Just as the subject says, Ive been a buy and hold investor but am looking at getting into doing some flips and I'm curious about the lending options for this. Any other info on flipping would be helpful if your willing to dish it out.
There's a big hard money lender here in Tulsa, their level of service is quite excellent, but there is a larger price tag on that.
I know of some people flipping houses and BRRRRR'ing using the hard/private.
There are a ton of local banks that offer construction loans.
I moved from Tulsa to OKC a couple months ago and work with a real estate investment brokerage here. We don't operate in Tulsa at the moment but a hard-money lender that is a sister company operates all over the state. I can connect you with them if you like! just let me know.
There are a multitude of lenders out there that would be able to assist with your upcoming projects. A few things to keep in mind when doing your research on lenders:
- Do they lend in your state, and are the local or national? When dealing with local lenders, it might be easier for the lender to get comfortable with "outside-of-the-credit-box" situations given their intimate knowledge of the neighborhoods in your town, but when working with a national lender they tend to move faster and have more streamlined processes since they're lending tens or hundreds of millions a month across the country and specialize in real estate investment lending.
- What is your level of experience? Most of the big lenders out there will determine the terms they can offer you based on the number of completed projects you've exited, and some will give credit for buy and hold, others do not. Find several lenders that lend in your state and then determine which will give you the best rates for your property.
- Size of the loan - most lenders have minimum loan amounts to ensure the transaction is mutually beneficial. I'm unsure what price point you're targeting, but if the property is under $75,000 then you're limited to a few national lenders, if you're taking the national route.
- Timeline - are you looking for a 12m term, a 9m term or a 3 year term? Several lenders offer 12m terms as the standard timeline, but there are others that will offer you the 9m term with a 3m extension at a cost. Be mindful of the work you're putting into the property and the local permitting timelines for such, as well as whether you'll need an architect to draw up your plans for submission, which can add to the timeline. I recommend a 12m term at a minimum until you're more comfortable with the ins and outs of construction.
- LTVs - for someone who has not completed a lot of flips, you will likely be capped at 65-70% of ARV LTV, which includes the rehab holdback. Be prepared to come in with 20% down and closing costs (vary by state and region, but it's wise to allocate $4-10k depending on the size of your loan to account for lender points), and be pleasantly surprised if you don't need that much. Expectations are everything.
Feel free to message me for more insights and if you're in need of assistance finding a lender for your deal, I'd love to help. Happy investing!
I also live in Tulsa and curious who your referring to. I’m currently on my second project but working to start my 3rd before finishing this project. I’ve always lived in the houses that I am renovating and used my VA loan. Since I am living in this house still and will be for a few years I am looking for private/hard money to assist in my next project.
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