Special offer

Rates Drop for Fix and Flip loans

By
Mortgage and Lending with Chris Martin Jr. Hard Money

Fix and Flip RATES DROPPED FOR CALIFORNIA TODAY. Too much cash, not enough deals. It's a good time to be a flipper!

We have seen a tremendous influx of capital of late. Rates have responded, and we are now 2+% lower than a year ago. More buying power is pushing us to fund bigger deals or a much higher volume of low margin deals.

Putting lipstick on the pig is no longer the key to success, upsizing and modernization are the new profit making buzzwords. Lower cost of funds allows longer hold times, making major renovation and expansion feasible.

I process a high volume of loans for experienced infill re-developers. I've found that having a Simple loan process and setting realistic expectations are crucial. Enjoying a diversity of funding sources ensures timely closing and enables aggressive dealmaking.

Experienced house flippers can get a really sweet deal: 

Interest Rates:

- ​7.25% up to 75% LTV

- ​7.50​% between 75-80% LTV

- 8.​00​% between 80-85% LTV

- ​8.75% between 85-90% LTV

+ 0.50% for 2-4 units and condos

 

Max Leverage: 

- 90% of purchase price 

- 75% of after repair value (ARV) w/ holdback 

- 70% of after repair value (ARV) w/o holdback 

- 100% of rehab costs (via holdback)   

We have a few more good years before we hit the iceberg (again), so make hay while the sun shines! It's time to move hard on residential 1 - 4 units, and then plan to exit the space in favor of multi-family in 2020. Yes, MF will be overpriced, but rates should be good, bank loan leverage high, and with cash from 1 - 4 liquidation, you can be in position to take down conservative income assets.