Lowest Rate W/ Points OR Higher Rate No Points?

[Tyrell Proby]

When financing your flips, do you focus more on getting the lowest interest rate or avoiding upfront points?

I recently spoke with an investor who takes a 6-month loan at 16% interest with no points because he consistently flips in 3 months or less. Even though the rate is higher, he avoids the 2 points ($4,000 on a $200K loan) that come with lower-rate loans.

By closing out the loan early, he only pays $8,000 in interest versus a lower-rate loan at 10% with 2 points, which would cost him $9,000 total ($5,000 interest + $4,000 points). For those who turn projects fast, does a higher rate with no points make more sense for your deals? Or do you still go for the lowest rate possible?

Let me know what you think.