How Our Fix and Flip Loans Work For You!
Ready to get your next rehab started? We’re ready to be your trusted partner by taking care of the financing so that you can focus on completing your project. We’ll provide funds toward the purchase and 100% construction costs – that means up to 90% of the total project costs are on us.
When you choose us to be your partner, you’ll be given a dedicated expert that specializes in rehabbing investment properties. Your expert not only knows the ins and outs of what you go through as an investor, but they have the financial know-how needed to secure your funding quickly, walk you through the entire process from start to finish Because they’re dedicated to your account, your lending expert is always just a phone call away if you have questions. Try getting that type of service from a traditional bank!
Aside from the dedicated specialist, our borrowers enjoy free in-house underwriting, hard money loans with competitive rates and closings in as little as 48 hours. When you’re buying investments in a competitive market, or don’t want to miss out while waiting for a bank, let us be your partner with a fix and flip loan for all of your projects between $100,000 and $5 million.
Questions And Answers for Fix And Flip Loans
Investing can be tricky, but knowing which type of loan to choose doesn’t have to be a headache. That’s why we’d like to help you answer your questions about fix and flip loans so you can determine if this is the right one for you.
What is a fix & flip loan?
It’s a short-term financing solution that is typically used to fund the purchase and repairs of an investment property. Investors can use this option for 1-12 month periods. It gets its name because investors, also called (house flippers) purchase investment properties with the intention to fix it up and sell it for a profit, also known as “flipping” it.
What is the difference between this and an acquisition loan?
Fix and Flip means that the lender is providing funds for both the purchase and the rehab of a property, whereas acquisition loans are solely for the purchase. You can normally use this option to purchase the land and building, then start renovations through a system of construction draws.
Do you need cash in hand for one?
Most lenders require a down payment of a minimum of 20% of the purchase price. Having “skin in the game” motivates investors to complete their project and in turn reduces the lenders risk of foreclosure.
How long until you have to pay it back?
These are normally short–term projects, meaning up to 12 months. When using hard money for these types of projects, the lender will look at the scope of the work for the project and the expected time on market once it’s complete and ready to sell. If your lender has experience and knows the market you’re in, there is normally no need for extensions and everything will be paid off upon the sale of the property.
What are typical interest rates?
Because these are short–term financing options, the interest rates tend to be higher than a traditional bank. Some lenders will hold sporadic sales and promotions with rates as low as 8%, but you’ll need to lock the deal in fast as they are limited–time offers. Rates will also vary depending on the lender and the market.
What is a prepayment penalty?
When you work with a lender for financing, especially on short-term options like a fix and flip loan, you may see a clause or term called a “prepayment penalty”. Lenders make their money off of the interest from your loan. If you sell the property faster and pay it off sooner than expected, the lender will not receive all of the interest payments. That is why some include the prepayment clause. It is a small penalty to pay so that the lender regain some of the interest payments lost by the borrower paying back their loan early.
If you choose one with no prepayment penalties, you can save money by selling the property sooner and paying off the remainder of your loan faster. Less interest payments means more money in your pocket.