Dear Friends,

Here is a big picture overview on Fix & Flip financing for your value add investment properties.

Fix and flip loans are short term bridge loans that provide borrowers the opportunity to purchase properties that need improvements. Due to the condition of the properties, these purchasing opportunities often don’t qualify for conventional financing time frames or guidelines.

The flexible nature of Fix & Flip loans provides a solution to new and experienced investors with high leverage bridge loans that includes a rehab budget for property improvements. This allows investors the opportunity to buy properties below market value and force appreciation through property improvements with little money out of pocket.

Fix & Flip Loan Acronyms

• LTC – Loan to cost. Cost is a reflection of your purchase price plus your rehab cost.
• LTP – Loan to purchase price.
• LTV – Loan to as is value
• ARV – After Repair Value
• LTARV – Loan to after repair value. Based on estimated ARV.
• RTPP – Rehab to purchase price.

Qualifying factors

• Minimum credit score of 680
• Experience – We lend to both new and experienced investors. Experienced is verified through the chain of title for properties purchased and improved in the last 3 years.
• Liquidity – Borrowers typically need 10-15% liquidity for a down payment. liquidity is verified in personal or business bank statements.

Loan Terms Overview

• 7 – 10 day closing times.
• 12-18 month Loan term.
• Interest only loan with a balloon payment.
• Leverage is based on LTC and limited by LTARV
• Up to 92.5% LTV or 90% LTP
• Minimum loan amount – $100,000. includes purchase and rehab money.
• 100% of rehab funded through reimbursement.

Property Characteristics Overview

• SFR 1-4 units
• Multifamily 5-10 units

Appraisal

• Appraisal and interior inspection is required in most cases.
• The appraiser uses the SOW provided by the borrower to determine the ARV.

Required Documents

• Experience Verification Form
• Scope of Work
• Entity documents
• 2 months bank statements

We hope this overview has been helpful!

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