What are all of my options for financing a fix and flip project?

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Yes, the bridge loan with rehab or fix n flip loans are a popular product for investors. They include money to acquire and money to fix it up. They are short term loans (6 - 18 months), interest only payments with a balloon payment at the end but these loans are designed to get in and out as fast as you can either by sale or refi.All local and national lenders have a Fix n Flip program. These programs come with:Origination fee: variesService/Admin fees: variesInterest Rate: 10.99% - 12%Term: 6mo - 18moWhat you really wanna do is figure out what your buy box is given your capital. I can tell you that I lined up 22 deals for my investment group last 5 months. The cheapest lifecycle for any deal has been like 23k, the most expensive life cycle has been 48kThe lifecycle includes:DownpaymentClosing CostsInsuranceHolding costs of loanUtilities and taxes at property until you sell/refiDownpayment to contractor to start workLike I said, the cheapest life cycle I've seen so far was 23k and that was for a deal with numbers of:60k purchase60k rehab170k ARVSo, you can imagine when you step it up and are buying distressed houses at 150k/200k and putting 100k+ into them the liquidity needed to survive the projects life cycle will increase dramatically.And as a rule of thumb, if a project can require a 80% - 100% cash on cash return in 150 days or less close to close then it is a good deal.So if the project life cycle costs you 30k, you want to net 30k as a return. You do that 4x per year and now you have something.

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Plenty of options but the major groups of financing include HML' PML, self financing, HELOC from your primary residence, going in with a partner where they provide funds and you provide the oversight / management, financing through a local lender (depending on your relationship, you might find a local bank that will finance a portion of the amount). You asked if HMLs will roll renovation costs into the loan and the answer is yes but unless you have experience and a track record, they will want skin (your skin) in the game. Shop around and ask what they are willing to do but be aware of ALL of the costs associated with a HML as they can add up quickly (upfront costs, application cost, appraisal cost, overage costs . . . be 100% sure of all the costs when you compare HML A against HML B). Be happy to give you pros and cons of each as we have been down the road with most options over the years on various projects.

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@Peyton LaBarberaWe do 20 Flips/BRRRRs per year in Jacksonville FL and we fund with a combination of Hard Money and Private Money.Hard Money will fund 90% of the purchase price and 100% of the rehab on a draw schedule.Our Private investors will fund the remaining 10% of the purchase price, the first portion of the rehab (to be drawn later from the HML), and the holding costs.

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THIS IS THE WAY haha

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Thx Peyton. I learned the hard way about the full costs of a RE deal, I figure I'd share my findings withh those who are trying to figure out capital requirements.

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@Peyton LaBarbera I think some of the most popular options are your own funds, other people's money via friends and family or a PML, HELOC or Hard Money.

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Here is how most work: Rates: 10% to 14% (Most Deals are 12%) Terms: 1 Day - 24 Months (Most Deals are 6 months) Fees: 2-5 points(%) of loan amount paid at closing (Most Deals are 3 points(%)) Minimum Loan Amount: $50,000 (For loans less than $200,000 we charge $2,500 minimum) Max Loan: 65% of After Repair Value(ARV) 100% Rehab Financing Available (Require 20% of purchase price down payment or cross-collateral) Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 10 business days) We have private lending partners throughout the entire United States that cover the following states: AL, AZ, AR, CA, CO, CT, DE, FL, GA, HI, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, OH, OK, OR, PA, RI, TN, TX, UT, VT, VA, WA, WV, WI, WY. NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

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I am sure that my response will get flack from those that are doing 20+ flips a month or have PMLs that throw funds at them but we pick and choose the projects we take on and are not in markets where flips are selling for $500K+.The HML route is one we use when we are confident (barring any wild reason which we have done well avoiding) in completing on schedule and where we under estimate the market at sales time and still are making a good profit. If we get done sooner or it sells for more / faster great but we are not banking on the best and hoping against the worst. Especially now with HML rates as high as they are, the carrying costs combined with the initiation costs can eat up most of your profits especially if you have to extend the loan and pay even more.The self-financing option has been our primary funding source since we built up a war chest from past flips but starting out it would not have worked. We started looking for the sleeper deals and yes they are out there and even on market - 3 of or first 4 were on-market deals that no one wanted but turned out to be amazing at the end that sold in the first week over list and that gave us funds for the next ones.PMLs have not been a source we have used . . . reluctant to tap friends and family and then hope things do not go south as they can - unless you want to alienate them, you will force yourself to find money to pay them back which will be an expensive lesson.Hope this helps

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There are so many options and programs , and they change often depending on the Lender. Im in the business and have a brokerage in Miami for residential and commercial. I have access to over 100 lenders and could place you with the right one for your fix and flip.

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Thats's the goal is to make as little mistakes as I can before buying anything but like anything you are always bound to make a mistake here and there. If I didn't make any small mistakes on my first deal I would be worried that I was part robot, thanks again Mike.