Why We Love Fix & Flip Loans (And You Should Too!)

Fix and flip loans are short-term loans specifically designed for real estate investors who are looking to purchase, renovate, and sell a property within a year. In this blog post, we're going to tell you everything you need to know about fix and flip loans—including why we think they're a great option for financing your next real estate investment.

What Is A Fix & Flip Loan?

A fix-and-flip loan is a type of short-term loan that gives real estate investors the capital they need to purchase, renovate, and sell a property—usually within a year. Because they're short-term loans, fix and flip loans typically have higher interest rates than traditional mortgages. However, they also come with some big benefits:

You Don't Need A Lot Of Cash

There are a lot of things that can hold people back from becoming real estate investors. One of the biggest is the down payment. With traditional mortgages, you typically need to put down 20% of the purchase price. That can be a lot of money, especially if you're buying an expensive property. But with a fix and flip loan, you could potentially put down as little as 10%. That means you'll have more cash available to put toward the renovations. And if you're smart about your projects, you could see a healthy return on your investment. So if you've been thinking about getting into real estate but have been held back by the down payment issue, a fix-and-flip loan could be the perfect solution for you.

You Can Get The Money Quickly

Another big advantage of fix and flip loans is that you can get the money quickly—in some cases, as quickly as 48 hours after applying. That's because these types of loans are typically funded by private lenders rather than banks or other financial institutions. So if you're looking for a fast and easy way to finance your next real estate investment, a fix-and-flip loan could be just what you need. Of course, you'll need to make sure you have a solid plan in place for how you're going to use the loan proceeds, as well as a realistic timeline for repaying the loan. But if you're prepared and you've done your homework, a fix-and-flip loan can be an excellent way to finance your next real estate project.

You Have Flexible Repayment Options

Most lenders will allow you to make interest-only payments on the loan for the first six months or so. This can be helpful if you need some extra time to get your project up and running before you start making full payments. And at the end of the loan, you can typically choose to either pay off the entire amount at once or refinance it into a traditional mortgage. That gives you some extra flexibility and could make it easier for you to manage your cash flow.

You Can Get A Bigger Loan Amount

Finally, one of the biggest advantages of fix and flip loans is that you can often get larger loan amounts than you would with a traditional mortgage. This can be especially helpful for real estate investors who are trying to purchase or renovate multiple properties at once. With a bigger loan amount, you'll have more money available to cover your upfront costs and complete your projects.

If you're thinking about financing your next real estate investment, we highly recommend considering a fix and flip loan. These short-term loans come with some big advantages—including the potential to get approved with bad credit, not needing a lot of cash on hand to qualify, and getting the money quickly—that make them an attractive option for many real estate investors. Just make sure you do your research and shop around to find the best rates and terms for your needs. Good luck!