Discover the Best Fix and Flip Loans for Real Estate Investors
Funding a house flip requires understanding various loans that cater specifically to the unique timeline of renovation projects. Finding the right loan means considering several factors including repayment terms, closing time, and eligibility. This guide highlights six of the best fix and flip loan options that offer flexibility and favorable loan-to-cost (LTC) ratios suitable for both novice and seasoned investors.
Comparing Top Fix and Flip Loans
| Loan Provider | Loan Amount | Interest Rate | Repayment Terms | Minimum Credit Score |
|---|---|---|---|---|
| Kiavi | $100,000 – $3 million | Starting at 7.75% | 12, 18, or 24 months | 680 |
| Lima One Capital | $75,000 – $3 million | Starting at 8.45% | 3, 19, or 24 months | 600 |
| RCN Capital | $50,000 – $3 million | Starting at 9.64% | 12-18 months | 660 |
| Flip Funding | $150,000 – $3 million | Starting at 9.99% | 12-24 months | 620 |
| New Silver | $100,000 – $5 million | 9.5 – 11.25% | Up to 18 months | 650 |
| CoreVest Finance | $75,000 – $2 million | Starting at 7.99% | 6-24 months | 620 |
Highlights of Each Loan Provider
Kiavi: Ideal for Fast Funding
With no application fee, fast funding, and competitive interest rates, Kiavi stands out for its efficient application process. It facilitates closing within seven days but does require a minimum credit score of 680 and periodic inspections for funds disbursement.
Lima One Capital: Versatile Options
Lima One Capital offers a flexible loan structure that caters to various types of flipping projects with flexible interest rates starting at 8.45%. It allows you to defer fees until the property sells, making this option well-suited for diverse investment strategies.
RCN Capital: For Seasoned Investors
RCN Capital offers comprehensive financing options for multiple property types without a prepayment penalty. New investors may face higher rates, making this loan more favorable for experienced individuals with multiple flips under their belt.
Flip Funding: Great for Beginners
Offering loans without requiring prior experience, Flip Funding provides a straightforward pathway for newcomers to enter the market. This lender assists foreign nationals as well but is not a direct lender, meaning specific terms may vary based on the matched provider.
New Silver: Innovative AI-Based Solutions
Utilizing AI for expedited underwriting, New Silver can provide funding in as little as five days. Its funding options are suitable for a range of investors, and frequent borrowers can benefit from reduced fees through their Advantage Program.
CoreVest: Tailored for High-Volume Investors
CoreVest specializes in loans for large-scale real estate portfolios, particularly beneficial for investors flipping multiple properties altogether. Its competitive rates make it an attractive option for seasoned professionals focusing on high-volume projects.
Selecting the Right Fix and Flip Loan
Choosing the most suitable fix and flip loan is crucial for the success of your renovation projects. Here are key factors to consider:
- Interest Rates and Fees: Determine the total cost of the loan by factoring in both the interest rate and additional fees.
- Loan Terms: Ensure that the loan terms align with your renovation timeline.
- LTC Ratios: Understand how much of the purchase and renovation costs the loan will cover to anticipate out-of-pocket expenses.
- Time to Funding: Speedy funding is essential to making competitive offers on properties.
- Eligibility Requirements: Know the credit score and experience prerequisites to qualify for your desired loan.
- Reputation of the Lender: Opt for lenders with positive track records and reviews from other investors.
Exploring Different Types of Fix and Flip Financing
While the loans discussed are primarily hard money options, other financing avenues for house flipping include:
- Private Money Loans: Funding from personal connections or investors.
- Home Equity Loans or HELOC: Loans based on the equity available in your primary residence.
- Bridge Loans: Temporary loans closing the gap between purchasing a new home and selling an old one.
- Construction Loans: Designed for new builds, covering purchase and construction costs.
- Cash-Out Refinance Loans: Leveraging home equity for investment purposes.
Conclusion
Understanding the various fix and flip loans available is essential for maximizing the potential returns on real estate investments. By assessing your individual project needs against each loan option’s features and terms, you can select the most advantageous financing strategy for your next venture.
