re: Question About Financing a House

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You watch all these shows on HGTV about fixer uppers, but how does the financing work?

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For the guys and gals on HGTV, it works like this: They get paid by HGTV, they take that money to buy the first couple of houses, then they roll the profits into the next house, sell, roll, rinse and repeat!!!

For everyone that doesn't have a tv show, I don't know how much of them are using traditional financing. My friend that does this, did his flip four years ago. He borrowed 50K from his home equity line and had received an inheritance of 50K. He bought his first property at foreclosure for about 42K and put 40K into it. Sold it for 128K. So he had 146K in cash. Paid off 25K of the home equity line. Then with remaining 121K, put about 110K between purchase and upgrades. Sold it for 145K. So he now had 156K in cash. Paid off other 25K of equity line, now had 131K in cash. Spent about 120K on third house, between purchase and upgrades, sold it for 165K. Now has 176K with no debt. Just kept finding and rolling.