Non-Conventional Financing Fix & Flips

[William Burns]

I have been seeing more opportunities for fix and flips lately. When it comes to financing a flipper home it can be tough. Does anyone have a source for hardmoney or some type of house flipping loan they would recommend?

I have reached out to KIAVI and was denied from their process due to lack of credit history. Normal Conventional loans do not support these types of projects because of the conditions of the homes. 

I have enough capital to finance the upgrades needed & to put 20% down on these home. Also I would be able to comfortably pay a monthly "mortgage" for a 12 month loan as well, while the project is rolling. 

What are some of your recommendations for financing when you do not have 100% of the cash on hand for a deal? 

[Carlos Valencia]

Hello William, 

When it comes to flipping properties Hard money is the best option and maybe a 203k loan which is a rehab type loan but its owner occupied. Hard money is best to use in order to win the deal. For hard money loans they only look at your credit score and assets and the property to in regards to purchase price plus repair cost and look for the after repair value. If the Hard money lender thinks the deal is profitable they will most likely fund it. You will also need to bring in 25% down and have 6 to 12 months reserves. If you are a new investor the interest rates will be in 13s and its only interest only payment, but once you start gaining experience then the hard money lender will give you better terms assuming your previous projects were good projects. Just make sure you inform yourself on how hard money works for flipping and be ready to move fast on your project as you will have limited time to finish your project before the note is due. 

@Albert Bui @Matthew Kwan