Benefits of Business Credit
Just like a person, a business its own credit score, known as business credit. It
Are you an experienced fix and flip investor? Or are you new to fix and flip investing? Whether you are experienced or looking to get started we have the perfect product that would fit your level of experience. Our fix and flip loan programs are completely experience-driven and only requires 660 credit score to get started. With these minimum requirements in combination with our quick processing and underwriting process, we can close your loan within 14-21 days.
A fix and flip loan is a type of short-term loan specifically designed for real estate investors who are looking to purchase and renovate a property with the intention of quickly reselling it for a profit. These loans are typically offered by private lenders, and they provide funding for the purchase and renovation of a property, with the loan being paid back when the property is sold.
A fix and flip loan allow investors to “leverage” their money. What can leveraging your money do for you? It allows investors to get into multiple properties at a time, fix them up and sell them for a profit. With up to 80% Loan-to-value and 100% of rehab costs covered you as an investor would only need to bring 20% down payment to closing. Because only 20% of your money is tied up in one property, you are now capable of doing multiple properties at once!
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Fix and flip loans are typically used in the real estate industry to finance the purchase and renovation of properties with the intention of quickly reselling them for a profit. Therefore, a business that specializes in buying, renovating, and reselling residential or commercial properties would be an ideal fit for a fix and flip loan.
However, it’s important to note that fix and flip loans come with higher interest rates and shorter repayment terms compared to traditional mortgage loans, and they can carry significant risks. Before obtaining a fix and flip loan, it’s crucial to have a solid business plan and a thorough understanding of the real estate market and the potential costs involved in buying and renovating a property.
Speed: Fix and flip loans are designed to be processed and disbursed quickly, allowing borrowers to take advantage of timely investment opportunities.
Flexibility: Fix and flip loans offer more flexible underwriting criteria compared to traditional mortgage loans, making them easier to obtain for borrowers with limited credit histories or lower credit scores.
Loan Amount: Fix and flip loans typically offer higher loan amounts, which can be used to finance the purchase and renovation of multiple properties.
No Prepayment Penalty: Most fix and flip loans do not have prepayment penalties, allowing borrowers to pay off their loans early without incurring additional fees.
Higher Interest Rates: Fix and flip loans have higher interest rates compared to traditional mortgage loans, which can significantly increase the cost of borrowing.
Shorter Repayment Terms: Fix and flip loans have shorter repayment terms, usually ranging from 6 to 18 months, which can make it difficult for borrowers to pay off their loans in a timely manner.
Risk: Fix and flip loans are high-risk investments, and borrowers could lose money if the property does not sell as quickly or for as much as expected.
Required Equity: Fix and flip loans typically require borrowers to provide a significant amount of their own money as equity, which can be a barrier for those with limited financial resources.
Cost of Renovations: The cost of renovating a property can be higher than expected, which can put additional financial strain on the borrower and make it difficult to repay the loan.
In conclusion, fix and flip loans can be a useful tool for real estate investors looking to quickly finance the purchase and renovation of properties, but they also come with significant risks and high costs. It’s important to carefully consider the pros and cons of fix and flip loans and to have a solid understanding of the real estate market before obtaining one.