First Time Home Flipper Looking to Connect w Lenders

First Time Home Flipper Looking to Connect w Lenders

Member since 2024 · 5 posts · 3 votes

Hey y'all, 

I have approached a point where I have built up more confidence in performing my first house flip in the Charlotte metro region. I currently am a resident here (so distance is non-factor) and I possess some handy skills that could save renovation costs (besides HVAC, structural issues, plumbing, electrical work). I have been exploring viable options as well as doing my due diligence, reading, and research to come into a deal as prepared as possible. 

Currently, a hurdle that I am looking to get over is securing lending that will also have renovation costs built into the actual loan amount. I understand that with traditional mortgages, it is unlikely to receive lending that incorporates speculative renovation costs. Additionally, I understand the risks associated with obtaining hard cash and working with hard money lenders, including higher interest rates due to the short term nature of the loan as well as the risk involved. However, I believe that this would be my most viable option for securing lending. I would be happy to discuss structure and feasibility as well as insight into my personal finances/personal stake into a deal with serious lenders/prospects.

Even if you are reading this post and are not a lender but have valuable insight or experience with flips in Charlotte's market, please don't hesitate reaching out. Any information you are able to pass off is good information to me!

I am looking to connect with any experienced home flippers & Lenders in the Charlotte area, or even just build my network. I am eager to learn the in's and out's of Charlotte residential real estate market as well as gain some experience flipping houses while turning a healthy profit for myself and investors. 

2Reply
36 views

Most Popular Reply

Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
1y

I would connect with local people at meetups, that might give you some contacts for private money. This could be less costly and smaller hurdles than you would have with hard money lenders. For example, I have a private lender that gives me 8-9% on the rate for rehab costs when I am usually getting about 10.25-11.25% on the rehab costs from hard money lenders, and the HML is not sending the full money upfront, but in draws (this is normal for most HML) which is a lot more cumbersome.

Also, there are a lot of hard money lenders out there that you can connect with via google etc. I think you should be paying about 10.5%-12% on average right now, 1-2 points as well, and some lenders will not even need an appraisal.

The McKernan Group4.954 Reviews
See this reply in the discussion

12 Replies

Jump to latestLatest
  • Jay S.Pro Member
    Lender · San Francisco Bay Area · Member since 2019 · 50 posts · 45 votes
    1y

    Hi Michael. Securing Lending shouldn't become a hurdle is the Deal numbers works. 

    Depending upon the Lenders if you qualify, you can get up to 100% in Rehab Financing and/or up to 90% LTV on Purchase Costs. Rehab Loans do not generally care about your DTI or your income. ARV is a very important factor here. 600 FICO is minimum. Feel free to DM if you have any specific questions.

  • Investor · Bergen, NJ · Member since 2011 · 21 posts · 6 votes
    1y

    Hi Michael,


    I've done a few flips in NJ and used a lender once, the others were done in cash. The issue I had was that most lenders required a certain number of completed flips done under a LLC. Otherwise, if the numbers make sense and your credit is good, it should be easy to find a lender. Definitely open an LLC if you haven't done so already and once you have a couple under your belt, you will have lenders lining up for your business. Rates are a bit higher but if you can leverage up to do more than 1 flip at a time, it will be worth paying the lender fees. There are aggressive lenders out there with lower fees for experienced flippers. Good luck!

  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    1y

    I would connect with local people at meetups, that might give you some contacts for private money. This could be less costly and smaller hurdles than you would have with hard money lenders. For example, I have a private lender that gives me 8-9% on the rate for rehab costs when I am usually getting about 10.25-11.25% on the rehab costs from hard money lenders, and the HML is not sending the full money upfront, but in draws (this is normal for most HML) which is a lot more cumbersome.

    Also, there are a lot of hard money lenders out there that you can connect with via google etc. I think you should be paying about 10.5%-12% on average right now, 1-2 points as well, and some lenders will not even need an appraisal.

    The McKernan Group4.954 Reviews
  • Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    1y
    Quote from @Michael Challenger:

    Hey y'all, 

    I have approached a point where I have built up more confidence in performing my first house flip in the Charlotte metro region. I currently am a resident here (so distance is non-factor) and I possess some handy skills that could save renovation costs (besides HVAC, structural issues, plumbing, electrical work). I have been exploring viable options as well as doing my due diligence, reading, and research to come into a deal as prepared as possible. 

    Currently, a hurdle that I am looking to get over is securing lending that will also have renovation costs built into the actual loan amount. I understand that with traditional mortgages, it is unlikely to receive lending that incorporates speculative renovation costs. Additionally, I understand the risks associated with obtaining hard cash and working with hard money lenders, including higher interest rates due to the short term nature of the loan as well as the risk involved. However, I believe that this would be my most viable option for securing lending. I would be happy to discuss structure and feasibility as well as insight into my personal finances/personal stake into a deal with serious lenders/prospects.

    Even if you are reading this post and are not a lender but have valuable insight or experience with flips in Charlotte's market, please don't hesitate reaching out. Any information you are able to pass off is good information to me!

    I am looking to connect with any experienced home flippers & Lenders in the Charlotte area, or even just build my network. I am eager to learn the in's and out's of Charlotte residential real estate market as well as gain some experience flipping houses while turning a healthy profit for myself and investors. 

    May I recommend that you find a local businessman/dentist/doctor to fund your flips? That will serve you far better.
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    1y

    Hey Michael!

    Start with a fix and flip loan - this will include a percentage of the purchase price and usually 100% of the rehab. These loans are short-term as you mentioned, typically 12 months, so you'll need to refinance before that balloon comes due. A debt service loan is popular for that step. Requirements/terms for both will vary from lender to lender. Happy to chat if you'd like to connect! 

    Brittany Minocchi - Barrett Financial Group, LLC522 Reviews
    View Page
  • Member since 2025 · 1 post · 0 votes
    1y

    Hey Michael,

    There are some great suggestions given in this post. I believe meeting local might be one of the easiest things you can do. At least you confirm the people are real. There is a REIA meeting in Charlotte tomorrow on the 7th at 6:30pm. Go look it up on the Charlotte REIA events page.

  • Lender · Los Angeles, CA · Member since 2015 · 35 posts · 21 votes
    1y

    @Michael Challenger glad you are making the BIG step and starting your 1st flip. Your scenario is unique in that you are a 1st time flipper and you live/want to do this flip in NC. After funding 2,000+ loans across the country I know most lenders will have issues with these 2 things. NC has many licensing restrictions so many lenders won't touch the state or require the partnering LO or broker to be licenced there. There are still a few that will give you a loan but the traditional 90% of purchase price and 100% of rehab might not be possible without an exception. You might be somewhere in the 85% of purchase range without an exception. 

    If I knew more about your scenario I could give you better feedback but most lenders see MORE risk with 1st time investors and lower their leverage. Feel free to reach out with any questions. Always here to help. Wishing you great success on your 1st flip! 

  • Lender · Chicago, IL · Member since 2017 · 107 posts · 34 votes
    1y

    @Michael Challenger, congrats and welcome to the world of REI!

    I'm an investor and also a licensed mortgage broker. I've self-financed deals my deals, financed them with a HELOC and used third party lenders as well. In addition, I've helped many other investors finance their deals as a mortgage broker.

    I'm happy to share my experience as both an investor and lender. Feel free to call or DM me. By the way, my company can likely finance your deal with 10% down on the purchase (90% LTV) and 100% financing of the renovations. We have a single flat fee of $1,500 for all of our fees, including the appraisal/valuation. Best wishes on your new opportunity!

    Jeff

  • Member since 2024 · 5 posts · 3 votes
    1y
    Quote from @Gene K.:

    Hi Michael,


    I've done a few flips in NJ and used a lender once, the others were done in cash. The issue I had was that most lenders required a certain number of completed flips done under a LLC. Otherwise, if the numbers make sense and your credit is good, it should be easy to find a lender. Definitely open an LLC if you haven't done so already and once you have a couple under your belt, you will have lenders lining up for your business. Rates are a bit higher but if you can leverage up to do more than 1 flip at a time, it will be worth paying the lender fees. There are aggressive lenders out there with lower fees for experienced flippers. Good luck!


     Hey Gene,

    Thanks for the valuable insight. When completing these deals with cash vs HML, was this cash that was rallied through family and friends, or accumulated through previous flips?


    The single biggest issue in my way currently is obtaining enough cash, whether it be my own, or through partnerships or family/friend-based lending (which I am very hesitant about to begin with as this could potentially strain relationships unnecessarily when money is involved). I have been exploring gigs and hustles to build capital in addition to my 9-5 towards a property, but the growth is not moving at the pace that I would like it to. 

    • Investor · Bergen, NJ · Member since 2011 · 21 posts · 6 votes
      1y

      @Michael Challenger I scraped all the cash I could find and borrowed from family. It was a risk but thankfully paid off for me. If I wasn't able to get the cash together, using a private lender would've been a good option. Despite paying fees, doing a deal and making some profit is better than sitting on the sidelines. 

  • Member since 2024 · 5 posts · 3 votes
    1y

    Agreed, I share the same mentality. Even if I am to not be taking home the lion's share of initial deals, I'd like to still be building some capital for future dealings.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.