Bad Credit Fix and Flip Loans

bad credit fix and flip loans

In times of a financial crunch, bad credit fix and flip loans may seem like a blessing in disguise, especially when you’re short on time or are facing credit issues. But before you take the big step, there are things you should know about this loan option available for house flipping.  

Fix and flip loans can indeed play a huge role for house flippers on the hunt for startup capital. It is true that you do not need a loaded bank account to venture into this business. But often house flippers are denied loans especially those with credit issues. This is where bad credit fix and flip loans can come handy. According to CNBC, home prices in the US are expected to rise further regardless of increasing mortgage rates, bestowing tons of profit potential in the house flipping industry.

So, whether you are a seasoned real estate investor or trying your luck in the house flipping venture for the first time, DFW Specialty Lending shares some of the most important things anyone interested in bad credit fix and flip loans should know about. 

So, without further ado, let’s begin. 

What Are Fix and Flip Loans?

Fix and flip loans (a.k.a. rehab loans) are excellent tools for short-term financing that allow a real estate investor to accumulate needed capital to buy, renovate, and resell a property for profit.

These loans give investors access to capital in matter of mere days instead of weeks or months. When it comes to fix and flip loans, it is all about speed – the quicker you renovate the property, the quicker the flip and greater the rewards. Real estate investors wanting to swiftly get in and out can use private lending options to lock otherwise unattainable deals by securing needed capital to “fix” the property.

Investors following a fix and flip strategy are continuously in search for the next deal. And frankly, that next deal won’t wait for you to complete your current project. With a private lender like DFW Specialty Lending, investors can leverage their capital and ensure the next project is already in line.

Fix and Flip Loans Process

Fix and flip loans follow a unique and expedient process towards securing approval – typically within 8 to 10 days – and emphasizes solely on the asset itself. Investors can secure capital for buying, permit charges, closing expenses, , and renovation all in one credit. This process is generally called asset-based underwriting.

In asset-based underwriting, instead of focusing on the borrower or his/her credit, the application process focuses on the asset itself. Put simply, loans for flipping property’s or multifamily projects can be accessible for investors with limited credit history or poor credit score.

Asset-based loans are an extremely helpful tool for real estate investors since the creditors evaluate the property first instead of concentrating on the borrower. Conventional banks and lending institutions may be hesitant in providing loans for flip and fix projects since it’s riskier. Moreover, borrowers with recent bankruptcies and short sales on their credit reports may also be disqualified completely grounded on their credit history.

Fix and Flip Loan Terms & Conditions

Keep in mind, fix and flip loans differ for every borrower as well as for every property. Each property is evaluated on a separate basis by real estate professionals and expert underwriters. Loan terms that are apt for a triple tenant apartment off a busy street are going to vary for an office building in the middle of Dallas.

Nonetheless, a typical real estate investor can expect to receive the following terms and conditions:

  • Funding in at least 1 week
  • Starting interest rate is at 8 percent
  • Loan to value (LTV) is usually up to 90 percent or 100 percent of restoration costs
  • Loan duration begin from 3 months (shorter financing is also usually available)
  • Origination and fees differ by loan and property parameters

Tips to Increase Fix and Flip Loan Success Chances

Although there is no foolproof guarantee that you will get sanctioned for a fix and flip loan, you can adopt certain steps to increase your odds of success. Here are few tips that can help you prepare:

  • Draft a property flipping business plan including important details, such as your objective, industry experience, financial summary, etc.
  • Have a property in mind before applying for the loan along with a well-drafted action plan.
  • Understand the expenses of flipping a property for accurate projections.
  • Improve your credit score to increase your chances for approval.

Bad Credit Fix and Flip Loans by DFW Specialty Lending

If you’re sick and tired of banks rejecting your loan applications due to your credit then fret no more. You’ll be pleased to know that DFW Specialty Lending extends loans based on the value of your assets instead of your credit. We provide bad credit fix and flip loans and as long as meet our lending criteria, we’ll get you the cash you need to succeed.

So, instead of going to conventional banks for your next fix and flip deal, come to DFW Specialty Lending. Our experts will help you understand the ins and outs of the options available to you and guide you to make the most beneficial decision.

If you’re searching for more useful guides on bad credit fix and flip loans, be sure to check the rest of our blog section. DFW Specialty Lending company endeavors to make sure every client is equipped with the necessary knowledge to decide what’s best for them.