Investor · Merrillville, IN · Member since 2014 · 3 posts · 0 votes
Looking to do my first fix-n-flip. Although this is the first in my portfolio, we have ran a successful roofing and remodeling company for years, so my team is already in place and we are very familiar with this aspect of flipping. My problem is finding reasonable terms with a HML or any other lender in our area (Chicago suburbs). We've already identified a couple of deals, but I'm getting terms like 30% down, plus fees, 13% interest for 12 months. This seems to go against everything I've read in the forums, researched through Scotsman Guide, etc. Credit is excellent - 793. Good income. Cash on hand of approx. $50,000. Of course, I'm looking to not use all of my cash; with our experience in remodeling, credit rating and income is there any lender servicing Chicago-land that offers more reasonable terms? Or, does this not exist in the area?
Investor · Merrillville, IN · Member since 2014 · 3 posts · 0 votes
9y
The area (near western suburbs of Chicago) is a quick seller and similar homes sell between $165-$180. This one needs minimal updates (paint, refinish existing hardwood floors, update kitchen cabinets (small kitchen, which is customary to area)). Picking up for $115, max rehab cost is $20k. Will be done with work in 2 weeks (again very minimal work to do, house was well cared for). Only property I own now is my home.
Looking to do my first fix-n-flip. Although this is the first in my portfolio, \is there any lender servicing Chicago-land that offers more reasonable terms? Or, does this not exist in the area?
First off don't limit your search for lenders to Chicago-land. There are some National Lenders (even some local ones) that you may be able to find with better terms. Your challenge though is even though you have experience as a contractor, it would still be your 1st flip. Doing the contracting work on a property is only one part of flipping. The other important parts of the process is buying the property at the right price & then eventually selling for a profit. There are lenders who love working with contractors & will provide preferred rates, but they will want to see you complete 3 or more projects before getting those rates. When I say complete that means selling the projects for a profit.
Lender · Bethesda MD · Member since 2017 · 283 posts · 123 votes
9y
Please PM me or send me an email so that I can compete. 13% is almost our max and your credit score is a beautiful thing. If you already have a completed application we can use that to give you a pre qualification letter with our rates.
Like Crystal said above, there are any number of reputable lenders and brokers that can help you. The terms should be about 10 to 20% down on the purchase and 100% of the rehab should be paid out in draws from an escrow account. More than likely 20% when it all shakes out from underwriting. Rates are anywhere from the 8's to 12 interest only and no more than 4 points.
Hope this helps. PM me if you need additional information.