Fix And Flip Purchase And Rehab Loans With 100% Renovation Financing

This BLOG On Fix And Flip Purchase And Rehab Loans With 100% Renovation Financing Was Written By Gustan Cho

Fix And Flip Purchase And Rehab Loans are investment loan programs for real estate investors who need financing for the acquisition of a fixer upper PLUS the cost of the construction.

  • Fix And Flip Purchase And Rehab Loans are short term hard money loans for property flippers and real estate investors.
  • The Gustan Cho Team at Captial Network Group are experts in Fix and Flip Purchase and Rehab Loans with little down payment for real estate investors.
  • When it comes for real estate investors buying real estate that they plan on rehabbing and reselling, Fix And Flip Purchase And Rehab Loans is the loan program of choice.
  • Fix And Flip Purchase Rehab Loans work differently than conventional investment property loans where lenders are more concerned  with the asset (property) rather than the borrower when processing and underwriting the loan.

What Is Fix And Flip Purchase And Rehab Loans?

There are different types of Fix And Flip Loans.

  • Fix And Flip Loans for rehab only where the property investor purchases the property cash and just needs construction financing
  • The above can be done with a cash out refinance and if the property owner needs more funding, then the lender will finance the shortage for construction
  • Where the property is owned by the real estate investor with an existing mortgage and the fix and flip lender will pay off the first position and finance the first lien plus the rehab of the project
  • Where a real estate investor needs Fix And Flip Purchase And Rehab Loans where the lender will finance the acquisition PLUS the rehab costs of the project

The main purpose for fix and flip loans is to help real estate investors finance purchase plus the construction of an investment property. Once the property is done with the renovation, then the property is either sold or it is refinanced with an end long term traditional investment and/or commercial mortgage. Terms of Fix and Flip Purchase and Rehab Loans are normally six months to two years. Fix And Flip Purchase And Rehab Loans are designed to be short term investment property bridge loans where the property investor needs it very quickly with little paperwork to stabilize the property so the renovated property can either be sold or is bankable with traditional commercial lenders. The main objective of fix and flip loans for real estate investors is to sell the property prior to the mortgage balance being due and using the funds of the sale to pay off the fix and flip loan.

Benefits Of Fix And Flip Purchase And Rehab Loans Versus High Interest Rates

Fix and Flip Purchase and Rehab Loans are normally short term bridge financing used by real estate investors due being able to close quickly and with little document and no income verification or tax returns of the borrower.

  • Due to the ease and streamlined process of fix and flip loans, interest rates are higher than traditional investment property loans.
  • There are many cases where real estate investors can close on a property in less than a week with fix and flip and/or hard money financing where a bank may take 60 or more days.
  • The premium real estate investors pay with fix and flip and hard money loans is well worth the costs and fees these commercial lenders charge.
  • Time is money and there are many instances where real estate investors can get deals on properties with multiple purchase offers.
  • Other benefits is that many lenders will not finance a property that is not habitable, vacant, or needs extensive work.
  • Investment property lenders love property flippers, especially those with years of experience or who have a successful track record of flipping properties.

Because they’re usually short-term loans, fix and flip loans tend to carry interest rates that are higher than the ones for conventional loans. There is an advantage to using this kind of loan to rehab a property, however, since it’s possible to get the funding within a few days or weeks rather than having to wait two months or more.

Fix And Flip Lenders Versus Banks

The Gustan Cho Team at Network Capital Group offers Fix and Flip and bridge financing nationwide.

  • Most banks do not offer fix and flip purchase and rehab loans.
  • Banks and traditional investment property lenders usually offer financing for investment properties that is already stabilized and cash flowing.
  • Banks and traditional investment property lenders normally want to see borrower’s financials that date back three or more years and the financials of the investment property with leases already in place.

Borrowers of fix and flip loans can qualify with the following:

  • No Income Verification
  • No Tax Returs
  • Little, No, or Bad Credit
  • Asset Based Lending
  • Experience is key for little to no down payment on renovation financing

Qualifying For Short Term Fix And Flip Loans With 100% Renovation Financing

Fix and Flip Rehab Lenders and private money lenders want to see that the real estate investor has skin in the game. They want to see that borrowers have their own money in the real estate purchase.

Here are typical qualification requirements:

  • Up to 90% financing on the property purchase and 100% rehab cost financing as long as the After Repaired Value (ARV)  is within 65% to 70%
  • Closing in two to four weeks
  • Income Verification or Tax Returns are not required
  • No seasoning of fund requirements: No asset verification
  • No pre-payment penalty
  • 2nd position liens are allowed
  • GAP Financing is allowed

Recent Case Scenarios Of Fix And Flip Purchase And Rehab Loans

Here are recent fix and flip purchase and rehab loans that closed and funded:

  • Palm Harbor, Florida Single Family Home: $436,500, 85% of purchase price and 100% cost of renovation financed
  • Medford, Massachusetts Condo Conversion: $686,500, 86% of purchase price and 100% of the renovation costs funded
  • Oak Park, Illinois Single Family Home 2nd Floor Room Addition: $533,500, 80% of purchase price and 100% of construction costs funded
  • Tampa, Florida Single Family Home Renovation: $356,600, 83% of purchase price and 54% of renovation costs funded

Real Estate Investors in need of Fix And Flip Purchase And Rehab Loans where they need 100% financing on renovation costs, please contact Gustan Cho at 800-900-8569 or text Gustan at 262-716-8151 or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Comments are closed.