Dear Friends,
Below we have outlined three simple steps that you can take to help pave the way for fast and efficient funding on your next Fix & Flip
Take 2-3 minutes to review this list and save yourself time and frustration later!
Here we go!
Get Your Entity Documents In Order!
Why does it matter?
Having your entity documents in order speeds up the lending process !
What you need to succeed with lenders
Entity is current and in good standing
Required Documents
Operating Agreement
Formation docs / Articles of Organization
Tax ID / EIN
Clear entity Structure and break down of ownership.
Have A Clear Trail For Liquidity!
What is considered liquidity
Cash in your account, checking or savings, personal or business account.
Money market accounts, liquid assets.
Retirement accounts, stocks, HELOC are credited at 50%.
What you need to succeed with lenders
2 months bank statements with proof of liquidity.
Clear paper trail of where the down payment is coming from.
Liquidity must come from a signor who holds at least 25% ownership of the entity.
Create A Detailed SOW to Maximize Appraised ARV
Why your scope of work matters
The SOW Impacts the loan amount because fix & flip loans are based on your cost.
The SOW Impacts the ARV
The SOW is used by the appraiser to determine the future value of the property.
The SOW helps create a schedule of items approved to draw for.
You can only draw for what’s outlined in your SOW for reimbursement.
What you need to succeed with lenders
A budget that is aligned with your purchase price and ARV.
A SOW that is detailed for the lender.
A SOW that sells the appraiser on the improvements and ARV.
A plan for communicating with the appraiser about the purpose of the appraisal, the improvements you will make and a list of strong comparable’s for consideration.
A clear plan for drawing from your rehab budget based on your SOW.
Here to be a resource for you!
