Fix And Flip Financing
8 Replies
Tyler Lance
Rental Property Investor from Saint Louis, MO
posted almost 2 years ago
Hello all,
Pretty new to the real estate investing world and I'm here to absorb as much information as possible! The wife and I are currently house hacking and are looking to do a couple flips to start out to get some cash flow to put down on other rental properties. That being said, I am curious to know everyone's thoughts on a fix and flip line of credit(specifically from Oracle Loans if anyone has used them?) and how they worked or how their experience was with them?
Thanks in advance for the help!
Shawn Ward
Real Estate Investor & Consultant from Los Angeles, CA
replied almost 2 years ago
@Tyler Lance I've never worked with Oracle, but I have a few HMLers that I've worked with that I'd recommend to you if you DM me.
Thanks,
sjw
Diana Muresan
Lender from Chicago, IL
replied almost 2 years ago
@Tyler Lance there are also renovation loans, 203k FHA for owner occupied and FannieMae for both conventional and investment
Tyler Lance
Rental Property Investor from Saint Louis, MO
replied almost 2 years ago
@Diana Muresan Yes these are good options but we will not be able to occupy the residence during the renovation, eliminating some of the financing options you mention. Thank you!
Diana Muresan
Lender from Chicago, IL
replied almost 2 years ago
@Tyler Lance on both owner occupied or investment, mortgage payments can be rolled into the loan during the renovation since property is inhabitable
Tyler Lance
Rental Property Investor from Saint Louis, MO
replied almost 2 years ago
@Diana Muresan Thank you for the info!
Mike G.
Real Estate Agent from Las Vegas, NV
replied almost 2 years ago
@Diana Muresan this is good news to know. What are the qualifications and stipulations to obtain 203k loan?
Diana Muresan
Lender from Chicago, IL
replied almost 2 years ago
@Mike G. as far as qualifying for the loan is the same as any loan, do example, you find a house of $100k that needs $50k repairs, purchase price becomes $150k, if this is FHA downpayment is 3.5%, you have your GC to estimate the cost on a bid sheet, banks provide the bid sheet, it's just one sheet with itemized labor costs on one side and material costs in the other side. The appraiser will go out and appraise the forecasted value based on the bid sheet, even if the forecasts value comes in lower it's ok, you can go up to 110%. You can choose to roll in the mortgage payments up to 6 months in the loan if property is inhabitable. GC receives 50% of the material costs at closing and the in rest in 3-4 draws. You can refi or sell after the renovation. The pre-approval used to get on contract will be for the $150k
Mike G.
Real Estate Agent from Las Vegas, NV
replied almost 2 years ago
as far as qualifying for the loan is the same as any loan, do example, you find a house of $100k that needs $50k repairs, purchase price becomes $150k, if this is FHA downpayment is 3.5%, you have your GC to estimate the cost on a bid sheet, banks provide the bid sheet, it's just one sheet with itemized labor costs on one side and material costs in the other side. The appraiser will go out and appraise the forecasted value based on the bid sheet, even if the forecasts value comes in lower it's ok, you can go up to 110%. You can choose to roll in the mortgage payments up to 6 months in the loan if property is inhabitable. GC receives 50% of the material costs at closing and the in rest in 3-4 draws. You can refi or sell after the renovation. The pre-approval used to get on contract will be for the $150k
Ok that sounds good I would like to chat with you on PM of phone and discuss further. thank you so much for the great broken down step by step description.