If you’re passionate about transforming properties, house flipping is your calling. As one of the highest-paying real estate jobs, house flipping can help you enjoy a lavish lifestyle and satiate your thirst for sprucing up homes with your expertise and aesthetic eye.
As you start planning your upcoming project, make sure you acquire sufficient financing. Fix and flip loans are specifically designed for people who want to use property as an investment. As a type of short-term real estate loan, a fix and flip loan can help you purchase and renovate property with the goal of selling at a profit within 12 to 18 months.
A fix-and-flip loan is the best choice if you’re looking for a smart way to fund your upcoming project. In this blog, we’ll offer a closer look at this financing option and help you make the right decision for your project. Keep reading, take notes, and leave any comments/questions you have below. Let’s begin!
1. What Can I Use a Fix and Flip Loan For?
Fix and flip loans are used to purchase residential properties at auctions or foreclosures, finance construction, renovation, design and upgrades, and cover additional property ownership costs.
2. What Are the Benefits of Fix and Flip Loans?
Since fix and flip loans are versatile in nature, investors reap a lot of benefits. For starters, the terms are flexible. If you take out a real estate loan from a bank or credit union, you’ll face many obstacles—like strict rules, lengthy procedures, and harsh regulations. The process will also be significantly more time-consuming and unpredictable.
In many cases, investors have to endure a long waiting period. By the end of it, the answer isnegative. After investing a lot of time, energy, and labor into the loan application process, investors feel frustrated.
Fix and flip loans have flexible terms with fewer regulations. The approval rate is high, so you don’t have to worry about waiting for ages and eventually being turned down. Fast approval also helps investors make speedy purchases and beat the competition.
When you buy the right property at the right time, you can maximize profit. A fast fix and flip loan will help you take advantage of low property rates in the real estate market.
In most cases, it takes a few days to get approved. Lenders are more focused on the property being purchased and renovated than the borrower. You’re in the clear as long as you have a smart, sensible, realistic, and logical flipping and repayment plan.
Recommended Read: Avoid These 7 Common House Flipping Mistakes
3. Can I Use a Fix and Flip Loan for Any Type of Property?
Yes, you can. The type or condition of the property you select will not affect your chances of loan approval. Banks, however, impose strict restrictions on the type and condition of the property that will be financed. This makes the flipping process more difficult and restrictive for investors.
While a property may not be in great condition, it can still hold a lot of potential. As an experienced flipper, you can use your expertise, skills, aesthetic insight, and vision to breathe life into it. However, banks and credit unions may not see eye to eye with you. You don’t have to worry about this with fix and flip loans.
3. InstaLend’s Fix and Flip Loans
At InstaLend, we’re committed to helping you steer your real estate business in the right direction. Our loans are asset-based; we don’t ask for income verification. We also require minimal paperwork so you can kick-start the loan application process without feeling overwhelmed and flustered.
We facilitate real estate investors by providing great terms, peace of mind, and fast approval and funding. At InstaLend, we provide fix and flip loans to newbies and experienced property flippers. The conditions are as follows:
- Loan amount: $50,000+
- Coverage: Up to 90% of the purchase price and 100% of rehab costs
- Loan terms: 12 months
- Minimum FICO: 620
- Interest rate: 10.5%+
- LTARV: 70%
- Prepayment penalties: None
- Property types: Single-family (1–4 units), condo, multi-family, mixed-use
We close fix and flip loans within two weeks. Everyone enjoys a fast turnaround when it comes to seeing a profit. Since our loans are short-term, you’ll see an ROI pretty quickly. Our loans are also less risky than conventional home loans. This is because they are backed by the property for which they were granted.
4.Are Fix and Flip Loans Only for Experienced Property Flippers?
Not at all! InstaLend also provides fix and flip loans to beginners who are just getting into real estate investing. As we mentioned earlier, we’re looking for a robust plan. We’ll grant you a loan if you can prove that you’ll complete your project successfully within the set timeline.
As an up-and-coming flipper, you can grow your portfolio and increase your income by taking out a fix-and-flip loan. Before you begin, learn about the local market and shop around. Get quotes from different lenders to understand which conditions suit your requirements.
We also recommend speaking with experienced property flippers who have taken out fix-and-flip loans before. Their insight and experience will help you understand the industry better and make the right call for your business. Once you’re ready to go, make sure you refine your plan a tad more. Ask yourself critical questions like:
- Is my plan realistic?
- Can I complete the project within the desired timeline? If not, what changes should I make?
- Should I hire an inspector to detect potential issues?
- Do I have a good contingency and mitigation plan in place?
- Will market conditions affect my flip?
- Is the deal with the investment?
- Do I have the required labor and equipment?
- Have I explored all my loan options?
Once you’re aware of exactly what you’re getting yourself into and how you plan to complete the project successfully, it’s all systems go.
Ready to kick-start your upcoming fix-and-flip project? If you’re looking for fix and flip financing, InstaLend should be your first stop. As an experienced private lending company, we provide a loan commitment the same day and close within days. ss
We also provide rental loans, bridge loans, and new construction loans. Thank you for trusting InstaLend with your goals. It’s time to help you achieve them with the right financing plan. Let’s begin!