Is A Flix & Flip Loan Right For You?
What Is A Fix & Flip Loan?
- Fix and flip loans, also known as rehab loans, are short-term financing options that are specifically designed for investors who plan to purchase a property, renovate it, and then sell it for a profit (or refinance and hold the property). These loans offer several advantages over traditional financing options, and they can be a valuable tool for investors who are looking to quickly and efficiently turn a profit in the real estate market.
What Are The Advantages?
- One of the primary advantages of fix and flip loans is that they are typically easier to qualify for than traditional mortgages. Since these loans are meant to be short-term financing options, lenders are often more willing to take on the risk of providing them. This means that even investors who have less-than-perfect credit or who don’t have a long history in the real estate market can still access the funds they need to pursue their investment opportunities.
- Another advantage of fix and flip loans is that they can provide investors with access to larger amounts of capital than they might be able to get with a traditional mortgage. This is especially useful for investors who are looking to purchase and renovate properties that are in need of significant work. With a larger loan amount, investors can make more extensive renovations and potentially increase the value of the property more significantly.
How Long Can It Take?
- Furthermore, fix and flip loans can often be obtained more quickly than traditional mortgages. This is because the process of applying for and obtaining a fix and flip loan is typically much simpler and more streamlined than the process of applying for a traditional mortgage. This means that investors can access the funds they need more quickly and can begin their renovation projects sooner.
What Types Of Fix & Flip Loans Are Available?
There are several different types of fix and flip loans available, and each one has its own unique features and benefits. Some common types of fix and flip loans include:
Hard money loans:
- These are loans that are provided by private investors or lending companies, rather than traditional banks. They are typically easier to qualify for than traditional mortgages, but they often have higher interest rates and more stringent repayment terms. We have access to local private investors who we can tap into – if their product best suits your needs.
- These are short-term financing options that are designed to provide investors with the funds they need to purchase a property before they have sold their current property. They are typically used by investors who are looking to quickly move from one property to another.
Purchase money loans:
- These are loans that are provided to investors specifically for the purpose of purchasing a property. They can be used to finance both the purchase price of the property and the cost of any necessary renovations.
Things To Consider
- When considering a fix and flip loan, it’s important for investors to carefully evaluate the terms of the loan and to choose a lender that offers a loan that is well-suited to their needs. Some key factors to consider when evaluating fix and flip loans include:
- The interest rate on a fix and flip loan will have a big impact on the overall cost of the loan. It’s important to choose a loan with a competitive interest rate to keep the cost of borrowing as low as possible.
- The repayment terms of a fix and flip loan will determine how quickly the loan needs to be repaid, as well as any penalties that may be incurred for late or missed payments. It’s important to choose a loan with repayment terms that are manageable and that fit with the investor’s overall strategy.
- Some fix and flip loans may include prepayment penalties, which are fees that are charged if the loan is repaid early. It’s important to carefully evaluate any prepayment penalties to ensure that they won’t unduly impact the investor’s ability to repay the loan.
In addition to these factors, investors should also consider the reputation and track record of the lender when choosing a fix and flip loan. It’s important to choose a lender who has been around (Aceland has been doing this for almost two decades!) and not only do we originate these loans Bill Halick is an avid real estate investor himself and has been a borrower of these loans while he has been building his real estate portfolio – which means he knows what it’s like to be the borrower and that translate into being able to better understand the loan from your perspective.
Our wide array of fix and flip loan options means you can get multiple options all from one source – Aceland Mortgage – the number one mortgage company for all your mortgage needs!
To learn more about Fix & Flip loans call (800) 254-3150 Aceland today and ask to speak with one of our knowledgeable mortgage professionals. We look forward to serving you!
You can also visit our contact page here https://www.acelandmortgage.com/contact-us/ or use the online Chat to get in touch!