qualify, even if it is the deal of the century and you know you can make $250,000 in three weeks. Banks don’t care about your expectations for profit, they only care about your ability to repay the mortgage. Because if things don’t go as you plan, you still need to repay the bank.

But to truly understand your ability to get a mortgage if you are in the flipping business or would like to be in the flipping business, your best bet is to contact a qualified mortgage officer who can go through all of the scenarios with you.

If you have any questions about getting a mortgage on a property you plan to flip or getting a preapproval letter, please contact me. If you have anything to add, please leave a comment.