Fix and Flip Loans
Fix and Flip loans are a popular option for investors, particularly those who are looking to build their capital base by acquiring, rehabbing and reselling properties. Fix and Flip loans are typically offered for 6-12 month terms and can be given to new or experienced investors. Fix and Flip Loans also offer rehab funds kept in escrow and given to the investor in the form of draws. This means borrowers only need the downpayment funds to get a fix and flip loan.
Fix and Flip Loans typically require a down payment of 10-20% of the purchase price, making them accessible for investors to get into a investment deal. In addition, In addition, Fix and Flip loans have more flexible credit requirements than conventional bank loans, allowing borrowers with less-than-perfect credit to still qualify for funding on a deal. These factors make Fix and Flip loans an attractive option for investors looking to do deals with minimal funds out of pocket.
Some Key Fix and Flip Loan Characteristics
1) Down payment requirement of just 10-20% of the acquisition price
2) More flexible credit requirements compared to bank loans as the loans are Asset Based
3) Fix and Flip loans offer rehab financing, which allows borrowers to access the funds needed to rehab the deal
4) Fix and Flip loans have higher interest rates, but allow investors to access capital to acquire deals quickly, rehab them, and the sell or refi them into permanent rental financing
5) Fix and Flip loans are provided to the borrowers corporate identity allowing investors with less than perfect credit to get funding for deals
6) Fix and Flip Loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
7) Fix and Flip loans offer options for refinancing, including cash-out refinancing, which can help investors with equity to access the funds they need to rehab and sell or rent the property
5) FHA loans allow for higher debt-to-income ratios, which can help borrowers with higher levels of debt qualify for a mortgage
6) FHA loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
7) FHA loans offer options for refinancing, including streamline refinancing and cash-out refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.
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