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Fix & Flip

Learn all about the conforming loan guidelines and requirements, as well as how to qualify and get started with your mortgage process. Obtain valuable insights and information to navigate the loan application process seamlessly.

What is a Fix & Flip Loan?

Looking to invest in real estate and flip houses for a profit? A fix and flip loan from Florida Home Loans is the perfect solution. Our short-term financing options allow real estate investors like you to purchase and renovate residential properties, covering all the expenses associated with house flipping. With our extensive experience in mortgage financing and a wide range of loan programs, we provide tailored financing solutions to meet your specific needs. Trust us to be your Florida resource for home loans. Contact us today and let’s get started on your fix and flip journey!

How do Fix & Flip Loans work?

Fix and flip loans come in different forms, like term loans or lines of credit, based on what you and your lender decide works best. These loans are backed by the property you’re fixing up, and you usually won’t face a penalty for paying the loan off early.

When figuring out how much money you can borrow, lenders look at several key numbers: the loan-to-value (LTV) ratio, the loan-to-cost (LTC) ratio, and the after-repair value (ARV).

  • LTV (Loan-to-Value) Ratio: This compares the amount you’re borrowing to the property’s value. Most fix and flip loans can cover up to 90% of the property’s price. So, if you’re buying a property for $100,000, a lender could lend you $90,000, and you’d need to come up with the remaining $10,000.

  • LTC (Loan-to-Cost) Ratio: This measures the loan amount against the total cost of your project, including buying the property and fixing it up. If your project costs $120,000 in total and the lender offers 80% LTC, you’d get $96,000 from the loan. You’d need to cover the remaining $24,000. Some lenders might offer up to 90% LTC.

  • ARV (After-Repair Value): This is what an appraiser thinks the property will be worth after your renovations. If a lender uses the ARV and offers 70% of the ARV as the loan amount, and your property will be worth $200,000 after repairs, you could get a loan of up to $140,000.

In short, the amount you can borrow with a fix and flip loan depends on the property’s price, your project’s total cost, and the estimated value after renovations. Lenders use these figures to decide how much they’ll lend you.

What is the Benefit of Getting a Fix & Flip Loan?

Getting a Fix & Flip loan has several key benefits, especially for people who buy, renovate, and sell homes for a profit. Here are the main advantages:

  • Fast Money: These loans provide quick funding, which is great for grabbing good deals fast.
  • More Projects: You can use less of your own money to start, allowing you to take on bigger or multiple projects at once.
  • Flexible Terms: The loan terms can be adjusted to fit the specific needs of your project, which helps manage costs better.
  • No Early Payoff Fees: If you sell the property quickly, you can pay back the loan without extra charges, maximizing your profit.
  • Better Cash Flow: Financing the purchase and renovation helps keep your cash available for other expenses or unexpected costs.
  • Buy More Properties: With a loan, you can afford properties that might have been too expensive, increasing your opportunities.
  • Value-Based Lending: Some loans are given based on what the property will be worth after you fix it up, potentially giving you more money to work with.
  • Expert Advice: Lenders who specialize in these loans can offer helpful advice and support, making your project more likely to succeed.

In short, Fix & Flip loans can give you the financial flexibility and support needed to successfully flip homes for profit.

How to Get a Fix & Flip Loan?

Accessing fix and flip loans may present challenges, particularly for newcomers to the real estate flipping scene. However, as you gain more experience, securing loans with competitive terms becomes more straightforward.

To find the appropriate fix and flip loan for your venture, follow these three steps:

Identify Your Financial Needs Start by thoroughly understanding your project. Compile details about the property, outline the work needed, and establish a realistic timeline. This planning helps in accurately determining the project’s costs. Knowing the total expense will guide you in figuring out the amount of financing required.

Assess Your Eligibility With a clear idea of your financing needs, next assess your qualifications such as how long you’ve been in business, your annual income, and your personal credit rating. This assessment will help identify the types of fix and flip loans you’re likely to qualify for.

Find a Lender The ideal lender for your fix and flip financing depends on several aspects, including the specifics of your financing needs, project details, and your own qualifications. It’s important to explore and evaluate various small-business lenders to discover who offers the most favorable rates and conditions.

For beginners in fix and flip, your personal financial history and credit score will play a crucial role in obtaining financing. In contrast, seasoned professionals can leverage their portfolio of flipped houses and business financials to secure better loan terms.

Why Choose Us?

With our extensive 20 plus years of experience in mortgage financing, we excel in delivering both conventional and non-conventional financing options tailored to suit our customers’ needs. Collaborating with a wide range of investors and lenders, we proudly offer a diverse range of loan programs. Our utmost aim is to provide borrowers with the most optimal financing solutions available.

Contact us to learn more or get started today!

Begin your mortgage process!