An example of a Fix and Flip
This is a great program for real estate investors who want to capitalize on buying and doing rehab work on residential investment properties with minimal down, needing quick responses and quick closings with minimal documentation.
Program Highlights
- Minimum Property Value – $150,000
• Only 10% down payment for Domestic Borrowers – 20% Foreign Nationals
• Minimum Mid Score – 600 of 3 scores- no bankruptcies in 3 years, foreclosures 2 years
• Amortization- fixed Interest only with balloon – principle due in full at closing
• Term – 13 months – no Prepayment Penalty
• Average Appraisal estimated cost – $375 – $400 (depending on the state)
• Property seasoning requirement – none
• Minimum cash on hand $15,000
• Turnaround time 3-4 days close in 7-10 days after Approval
• Rate Range 7.99% – 12%, to 90% LTC, Max 70% ARV – see chart below
• $10,000 Min- No Max
• Draws- no limit as long as requests are reasonable – must be approved
• Lender and broker points will be on the HUD to be paid at closing
• No condos included in the program
Data Requirements
- Borrower Photo ID – enlarged
• Previous year personal tax returns
• Proof of assets – 6 months’ liquid interest only payments
• Last two months’ bank statements
• Business entity docs such as Articles of Organization, Operation Agreement, Certificates of Good Standing
• Detailed Construction budget
• Insurance – 12 months’ builders risk policy
• Purchase Sales Agreement
Fix and Flip Level Chart
| Level | Completed Flips | Origination Fee | Interest Rate | Loan to Cost | Loan to Max | ARV |
| 1 | 0-1 | 3.5% | 12% | 90% | 90% | 70% |
| 2 | 2-4 | 3% | 11% | 90% | 90% | 70% |
| 3 | 5+ | 2% | 9.99% | 90% | 90% | 70% |
| 4 | 10+ | 2% | 7.99% | 90% | 90% | 70% |
Financing Types
- Purchase
• Refinance – Rate & Term and cash out
• Construction
Eligible Property types
- Must be non-owner-occupied
• 1-4 Unit Investment Properties
• Properties less than 2 acres
• Log Homes if common in area
• Properties subject to oil and gas leases
• Minimum gross living area of 700 sf
Notes
- Have completed Flips in last 24 months
• Lenders origination fee will be 2-3.5 % and is split up among properties for multi property loans
• Note that Underwriting may ask for more data depending on the file
• Local Title Company will be chosen by the borrower – must have complete contact info and license to be approved by the lender
• Available to US Citizens, Permanent Residential Aliens, Foreign Nationals
• LLC’s, Limited Partnerships, General partnerships, Corporations, land trusts, maximum 2 borrowers per loan
• All income, credit, bank accounts that are over 60 days must to be updated
• Appraisals must be dated within 180 days of origination
• Inspector site inspection and budget reviews – fee $150.00
• Lender will hold funds for rehab budget in escrow account
• All draw requests are based on approved rehab budget at origin
• Lender Escrow manager reviews and approves all draws prior to disbursement of funds in 2-4 business days
We like to do business “the old fashioned way” by talking to our clients. Please feel free to contact us any time to discuss your situation and your objectives. Thank You!