For borrowers looking to get into property investment, fix and flip loans could pave the way. This investment strategy has surged in popularity as people continue moving from larger cities to suburbs and smaller towns, creating a demand for updated homes.
The appeal of flipping houses isn’t just in its potential to rejuvenate neighborhoods—according to Attom, in 2023, the average ROI for fix and flip projects was 27.5%, with an average gross profit of $66,000 per project. With over 300,000 homes flipped, accounting for 8.1% of all home sales, it’s clear that this strategy is still a significant part of the real estate industry.
If you’re looking to add this program to your Non-QM toolkit–consider this an intro to fix and flip loans and how they offer investors the financial leverage needed for success.
The Basics of Fix and Flip Loans
These loans are for those who want to buy investment properties, fix them, and sell them quickly for a profit. Unlike traditional financing options, fix and flip loans offer quick access to funds and flexibility, both essential for snapping up properties and working on renovations right away.
In the coming years, with potential shifts in interest rates, having access to sufficient capital will be crucial for fix and flip investors to stay competitive. Depending on how interest rates move, investors might start looking more at properties that are easier on the wallet if rates stick around where they’ve been in 2023. Regardless, fix and flip loans are there to help investors make the most of their opportunities.
By tapping into this demand and offering fix and flip loans, you can cater to a broader borrower base—from first-timers just getting started to seasoned flippers looking to grow their business. It’s a smart move that can bring in more clients and build a steady list of repeat borrowers.
An Intro to Fix and Flip Loans by LendSure
At LendSure, we streamline the fix and flip loan process, issuing decisions and term sheets typically in hours, not days. We welcome investors across the board, accommodating credit scores from as low as 660 and focusing on non-owner occupied residential properties, including single-family and multi-family homes up to 4 units. Plus, our financing options are designed with flexibility in mind:
- Purchase Loan Amount – up to 85% of cost, depending on investor experience
- Construction Loan Amount – up to 100% of cost, depending on investor experience
- The total loan amount is up to 85% of the total cost (maximum after repair value LTV 70%)
- 12-month loan term with Interest Only payments
Want to learn more? Go to part 2 and part 3 of our Fix and Flip loan blog series to explore:
- Leveraging Referral Sources for Fix and Flip Loans
- Navigating the Fix and Flip Loan Drawing Process With LendSure
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to benefit from a commonsense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.