Fix and flip newbie

[James Harryton]

I’m completely new to fix and flip but I have been doing some research, I’ve been looking at distressed properties in my area for example one I’m looking at now the listing price is $359k Arv is $550k the contractor fee would be $33k without materials I’ve been looking at fix and flip loans saying they would finance 90% LTC and 100% rehab . I get the gist of this but not completely sure how it works out also would it be smart to use a private money lender for gap funding in order to come with the capital needed to get approved for the fix and flip funding?

[Mike Klarman]

James, welcome to the Jungle!

359k distressed?  Wow.  That's a high entry point.  

The 90%/100% programs are out there for new investors, I know of 1 maybe 2 that will provide those terms to a new investor given:

Credit is 750+

Appraisal numbers came in fantastic

The zip code the house is in is a favorable one for an exit

I've closed or oversaw the close of 100s of bridge loans, be happy to answer any questions you may have about it.

If your ARV is 550k, that means you want your max project cost to be about 398k (72.5% of ARV), if you buy for 359k that leaves hardly any room at all for rehab costs. It would be a real tight deal where I do not think max terms would even be possible.