Dear Friends,

Here are the most common questions we get on Fix and Flip loan scenarios!

What are your rates?

Rates are subject to change but are currently between 9% and 11% depending on credit and experience.

How many points do you charge?

We generally charge 1-3 points depending on the loan amount and borrower’s experience. For example, we wouldn’t want to only charge 1 point on a 100k loan but we would be happy to charge 1 point on a 1 M loan. The more loans you do with us the better your pricing gets.

Do you finance 100% of Rehab?

Yes! :] We fund 100% of Rehab through reimbursement

How does a borrower request a draw / reimbursement? What is the timeline to fund a draw?

The draw process requires you to provide receipts or invoices as proof of money spent and schedule a video call to see that the work is complete. Details about our draws process are available here.  Assuming timely submission of information to us, we try to fund draws within three business days.

What is the max leverage you offer?

We make loans up to 90% LTC. Currently we offer up to 90% LTP for experienced borrowers with 740 plus credit. Depending on experience and credit, you will likely have to bring 10-15% for the down payment of the property.

How much money do I need to put down?

Depending on experience, A borrower will typically come in with 10-20% down.

Can I use a private money lender for the down payment?

It depends, we don’t allow for borrowed funds to be used for the down payment or for 2nd mortgages to be recorded at close, however, if you have sufficient liquidity in your account, have funds seasoned for 2 months or your PM is on the entity and signs as a guarantor…. we may be able to make it work. If using a private money lender is your plan, we should strategize ahead of time to ensure a smooth closing.

Can I use a HELOC of a down payment?

It depends, we don’t allow for borrowed funds to be used for the down payment, however, if you have already drawn the funds and can verify the money has been seasoned for two months, Or if  you have sufficient liquidity without the heloc there are ways we can make it work. If that is your plan it’s important we plan in advance to ensure a smooth closing. 

Do I pay fees and interest on the whole loan amount or just the purchase financing?

You pay origination fees on the total loan amount. You only pay interest on borrowed money, so if you haven’t drawn from your rehab budget, you wont pay interest on undrawn funds. This means that as you draw on your rehab budget, your monthly payment will increase accordingly.

Do you order an appraisal?

Yes, a BPO on loan amounts under 500k and an appraisal on loans over 500k. We use a third party appraiser that provides us As-Is and after repair value. ARV is determined using your SOW.

What are the five common reasons why a loan submission gets denied?

• 1. Property is not in a state that we finance or in a location that an appraiser would consider rural
• 2. Property value (or purchase price) < $100,000, or loan amount < $75,000 (or less than $40,000 per unit for multifamily)
• 3. Credit score < 640 or has major delinquencies over the past 2-4 years
• 4. Liquidity < $25,000 or not enough to cover down payment, closing costs, 3-6 months of payments, or rehab reserves
• 5. Newer investors taking on extensive rehab projects

What is counted as liquidity? 

Checking, savings, and money market accounts.  We can also consider retirement accounts, stocks, Life insurance policy or annuity are credited 100%.  A Certificate of deposit is credited at 90% of balance and, stock, bonds, mutual funds are credited at 50%

Do you do a hard credit pull?  How often? 

We do an initial soft pull when releasing an offer or once an offer is accepted. We do a hard pull once the loan enters underwriting. Hard credit pulls are good for 90 days.

I have a partner on this deal, do they need to sign loan documents and be a guarantor?

It depends, If multiple members are on the borrowing entity, all members with more than 25% ownership of the entity must be on the loan as a guarantor and their credit is taken into consideration. Members with less than 25% ownership do not need to be on the loan and their credit is not taken into consideration.

We hope this helps! Please let us know what question you have that we left out!