Fix & Flip funding

A Fix-and-Flip Loan from a hard money lender is a short-term loan designed for real estate investors to purchase, renovate, and resell properties. These loans provide quick access to capital for flipping properties that need significant repairs or improvements. Unlike traditional loans, hard money loans are based on the property’s value and its after-repair value (ARV) rather than the borrower’s creditworthiness.

Key Features of a Fix-and-Flip Loan: 

Property-Backed Financing: The loan is secured by the real estate property itself, not the borrower’s personal credit score. This makes it easier for investors to obtain financing, especially if the property has strong potential for profit. 

Short-Term: These loans typically range from 6 to 12 months, giving the borrower time to purchase, renovate, and sell the property within that period. 

Fast Funding: Hard money lenders can approve and fund loans much faster than traditional banks, often within a week or two, which is crucial for real estate investors working on tight timelines.

Typical Loan Terms for Fix-and-Flip: 

Loan Amount: Typically, hard money lenders can provide up to 90% of the purchase price and 100% of the renovation costs, based on the property’s value and after-repair value (ARV). Interest Rate: Generally ranges from 10% to 12%, depending on the specifics of the loan and the investor’s profile. 

Loan-to-Value (LTV): Loans often provide up to 90% LTV for the purchase price and 100% for renovation costs. Points: Hard money loans often come with 1-3 points, which is a fee of 1-3% of the loan amount paid at closing. 

Term: Typically 12 months, with the possibility of extensions if needed. 

Origination Fee: A standard fee of $499 for processing the loan.

These loans are ideal for investors who need quick, flexible financing to take advantage of lucrative real estate opportunities without relying on traditional lending institutions.