Businesses that build houses for sale or to rent have a number of options to choose from in terms of raising capital and accessing working capital. A traditional bank loan is typically used by these businesses to obtain either working capital to continue operations or to obtain a line of credit so that they may obtain necessary materials to meet their deadlines and perform the repairs and maintenance lead generation. Working Capital Options for Businesses that Build Houses generally fall into one of two categories:
Options for Businesses that Build Houses
Sale & Rent Back Agencies: This type of business works with construction companies that build houses for sale or rent to individuals or other businesses This business pays cash for houses in Colorado. When a client requests to be put on the waiting list for one of these modular homes, the agency contacts the owner and arranges for an inspection, title transfer, and purchase of the property from the client. Once ownership is established, funds are transferred and a contract is signed for the sale of the unit. Most sale & rent back transactions are handled through The Real Estate Holding Company (RESC).
Account Receivables Funding: This type of financing is obtained from banks when the contract for the purchase of a modular home expires or is otherwise unable to be fulfilled. This financing option is often used by real estate companies that build houses for sale and rent them out to the market.
In order to qualify, the company must have reasonable plans for meeting expenses such as furnishing raw materials, purchasing necessary permits, and marketing the property during its useful life. Working Capital Options for Businesses that Build Houses generally fall into one of two categories: Accounts Receivable Funding and Line of Credit Funding. These options are generally used by construction companies that need to raise small amounts of capital occasionally, rather than frequently, in order to satisfy short-term cash needs.