Fix-and-flip loans also known as rehab loans are used by short-term real estate investors to purchase and renovate a property before flipping it for a profit. This type of funding for flipping houses offers investors fast closings for properties in any condition. The most popular type of fix-and-flip loans are hard money loans.
We offer fix-and-flip loans to new & seasoned investors with competitive rates and terms. You can get prequalified online in minutes, by simply applying online here or reaching out to us by phone at 877-231-3111 or by email at firstname.lastname@example.org.
Who are fix and flip loans good for
- These loans are good for seasoned and inexperienced investors that are looking to add value to an existing house, condo, townhome, duplex, triplex, & quadplex, and then sell it for a profit.
- Investors who need to close a loan fast usually in 15 days from the contract date
- Investors who rehab multiple properties at once that do not wish to tap into all their liquidity reserves
How To Qualify For A Fix and Flip Loan
A majority of Hard Money Lenders finance loans based on the asset itself which makes the process of qualifying for a fix and flip loan a lot easier, quicker, & smoother than traditional bank financing. Here are some of the criteria to keep in mind if you are looking to obtain financing for a project.
- No bankruptcies within the last 36-48 months
- No tax liens or Judgements
- A clean criminal record (Mainly looking to ensure there are no financial or real estate related crimes)
- Have an LLC or Corporation set up (Most lenders only lend to entities)
- Credit Score above 580
Fix & Flip Terms and Conditions
The terms and conditions vary among lenders. Below is a baseline of what to expect. The less risk involved the better the terms.
- Term: Up To 1 Year
- Closing Time Frame: 7-14 Business Days
- LTV: 65 -90%
- Down Payment: 10 – 35%
- Rehab Funds Covered: 50 – 100%
- Rates: 6.99 – 12%
- Origination Costs: 1-3%
- Closing Costs: 2-5%
Where to find properties to flip
There are many ways to source deals and I suggest building relationships with local Wholesalers and Realtors as they will be your main source to find deals. You could also reach out to homes that are being sold by the owner of the property and negotiate a deal that both parties agree on. Then you also have resources like Zillow and Redfin that show homes for sale. You could also network on real estate investor sites such as bigger pockets that have a wealth of knowledge on all topics within the real estate industry.
Important things to remember
Before going through the process of searching for a home to flip I suggest doing your homework of the area and really understand what is being sold & the average day’s homes in that area sit on the market. You don’t want to get into a property in an area that has minimal growth which could hinder your ability to sell quickly. The longer you have the loan out the more it eats into your return on investment.
Now that you have a basic understanding of what a fix and flip loan is and how it works, it’s time to find a property to flip. If you have additional questions do not hesitate to reach out to us. Happy hunting!