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Fix and Flip Loans

LOAN PURPOSE: Rehab loan for non-owner occupied residential investment property.


TERM: 12 months standard, 18 month option case-by-case.

BORROWER TYPE: Entity required.

MINIMUM EXPERIENCE: NO prior experience required.

MAXIMUM LOAN-TO-VALUE (LTV): Up to 70% After Repair Value (ARV) LTV.


WHEN DO WE USE LTV VS LTC?: Generally, we use the lesser of LTV or LTC calculation.

REHAB/CONSTRUCTION FINANCING: Funding up to 100% rehab budget up to % Approved LTV of Total Costs.

FOREIGN NATIONALS: Not allowed from ineligible country list.

PROPERTY TYPES: Non-Owner Occupied, Attached or Detached SFR, 2-4 unit properties, Townhomes, Condos.

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Why Choose a Fairmount Fix and Flip Loan?

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Fix and Flip Loans FAQs

A fix and flip loan can be used to finance a variety of properties, including single-family units, multi-family residences, and commercial properties. This type of loan is not limited to residential properties but can also be used for commercial real estate ventures. It’s important to note that the type of property and its condition can influence the loan-to-value ratio and the overall terms of the loan. Fairmount fix and flip loans are limited to non-owner occupied, attached or detached single family rentals, 2-4 unit properties, townhomes, and condos.

The typical term for a fix and flip loan is quite short, usually ranging between 12 to 24 months. However, repayment terms can extend from six months up to three years, depending on the lender, the borrower’s qualifications, and the specifics of the investment property deal. Fairmount length of term for a fix and flip loan is set to a 12 month standard, but may be extended to 18 in some cases.

With a fix and flip loan, you can typically access funds much quicker than traditional home loans. While traditional home loans may require months for approval, a fix-and-flip loan allows you access to funds within a week. It is this fast funding feature that makes these loans particularly appealing to real estate investors who need to have cash-on-hand quickly, especially when bidding on foreclosures or auctioned properties. Fairmount can provide fast fix and flip funding in 7 days or less if necessary.

Yes, there are specific eligibility requirements for obtaining a fix and flip loan. First, you’ll need to disclose certain financial information, like your credit score, income, and the details of your investment along with the intended strategy.

You should have a good to excellent credit score for most types of fix and flip loans. However, some loan types, like hard money loans, have more flexible requirements. Fairmount can provide these types of loans and may be a good option if you’re a real estate investor with a less-than-perfect credit score.

While many fix and flip loan programs require you to demonstrate a successful track record in real estate investing, Fairmount doesn’t require any prior experience. However, this is only an option and prior experience is recommended, as this proves you are more likely to make a profit from the property you’re planning to flip.

Please note that these requirements can vary depending on who your lender is and the specifics of the loan type you’re applying for. To understand the best options available to you, it is recommended to contact Fairmount Funding directly and discuss the details of your case.

The interest rates for a fix and flip loan can vary depending on multiple factors such as the borrower’s credit score, the type of loan, and other considerations. Typically, the rates will range between 7% and 18%. For instance, hard money loans, which are popular for fix and flip projects due to their quick processing times, may have rates starting at 4.95%. However, they can also reach higher percentages depending on the lender and specific loan terms. Remember, other fees such as points can also apply, which could range from 1 to 6 points.

Yes, you can use a fix and flip loan for properties at auction or foreclosure. This type of loan is intended to cover the costs of buying, holding, and renovating a home before reselling it. In particular, private money loans are a great option for both beginner and experienced fix and flippers who need financing after buying a property at auction. It’s important to note that hard money loans, which are similar to private money loans, must be secured against real estate. This ensures that the lender mitigates their risk, especially when bidding at auctions where the winning bidder is uncertain.

The Loan-to-Value (LTV) ratio and After Repair Value (ARV) play important roles in determining the amount of financing you can receive. The LTV ratio measures the amount borrowed in relation to the value of the asset, and a higher LTV ratio indicates a higher risk for the lender. Usually, lenders approve loans up to certain LTV ratios like 80% for conventional loans. If your LTV exceeds that, you might need to pay for additional mortgage insurance or face a declined loan.

In the case of property flipping, lenders, especially hard money lenders, use the ARV to determine the maximum loan amount. Like Fairmount Funding, they typically offer loans up to 70% of the ARV. Therefore, a higher estimated ARV could potentially increase the amount of financing you can receive. However, it’s important to note that the ARV is an estimate and can be difficult to calculate accurately, and it can be sensitive to housing market fluctuations. Hence, these factors need to be considered carefully while planning for financing.

What Are Fix and Flip Loans?

Fix and flip loans have become increasingly popular among real estate investors in the United States. If you’re unfamiliar with the concept, fix and flip loans are a specialized type of financing designed specifically for individuals or businesses engaged in the practice of purchasing distressed properties, renovating them, and then selling them for a profit. Essentially, these loans provide the necessary funds to acquire a property, cover renovation costs, and carry out the necessary improvements before putting it back on the market.

The main appeal of fix and flip loans lies in their flexibility and speed. Traditional mortgages are typically ill-suited for investors looking to buy properties in poor condition, as they often require substantial collateral and are subject to strict approval processes. In contrast, fix and flip loans are specifically tailored to address the unique challenges faced by real estate investors. They offer faster approval times, shorter repayment periods, and are primarily based on the property’s potential value after renovation rather than its current condition.

By leveraging fix and flip loans, investors can seize lucrative opportunities in the real estate market, revitalize distressed properties, and generate substantial returns on their investments. However, it’s important to note that these loans are best suited for experienced investors with a solid understanding of the market and the potential risks involved. In the next sections, we’ll explore the benefits of fix and flip loans, the different types available, and how to qualify for them.

Benefits of Fix and Flip Loans

Fix and flip loans offer a range of benefits that make them an attractive option for real estate investors engaged in property rehabilitation and resale. One of the key advantages is the potential for quick profits. With the ability to secure financing in a timely manner, investors can swiftly acquire distressed properties, make necessary repairs or renovations, and then sell them at a higher price. This rapid turnaround time allows investors to maximize their returns on investment and capitalize on market opportunities.

Another significant benefit of fix and flip loans is their accessibility. Traditional lenders often impose strict criteria and extensive documentation requirements that can deter investors, particularly those with less-than-perfect credit or limited financial resources. However, fix and flip lenders focus more on the property’s potential and the investor’s track record, enabling a wider range of individuals to secure funding for their projects. Additionally, many fix and flip lenders offer personalized support and expertise, providing valuable guidance throughout the loan process and ensuring the investor’s success.

Furthermore, fix and flip loans provide investors with the flexibility to tailor the terms of the loan to their specific needs. This flexibility encompasses aspects such as loan amounts, interest rates, and repayment terms, allowing investors to structure the financing in a way that aligns with their investment strategy and goals. Overall, the combination of quick turnaround times, accessibility, and flexibility makes fix and flip loans an invaluable tool for real estate investors seeking to maximize their profits and expand their portfolios.

Learn more here all about the benefits of fix and flip loans.

Different Types of Fix and Flip Loans

When it comes to fix and flip loans, there are several options available to real estate investors. Understanding the different types of loans can help investors choose the financing option that best suits their specific project and financial goals.

Here are a few common types of fix and flip loans:

Hard Money Loans: Hard money loans are a popular choice among fix and flip investors. These loans are typically provided by private lenders or investors and are secured by the property being purchased. Hard money loans are known for their quick approval process and flexible lending criteria. They focus more on the property’s potential and the investor’s experience rather than their creditworthiness.

Bridge Loans: Bridge loans are another option for investors looking to finance their fix and flip projects. These short-term loans bridge the gap between the purchase of the property and the sale of the property or securing long-term financing. Bridge loans provide investors with the necessary funds to acquire and renovate the property quickly. They often have higher interest rates and fees but offer the advantage of quick access to capital.

Home Equity Line of Credit (HELOC): Investors who already own a property with equity may consider using a home equity line of credit for their fix and flip projects. A HELOC allows investors to borrow against the equity in their existing property. This type of loan can provide investors with flexibility and lower interest rates compared to other financing options. However, it’s important to note that using a HELOC puts the investor’s primary residence at risk if the project does not go as planned.

Private Money Loans: Private money loans involve borrowing funds from individuals or private lending companies. These loans are typically based on personal relationships or connections within the real estate industry. Private money loans offer flexibility in terms of loan terms, repayment schedules, and interest rates, as they are negotiated directly between the borrower and the lender.Each type of fix and flip loan has its own advantages and considerations. It’s crucial for investors to carefully evaluate their specific project requirements, financial situation, and risk tolerance to determine the most suitable loan option.

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Fix and Flip Loan Rates

When considering fix and flip loans, it’s important for real estate investors to understand the typical interest rates associated with this type of financing. Fix and flip loan rates can vary depending on several factors, including the investor’s experience, the property’s condition, loan term, and the lender’s policies. Generally, fix and flip loan rates tend to be higher than traditional mortgage rates due to the short-term nature and higher perceived risks of these loans.

The interest rates for fix and flip loans are often presented as an annual percentage rate (APR). APR includes not only the interest rate but also any additional fees or charges associated with the loan. While fix and flip loan rates can range widely, it’s common to see rates between 8% and 15%. However, rates higher than 15% may be charged for riskier projects or borrowers with less experience.

Factors that can influence the specific interest rate offered to an investor include their creditworthiness, the loan-to-value (LTV) ratio, and the scope of the renovation project. Investors with a strong credit history and a lower LTV ratio (indicating a larger down payment or equity in the property) may be able to secure more favorable interest rates.
It’s important for real estate investors to carefully consider the interest rates and associated costs when evaluating the feasibility and profitability of a fix and flip project.

While higher interest rates may impact overall project costs, they can be offset by factors such as the potential for quick profits, the property’s appreciation value, and the availability of flexible financing terms.

How to Apply for a Fix and Flip Loan

Applying for a fix and flip loan involves several steps to ensure a smooth and efficient process. While the specific requirements and procedures may vary depending on the lender, here is a general overview of the steps involved in applying for a fix and flip loan:

Research Lenders: Begin by researching and identifying lenders who specialize in fix and flip loans. Look for reputable lenders with experience in the real estate investment industry and a track record of providing financing for similar projects.

Gather Documentation: Prepare the necessary documentation to support your loan application. This typically includes personal identification, financial statements, credit history, tax returns, property purchase agreement or contract, and a detailed scope of the renovation plan.

Develop a Business Plan: Create a comprehensive business plan that outlines your investment strategy, project timeline, renovation budget, expected returns, and exit strategy. A well-structured business plan helps lenders understand the viability of your project and your ability to repay the loan.

Submit the Loan Application: Complete the loan application form provided by the lender. Ensure that all required information is accurately filled out, and include any supporting documents requested. Be prepared to provide additional information or clarifications if needed.

Property Evaluation: Lenders will assess the property’s value and potential after renovation (ARV). They may conduct their own appraisal or request a third-party appraisal. Prepare the necessary property details and provide access for appraisal purposes.

Underwriting and Approval: The lender will review your application, financials, business plan, and property evaluation. This process, known as underwriting, involves assessing the risks and determining the loan terms. If approved, you will receive a formal loan offer detailing the loan amount, interest rate, repayment terms, and any associated fees.

Closing and Disbursement: Once you accept the loan offer, the closing process begins. This involves signing the loan agreement and any necessary legal documents. After closing, the lender will disburse the funds, allowing you to proceed with purchasing the property and initiating the renovation process.

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How to Qualify for Fix and Flip Loans

Qualifying for a fix and flip loan requires meeting certain criteria set by lenders. While the specific requirements may vary depending on the lender and loan type, here are some common factors that lenders consider when evaluating loan applications for fix and flip projects:

Experience: Lenders often prefer working with experienced real estate investors who have a proven track record in successful fix and flip projects. Demonstrating prior experience and expertise in the field can significantly increase the chances of loan approval.

Property Evaluation: Lenders assess the property’s potential value after renovation, known as the after-repair value (ARV). They consider factors such as location, market conditions, and comparable properties to determine the property’s ARV. A thorough evaluation of the property’s condition, scope of renovations, and potential profitability is essential for loan approval.

Financial Stability: Lenders typically require borrowers to have a solid financial standing. This includes a good credit score, sufficient cash reserves, and a low debt-to-income ratio. Lenders want to ensure that borrowers have the financial capability to handle the loan payments, renovation costs, and any unforeseen expenses that may arise during the project.

Down Payment: Fix and flip loans often require a down payment from the investor. The down payment amount can vary depending on the lender and loan terms. Having sufficient funds for the down payment demonstrates the investor’s commitment to the project and reduces the lender’s risk.

Business Plan: Lenders may request a detailed business plan that outlines the investor’s strategy for the fix and flip project. This plan should include the purchase price, estimated renovation costs, projected timeline, and expected profitability. A well-thought-out business plan showcases the investor’s preparedness
and professionalism, which can positively impact the loan approval process.

Collaboration with Contractors: Investors who have established relationships with reputable contractors and professionals in the real estate industry may have an advantage when applying for fix and flip loans. Demonstrating a network of reliable contractors who can handle the necessary renovations adds credibility to the project and assures lenders that the property will be efficiently improved.

Property Insurance: Lenders often require investors to obtain property insurance for the duration of the fix and flip project. Having appropriate insurance coverage protects the investment and mitigates potential risks. It’s important for borrowers to factor in insurance costs when preparing their project budget.

Overall, qualifying for a fix and flip loan involves showcasing experience, conducting thorough property evaluations, maintaining financial stability, providing a solid down payment, presenting a well-structured business plan, and having the necessary insurance coverage. By meeting these criteria, investors can increase their chances of securing the financing needed to pursue profitable fix and flip opportunities.

Fix and Flip Loans for Foreign Nationals

Foreign nationals who are interested in participating in the lucrative fix and flip market in the United States have options available to them. While the process for obtaining fix and flip loans as a foreign national may have certain nuances, it is certainly possible to secure financing for real estate investment projects. Here are some key points to consider when exploring fix and flip loans for foreign nationals:

Establishing Relationships with Lenders: As a foreign national, it’s important to establish relationships with lenders who specialize in providing financing to non-U.S. citizens. Conduct research to identify lenders experienced in working with foreign investors, as they will be familiar with the specific requirements and documentation needed for such loans.

Documentation and Verification: Foreign nationals seeking fix and flip loans will typically be required to provide additional documentation compared to U.S. citizens. This may include valid identification, proof of residency in the home country, verification of income and assets, credit history, and sometimes a valid U.S. visa. Lenders will use this information to assess your eligibility for the loan.

Down Payment and Reserve Funds: Lenders often require foreign nationals to provide a higher down payment compared to U.S. citizens. This serves as a risk management measure for the lender. Additionally, some lenders may require foreign investors to demonstrate adequate reserve funds to cover unforeseen expenses during the project.

Understanding Legal and Tax Implications: Foreign nationals investing in the U.S. real estate market should be aware of legal and tax implications. It’s advisable to consult with an attorney and tax advisor who are well-versed in international real estate transactions. They can provide guidance on legal structures, tax obligations, and any specific regulations or restrictions that may apply.

Building a Team of Professionals: As a foreign national, it can be beneficial to build a team of professionals to assist with your fix and flip projects. This may include real estate agents, attorneys, accountants, and property managers who have experience working with foreign investors. They can provide valuable insights, navigate local regulations, and ensure compliance with U.S. laws.

Navigating the fix and flip loan process as a foreign national may present some unique challenges, but with the right guidance and support, it is possible to access financing and pursue real estate investment opportunities in the United States. Working with experienced professionals who understand the complexities of international transactions can help streamline the process and increase the likelihood of a successful fix and flip venture.

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Best Fix and Flip Loans Cities
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Huntsville, AL
Anchorage, AK
Phoenix, AZ
Little Rock, AR
Los Angeles, CA
San Diego, CA
San Jose, CA
Denver, CO
Bridgeport, CT
Wilmington, DE
Washington, D.C.
Jacksonville, FL
Miami, FL
Orlando, FL
St. Petersburg, FL
Atlanta, GA

Honolulu, HI
Boise, ID
Chicago, IL
Indianapolis, IN
Des Moines, IO
Wichita, KS
Louisville, KT
New Orleans, LA
Portland, ME
Baltimore, MD
Boston, MA
Detroit, MI
Minneapolis, MN
St. Louis, MO
Kansas City, MO
Billings, MT

Omaha, NE
Las Vegas, NV
Manchester, NH
Newark, NJ
Albuquerque, NM
Bronx, NY
Brooklyn, NY
New York City, NY
Charlotte, NC
Fargo, ND
Cleveland, OH
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Oklahoma City, OK
Portland, OR
Philadelphia, PA
Providence, RI

Charleston, SC
Sioux Falls, SD
Nashville, TN
Austin, TX
Dallas, TX
Fort Worth, TX
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Burlington, VT
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