I’ve been thinking about how many real estate agents come across buyers and investors who find the right property but struggle to secure the financing needed to move forward.
Sometimes it’s not that the buyer doesn’t qualify for anything. They just haven’t explored all their funding options.
I work in business funding, helping business owners and investors explore options like 0% APR business credit cards, business lines of credit, business loans, SBA financing, and revenue-based funding.
I also have access to shelf corporations for situations where an established business entity may be worth considering, depending on the funding requirements.
I’m curious to hear from agents who work with investors, especially fix-and-flippers.
What’s the biggest financing challenge you see your clients running into? Is it having enough capital, qualifying for financing, or getting funded quickly enough to close the deal?
Of your three, it's capital, and usually not the down payment people planned for. Most rehab lenders fund the renovation in draws after the work is done and inspected, so the investor fronts each phase and gets paid back afterward. Add closing costs, interest payments during the rehab and a couple of extra months of carry if the sale runs long, and a buyer who had the down payment covered can still come up short halfway through the project.
Qualifying mostly shows up as leverage. Experience and credit commonly decide how much of the purchase a rehab lender will cover, so a newer flipper brings more cash at closing, which lands them back at the same problem.
A flip is fully funded when the cash for every stage is lined up, not just the cash to close.
Noah, you made a great point, especially about rehab draws. A lot of newer investors focus on having enough money to close without realizing how much working capital they’ll need throughout the renovation.
That's actually one of the reasons I help investors explore additional funding options outside of traditional rehab loans. Depending on their credit profile, business revenue, and qualifications, options like 0% APR business credit cards, business lines of credit, business loans, SBA funding, and revenue-based financing can help provide additional working capital without draining all their reserves.
Revenue-based funding can be especially useful for investors with established businesses generating consistent revenue. SBA financing can also be a great option for eligible businesses looking to expand, although it’s generally not intended for purchasing and flipping investment properties.
I think having access to capital before starting a project can make a huge difference. From your experience, do you see more investors running into trouble during the renovation phase or when unexpected holding costs start adding up?