-
Fix and Flip Loans For Real Estate Property Investors
Real estate investors benefit from using fix and flip loans by getting a mortgage for the cost of the acquisition of the property and the cost of construction all in one loan closing. Once the property has been renovated, the investor will sell it for a profit. Many investors, including novices, can get fix and flip loans and start investing in distressed properties.
-
1 Reply
-
Fix-and-flip loans are a very popular non-QM mortgage loan option for real estate investors. Here are a few key points about how real estate investors can benefit from using fix and flip loans: All-in-One Financing: Fix and flip loans bundle the acquisition cost of the property and the renovation costs into one loan. This simplifies the financing process by avoiding separate loan closings. Access to Funding: These loans allow investors, including those new to real estate investing, to obtain financing for purchasing and renovating distressed properties they may not have had the upfront capital for otherwise. Short-Term: Fix and flip loans are designed to be short-term, usually 6-18 months. This allows investors to renovate/flip the property quickly and repay the loan after selling. Investment Property Only: These are investment property loans specifically for non-owner occupied properties intended to be fixed up and resold quickly for a profit. Higher LTV: Fix and flip loans often allow higher loan-to-value ratios than traditional mortgages, sometimes up to 90% of the purchase price plus rehab costs. Interest-Only Payments: Many fix and flip loans only require interest-only monthly payments during the renovation period. The key benefit is bundling the acquisition and rehab financing into one loan product designed specifically for the fix and flip investment strategy of buying, renovating and quickly reselling distressed properties for profit.