Fix and flip loans are a great vehicle for real estate investors these days. With the number of foreclosures and bank owned properties still at or near all time highs in many locations throughout California, opportunity is there for investors to profit.
Fix and flip loans are typically short term loans that incorporate funds to cover interest payments for 4-6 months and have a builders control account that can be drawn on to rehab the subject property. These days, our fix and flip loans are funding to 60% of the after repair value. Regardless of the after repair value, however, fix and flip loans do require cash from the buyer. We typically require a minimum of 20% of the total project cost cash in from the buyer.
For investors getting started, coming up with a substantial amount of cash may be difficult. We also have equity partners that are willing to partner with borrowers to supply this upfront cash contribution in exchange for a percentage of the profits on the back end of the flip. This is not cheap, but it is a great avenue for those borrowers who are short on funds to close quality deals.
For those who do take advantage of an equity partner, we will have some borrower requirements. We will need to see that they do have some experience (either with real estate investing, contracting experience or a combination of both), or we will need to see some strength elsewhere in the file (for example, great credit, assets in retirement, etc).
Right now, we are only able to offer this program here in California, but for California real estate investors, we can truly offer some aggressive fix and flip loan programs. In addition, the draw process to access money for the rehab is very straight forward, allowing for advances on funds so there is no out of pocket costs in addition to the cash required at close. If you would like more information, please view our rehab loans overview.
Comments(1)