I have been in the buy and hold market for several years and a business partner and myself are considering flipping a few houses per year. We have done a good bit of research on the topic and it seems that many people are using hard money lenders that charge several points and high interest rates. I have a local bank that I have a good relationship with(many of my rental loans are with them) and they are now offering flip loans and I wanted to see what the more experienced people think about their terms.

15% down payment

5% interest rate

Interest only payments for 12 months

1% origination fee

They will also roll the repairs into the loan

In house appraisal done at the branch(no fee), the house needs to "appraise" for the purchase plus repairs.

The example he gave me was

Purchase price $125k

Repairs $40k

Total $165k

Down payment: $165k x 15% = $24,750

Loan Amt: $140,250

Monthly Payment: $584.38

To me it seems like a no brainer compared to hard money lenders. Has anyone seen or have experience with loans like this?