Fix and Flip information

Hard Money Lending

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Fix and flip is really a slang term to describe a type of real estate investment deal. The fix part is where a real estate investor purchases an undesireable single family home below market value and does some repairs to the property in order to make it more appealing. The idea is to significantly increase the market value of the property with the minimal expense possible so that the home can be resold for profit.
Typical repairs done are: adding bedrooms as needed, putting in a new kitchen, finishing a basement, replacing a roof or doing anything required to make a home have more curb appeal to buyers and of course, more valuable than when they started. It is part science and part art to know what repairs to do and how much to spend doing them.
The flip part refers to getting the property listed for sale in a short period of time and then locating a new person that will buy the home to live in it or rent it. This new buyer gets a loan and pays for the property. When the closing happens with the new buyer then the real estate investor, assuming they did the deal right, makes a profit.
Fix and flip investing has been around for quite some time, but it has become much more popular with the advent of TV shows such as Flip This House and Flip That House among others on cable stations.
If you are interested in becoming an investor who does fix and flips, then you have come to the right place! Read on to discover how you can get the money you need to flip properties regardless of your credit, job history or income.

Hard money lenders (HMLs) are typically private individuals or small groups that lend money (Hard money) based on the property you are buying, and not on your credit score. Usually these loans cost (percentage-wise) much more then an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees.

Who Needs Hard Money?

Developers and house flippers, amongst others, will use it to fund deals because you can often borrow up to 100% of your purchase price! On the other hand, hard money lenders will frequently require you to back up your loan with real assets. If you know you can buy a property and turn it quickly at huge profit, and you can’t get a standard mortgage, it might be one way to go. Some investors use hard money to get into the property, do some quick fixes to raise the property value, then get a new loan (based on the property’s new, improved value) from a bank to pay off the hard money lender.

House flipping formula


So, what’s the formula for the maximum purchase price (MPP) of a flip property? Here it is:

MPP = Sales Price – Fixed Costs – Desired Profit – Rehab Costs

Sales Price- equals the conservative estimate of what you can sell the property for.

Fixed Costs- equal all the costs, fees, and commissions that you can expect to pay during the project.

Desired Profit- is the minimum amount of money you want to make off the project when it’s complete.

Rehab Costs- are the material and labor costs required to rehab the property into resale condition.

Different loans In Real Estate

WHICH PRIVATE MONEY LOAN IS RIGHT FOR YOU?
There are many reasons why it might be appropriate to consider a private hard money loan. It can be difficult for even qualified buyers to secure loans for residential and commercial property. 

PRIVATE MONEY LOANS FOR RESIDENTIAL BUYERS
we provide hard money loans to residential, non-owner occupied buyers throughout Washington. Two of our most popular loan programs are the Buy and Hold program and the Fix and Flip program. The Buy and Hold program suits the needs of the investor looking for long-term fixed income potential. The Fix and Flip program was designed to assist investors looking to rehab and sell property. Fix and Flip loans are a specialty of ours and we work with many real estate investors who fix and flip homes on a very regular basis.

BUY AND HOLD HARD MONEY LOANS
Investors looking for income or looking to build a real estate portfolio while the market is strong can benefit from our buy and hold hard money loans. These loans allow buyers to borrow for the purchase of a rental property. We understand the need to move quickly when opportunities arise. Our application, appraisal and approval process can be accomplished in just a few days to ensure you are able to negotiate effectively with the property holder.

FIX AND FLIP HARD MONEY LOANS
If you’re an investor or flipper interested in buying properties that require all cash or hard money to fix and flip, consider our Fix and Flip hard money program. Our Fix and Flip private money loans provide up to 75% of the project cost, which is the purchase price plus the cost of the rehab. These loans have no prepay, which allows you to sell the property as quickly as you can.

HARD MONEY LOANS FOR COMMERCIAL BUYERS
Business owners, trusts, corporations and private partnerships often secure hard money loans for their commercial property needs. These private money loans can be used to rehabilitate or pay off mature notes on these commercial properties. These are often known as bridge loans or gap loans.
As a hard money lender with years of experience in the commercial lending sector, we understand the needs of business owners and investors. We will work with you to make sure that your commercial hard money loan meets your needs and offers the best rates at reasonable terms.

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