Rehab Your Own Financial House to Get More Projects Funded by Private Money Lenders in Philadelphia

Finding distressed houses to flip for profit may be what do you best.

But if you’re wanting to get more of your rehab projects funded by private money lenders in Philadelphia, the distressed house you may need to start with is your own financial house.

Too many new flippers are getting the impression from YouTube real estate investors that you can rehab houses with private money loans even if your credit score is low, you’re steeped in debt, you have no cash reserves and no track record of completing your flips on time and on budget.

They say as long as you find a great deal you can get funding. But consider this: you may find an airplane with a very safe track record… but if the pilot had never flown a plane before, would you still want to get on that flight? Probably not! Good private money lenders in Philadelphia aren’t just looking to score on one-time quick loans with newbie investors who “want to get their feet wet in real estate”. Rather, private money lenders are looking to invest in business-minded rehabbers who are building solid real estate investing businesses, and who know the importance of getting their own financial house in order.

What can you do to put yourself in a better position to qualify for loans from private money lenders in Philadelphia?


1. Improve your credit score

Wherever your credit score is right now, determine what needs to be done to improve it. Even in a short period of time having no late payments, reducing your debt and updating your information with the credit bureau can improve your score. (That’s not to say that your credit score WILL be a factor in getting a private money loan; rather, it’s a useful piece of information for some lenders and, more importantly, getting a good credit score requires the habits and skills needed to make sure you’re handling your personal debt well.)


2. Generate regular income

If you’re looking to move out of your current full-time job into flipping houses full-time, keep in mind that having that steady income will help you qualify for loans. Keep working at flipping houses on the side until you are sure that you can repeat successful flips in regular intervals. Again, that’s not to say that you MUST have a job to borrow money; rather, this is a way for brand new investors to feel confident that they can still pay their personal bills while getting started. As your investment portfolio grows, you may choose to reduce your working hours, or quit your job altogether, but it may not be the right choice for a brand new investor who has never done a deal before.


3. Pay off your debts

Some debts can be a liability to your credit score and can stand in the way of getting approved by private money lenders in Philadelphia. Debts not related to your real estate investing, like excessive car loans or credit card balances, can be very troublesome. What does a private money lender want to know: who else has a claim on your income!


4. Build up your cash reserves

This one is critical! Money in the bank can help make up for other factors working against you. It is always easier to lend money to a flipper who has three months of cash reserves for their current rehab project. If you don’t have that, you may want to look for a partner. Work together with their money and management skills and your rehabbing and deal-finding skills. Believe us when we tell you from experience: you will sleep better at night with a cash reserve in the bank.



It’s true that finding a deeply discounted house with huge potential ROI works in your favor, but private money lenders in Philadelphia will also be looking for you to have your own financial house in order. Keep working on improving your financial situation and especially on building up your cash reserves if you want to get more of your deals funded by private money lenders in Philadelphia.

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