Updated over 8 years ago on . Most recent reply
Creative Financing for Fix and Flip
Preparing for a new fix and flip project in Chicago and wonder if anyone has found success in financing a project with 100% OPM (purchase and reno)? If so, how did you connect with your lenders? Did your lender require a specific Loan to ARV ratio? Average interest %? What creative financing terms worked well for you?
Some I've considered:
1. Interest payments plus % of profit after sale
2. Points plus interest payments
I'm looking to this route to get started and build some reserves so I can pursue less costly funding options. Unfortunately, tapping family isn't an option and no HELOC or self directed IRA to tap either. In Chicago, not many sellers willing to finance either so looking to other options.
I've been working this direction for a while now but recently got an unexpected nudge to take action. So, Im taking action!
Most Popular Reply
Our own money is tied up in a flip in Chicago right now, so we joined a funding network where it is 100%Purchase and Rehab but you split the profits. You can check out Keystone Funding Network. Some people were skeptical of it on BP awhile back, I read the entire forum and reached out to @Jason Harlin who has done a couple deals with them already. We joined after I talked with him and verified it's legitimacy....
Requirements are less than $600k ARV, the loan has to be less than 65% of the ARV, and rehab cannot cost more than the purchase. They also need more time in the contract so they can have it inspected themselves and everything.
Good luck!