What’s Your Biggest Challenge Finding Flip-Friendly Funding?

Question

A lot of flippers I talk to say their biggest headache is either slow funding or lenders who don’t understand rehab timelines.

If you’re flipping this year, what’s been your biggest pain point?

James Jones · Answer

For me, the biggest pain point hasn’t been the cost of capital, it’s lenders who don’t actually understand how a real rehab schedule works. A flip is won or lost on speed. If a lender takes 10 days to approve a draw or can’t fund on the timeline your contractor needs, you’re basically financing delays, interest, and change orders.

My best results have come from working with lenders who:
• approve draws in 24–48 hours
• let you submit photos/videos instead of waiting for an inspector
• understand ARV-based lending
• and don’t nickel-and-dime every line item

A cheap lender who slows you down is more expensive than a slightly higher-rate lender who lets you move fast. Speed is the real savings.

Andy Sabisch · Answer

Finding lenders that provide what they promote.  There are more and more lenders that claim to support fast closes, offer competitive rates and terms only to change things to support a close or take far longer than expected which results in lost deals.  It seems that free advertising on social media gives rise to "lenders" that claim to offer 90% to 100% financing with no experience needed at rates in the 7%s but they almost always fail to meet any of the metrics.

We are relocating so our go-to local funding source will no longer be available to us so we will be vetting lenders that can support our needs in the new location.

But false promises is what we are seeing to be the biggest "pain point"