Fix n flip financing

[Javier Torres]

Here is my situation. 720-ish FICO. $30k cash. Based in Oregon. Looking to begin my journey in fix n flips. I've done research in finding and analyzing properties so I feel somewhat comfortable in that regard.

Here is a sample scenario below of a real property I've done some analysis on. My question is, based on my situation what lenders do you recommend? I tried using this sites "Find a Lender" form, but it stopped me from moving fwd once I didn't meet the 20% down criteria.

Scenario: Bank Owned property at auction

Sales price/offer/bid: $270k

Rehab: $85k

ARV: $500k

Am I barking up the wrong tree going down this path?

[Connor Hibbs]

Hi Javier, the numbers look fine in terms of the purchase price, rehab, and ARV (depending on what kind of work you are doing). The main concern here would be the liquidity that you have for this scenario. Being a first-time investor, you'll likely be closer to 75% or 80% of the purchase price on your first one. Lenders also will typically provide rehab funds in the form of draws where completed work is reimbursed instead of given up front.

Given that you'll want to have closer to 30%+ of the purchase price on hand for starting your first one. Having extra liquidity will also help as you may run into some growing pains as you begin your journey as a flipper.