fix and flip investor and or financing advice

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fix and flip investor and or financing advice

Marc Foster
Member since 2025 · 3 posts · 2 votes

New to fix and flip despite 28 years as a GC in residential and commercial construction.  Have a property under contract. Not sure if I'll be able to get financing. Have some cash, good credit , all the experience. Can anyone give me some advice? Thanks !

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y

    Hey Marc, 

    I would suggest interviewing a few qualified hard money lenders. Make sure they have a track record of closing deals on time and a good reputation. 

    It seems like you should not find much difficulty based on your post. Is the property in a rural area? Is it a commercial deal? What would lead you to doubt your financing ability? 

    [email protected]818-269-7983
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  • Marc Foster
    OP
    Member since 2025 · 3 posts · 2 votes
    1y

    Thanks for the response. The property is in a great location in Charlotte nc. Seems that the condition that it's in is undesireable because it's already been worked on by a previous contractor. Even though it's a rehab it's being looked at as new construction which is not correct. Very frustrating because the deal is a very good deal. Thanks for the advice, I'll reach out to a few more hard money people.

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    1y

    Please don’t take this wrong, @Marc Foster.  We’ve fallen into the trap of making loans to contractors with decades of construction experience but no flipping experience. Never again. I know you’re thinking otherwise, but because you can no doubt build or remodel a home cost-effectively, and I bet with your eyes closed, it doesn’t mean you also have the vision to flip a house. Protect yourself. Humility is the name of the game.

    Many of the long-time, battle-hardened rehabbers we’ve been doing business with for years are wise enough to bring designers in before they even draw up plans or start construction. They realize that the designs they’ve been using for years are now obsolete and out of date.

    Similarly, valuing a flip is always an art. It includes a construction cost component that you probably understand, and much else that you might not be used to, including ARV determination.

    Our background with experienced contractors is that they are great at construction but not design and most think that because of their experience, they understand everything. They don’t. End buyers don’t care what went into the project – your forte. Design and price are near the top of what sells homes.

    No offense, but anymore, we would consider you a newbie. Nonetheless, I have no doubt that you’ll find money. Just don’t think that because of your related, but not direct, experience your project is a slam dunk. Please understand that I’m not trying to be cynical, but helpful, based on our real-world experiences.

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  • Patrick Roberts
    Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    Ideally, have more than one exit strategy in place before closing. If the only exit path is "the property has to sell for X before Y date," you could get trapped. A lot of fix and flip loans are going bad right for this very reason. Identify whether the property would work as a rental and whether you and it could qualify for permanent financing for a rental prior to closing. 

    Do you know why the property is still distressed despite previous work and is being considered new construction? This is a red flag to me. Id do some serious research on this to see what's up. Make sure there isnt something wrong with title, permitting, or whatever. 

    Lastly, the ARV and the target market segment will have a big impact on how you proceed with the rehab. Rehabbing for a C neighborhood starter home or LTR is very different from rehabbing a luxury home in an A neighborhood. @Jeff S. covered this in his comment. Might be worth a consult with a local experienced realtor to get some input on what works and doesnt for that area and neighborhood. 

    Hard money/RTL will likely work for this deal if you can put 20% down on the purchase and still have some reserves.

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  • Cam SchwartzBusiness Member
    Lender · Chicago, IL · Member since 2024 · 102 posts · 48 votes
    1y
    Quote from @Marc Foster:

    New to fix and flip despite 28 years as a GC in residential and commercial construction.  Have a property under contract. Not sure if I'll be able to get financing. Have some cash, good credit , all the experience. Can anyone give me some advice? Thanks !


    Hi Marc, happy to provide advice where you have specific questions.

    Financing options and their qualifications will vary by lender and product. I recommend considering hard money options as they typically have the most lenient requirements, offer high leverage and can move quickly.

    Give me a call if I can be more helpful with specifics.

    [email protected]847-702-6940
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  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes
    1y

    Good credit, a GC license, the cash to close, and a deal that makes sense.  if you check all those boxes, the financing is simple.

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