Real estate investors use fix-and-flip loans to purchase property, then renovate it to sell for a profit. Fix-and-flip loans are a type of bridge loan that typically includes the purchase of property along with the costs of renovating.

If you would like to discuss fix-and-flip loan options with a qualified broker, the team at POM (Peace of Mind) Capital & Funding Services have the knowledge and experience to guide you through every step of the process.

Advantages of Fix & Flip Loans

There are many advantages to securing a fix-and-flip loan over other types of loans. Fix-and-flip loans are tailored to your specific investment strategy. Some of the advantages include:

  • Securing quick financing
  • Flexible terms that work for you
  • Interest-only payments with low monthly costs
  • Financing through an entity will protect your other assets
  • Loans are underwritten based on the investment, not personal income

Working with an experienced broker will help you keep interest rates to a minimum. While fix-and-flip loans have benefits, the loans tend to be short term. The brokers at POM Capital & Funding Services know how to create a loan that works for you.

The Purchase

Investors find off market deals that can be bought at discount rates to market values. These properties may need minimal repairs or more extensive renovations that most buyers would avoid having to take on themselves. A fix-and-flip loan will cover the costs of purchasing the property and renovations, whereas a typical mortgage would only cover the cost of purchasing the property. Typical mortgages are significantly longer, typically 30 years or more, although they do tend to have lower interest rates. The purchasing process includes:

  • Complete the application
  • Provide documentation
  • Order an appraisal
  • Provide a business plan, including renovation project
  • Close on the purchase with a down payment

The Renovation Process

Most fix-and-flip loans require the purchaser to front the initial investment to buy materials and pay contractors. After, you can request a construction draw from your lender which will reimburse the costs of renovations. A certified inspector will need to approve the work and send an inspection report to your lender. Once that is complete, the lender will release the reimbursement funds.

We Can Help

At the POM Capital & Funding Services, we can schedule a consultation to learn more about your options and what to expect when investing in a fix-and-flip loan. Coming prepared with the right financial documents will help your broker become familiar with your circumstances to get you the best loan possible.

If you would like to discuss your fix-and-flip loan options with an experienced broker, call us at 631-354-9290 or write to us at [email protected] to schedule a free consultation with our team.

POM Capital & Funding Services is a leading provider of alternative funding solutions for businesses of all types and sizes, offering commercial finance solutions and products to businesses in the Centerport, New York area and throughout the state of New York.