Fix and Flip Loans for Investors

fix and flip loans for investors

Whether you are an experienced real estate investor or stepping into the world of house flipping for the first time, this post will give you all the details about the various types for fix and flip loans available out there.

Getting the capital to buy and flip houses is a long-standing challenge for countless real estate investors. Especially when they’re undergoing rough financial patches, experiencing liquidity issues, or don’t have much time to lock down a deal.  

Fix and flip loans for investors were introduced to solve all such woes.

These loans are not only great for accumulating capital, they are also suitable for investors with bad credit scores or history. But at DFW Specialty Lending, we believe everyone deserves a chance to thrive and succeed. So, if you do not wish to lose out on the massive profit potential of the house flipping industry then you need not look far.

4 Popular Fix and Flip Loans for Investors

Although there are several means to finance a fix and flip project, below we have listed some of the most popular options for your convenience.

1. Personal Loans

If you have relatively good credit and don’t need to borrow huge sums of capital then getting a personal fix and flip loan might be a good option. To get a personal loan, you’ll only have to fill a straightforward application. The interest rates are competitive and fast cash service is available.

In addition, since many of these loans come with a “zero prepayment penalty”, you can even pay them off before the term ends without any penalty.

Why you should get a personal loan for property flipping:

  • Fast cash service availability  
  • Competitive rates
  • Quick application process
  • High flexibility
  • Lower monthly payments
  • No collaterals
  • No prepayment penalties

Why you shouldn’t get a personal loan for property flipping: 

  • Small loan amounts (less than $50,000)
  • Short payment cycles (3 to 7 years on average)

2. Private Lending

Widely known as “Other People’s Money” or OPM, private lending refers to the act of borrowing capital from private investors to finance fix and flip projects. Private lenders such as engineers, doctors, lawyers, and even other real estate proprietors might be interested in investing in a good fix and flip deal.

Since private fix and flip loans depend more on one-on-one or peer-to-peer networks, there are usually no formal applications or qualifications needed. Similarly, the loan amount can vary and if you’re lucky, you may even be able to finance the entire cost of your flipping project.

Why you should get a private loan for property flipping:

  • “No money down” loan term opportunities
  • No formal application or qualifications needed
  • Large loan amount potential
  • High flexibility

Why you shouldn’t get a private loan for property flipping: 

  • Higher interest rates
  • Short payment cycles 

3. Hard Money Loans

The only thing intimidating about this fix and flip loan is its name. In times of a financial crunch, hard money lenders and loans might seem like a blessing in disguise, especially when they are facing credit issues.  These loans generally have short payment cycles and do not require high credit scores for approval. In addition to this, no personal collaterals are also needed since the lender collateralizes the property you’re flipping and not the one you own already.

Why you should get a hard money loan for property flipping:

  • Fast cash service availability  
  • Great for distressed properties
  • Suitable for lower credit score investors
  • No personal collateral required

Why you shouldn’t get a hard money loan for property flipping: 

  • Higher interest
  • Short payment cycles (12 to 18 months typically)

4. Family/Friends Loans

If have good terms with affluent friends or family who might be interested in investing in a property flipping project, then this financing option might be one of the best for you. You can help these investors to earn profits on their hard-earned money that’s doing no good in a savings account. And likewise, they can fund your next flipping venture. Out of all the options shared, this one is perhaps the easiest to facilitate (considering you’re on good terms). Additionally, it may also let you negotiate the best loan terms you’ll ever likely get.

Why you should get a friends/family loan for property flipping:

  • Excellent loan terms
  • Low interest rates
  • No formal application or qualifications needed
  • Large loan amount potential
  • High flexibility
  • Fast cash availability

Why you shouldn’t get a friends/family loan for property flipping: 

  • Personal relationships are at risk of damage
  • Taxable loans

NOTE: There are numerous other means to fund your home flipping projects; however, it’s worth noting that every option comes with its own set of benefits and shortcomings. As long as you closely review your situation and avoid getting the help that you can’t afford, there are always ways to venture into the house-flipping industry and earn profits.

DFW Specialty Lending: Offering Quick Fix and Flip Loans for Investors  

Being rejected for a loan due to poor credit history or a bad score can be frustrating, especially when an amazing property flipping opportunity is knocking on the door. An opportunity that can help you make lots and lots of dollars. If you’re rocking the same boat we just talked about, we have good news for you.

DFW Specialty Lending offers a range of quick and easy-to-access fix and flip loans for investors, even if they have poor credit history or scores since the loans are based on the asset’s value. So, don’t waste any more time running after traditional banks to lock down your next fix and flip deal.

Contact our experts today to understand the ins and outs of the various home flipping loans available to you, and more importantly, to decide which option is the most lucrative for you in the long run.

As long as you fulfill our lending criteria, we will get you the capital you need to finance your ventures and succeed.

If you’re searching for more informative articles on fix and flip loans, do give the rest of our blog section a look. DFW Specialty Lending company endeavors to make sure every client is equipped with the necessary knowledge to decide what’s best for them.