Fast Close Fix and Flip Loans – Be Prepared

December 11, 2023

FBC Funding offers fast close fix and flip loans. These programs allow the borrower to close in 10 days or less. The two options for a fast close fix and flip loan is to have completed 5 flips in the last 2 years or to qualify for the no appraisal program. If you do not qualify for the fast close fix and flip loan you can still ensure your loan closes quickly. This is what you do to ensure you have a fast close fix and flip loan.

Fast Close Fix and Flip Loans: Borrower Be Prepared – ID

Every Lender will verify who you are.

If you are closing as and Limited Liability Company you will need these documents.

Articles of Organization: the original documents you received from the state when you filed to start your LLC
Operating Agreement: this document spells out who are the members and managers of the LLC and what authority these individuals have. Specifically the power to borrow money in the name of and obligating the LLC.
Certificate of Good Standing: Not all programs require this but when they do they must be within 90 days of closing the loan.
EIN Certification. Tax Identification number as presented on the SS4 form from the IRS. This form is required in all programs.
Foreign entity Registration. If your entity was formed outside of the state you are investing in, you may be required to register your company. This registration, needs to be renewed annually.

If you are closing as a corporation you will need these documents.

Articles of Incorporation: the original documents you received from the state when you filed to start your LLC
Corporate By-Laws: this document spells out who are the members and managers of the LLC and what authority these individuals have. Specifically the power to borrow money in the name of and obligating the LLC.
Certificate of Good Standing: Not all programs require this but when they do they must be within 90 days of closing the loan.
EIN Certification: Tax Identification number as presented on the SS4 form from the IRS. This form is required in all programs.
Foreign Entity Registration: If your entity was formed outside of the state you are investing in, you may be required to register your company. This registration, needs to be renewed annually.

Additionally, you need to Identify the Guarantor.

Current State Issued Drivers License or State Identification Card
Green Card if the Guarantor is a permanent resident alien

Fast Close Fix and Flip Loans: Borrower be Prepared – Experience

Experience is a very important underwriting factor for fix and flip loan programs. To be prepared and ready to close fast, have your track record prepared.

Your track record should list the following information:

Every fix and flip project completed in the last 5 years including; address, date of purchase, purchase price, property type (number of units), cost of renovation, sale price and date of sale.
Every ground up construction project completed in the last 5 years including; address, date of purchase, purchase price, property type (number of units), construction start date, cost of construction, sales price and sale date.
Every Rental property currently owned including; address, date of purchase, purchase price, property type (number of units), renovation costs, current value, gross rental income, taxes and insurance, net rental income.

The best way to do this is to keep a track record on your computer and update it as you complete a project.

Fast Close Fix and Flip Loans: Borrower be Prepared – Assets

Most fast close fix and flip loans require verification of assets. The lender needs to confirm funds for down payment, closing costs and reserves. To verify this the underwriter needs the last 2 months bank statements and verification of the last 2 months of any other liquid assets including retirement funds. Some programs do not verify assets, some only need the last month. The purpose of this article is to help you be prepared for fast close fix and flip loans. Therefore you should always have your asset documentation available.

Fast Close Fix and Flip Loans: Borrower be Prepared – Detailed Scope Of Work

Of all the items to have prepared for fast close fix and flip loans having the scope of work submitted to the lender in a timely fashion causes the most delay. The delay happens because most often the detailed scope of work is completed by the contractor, not the borrower. The contractor often delays in getting the detailed scope of work done for a number of reasons, one is they are busy with other projects. It is essential to have the contractor or a project manager walk the project with you prior to submitting an offer to purchase to get a repair budget and then immediately submit a detailed scope of work as soon as offer is accepted. Impress upon the contractor the importance of getting the detailed scope of work back quickly. You need to let them know this is a condition of them getting the contract. I also want to emphasize that the scope of work must be detailed with an explanation of what is specifically being done. Again this is necessary to ensure we get a good after repair value. For instance there is a big difference in cost and value to marble counter tops versus vinyl counter tops.

The item that takes the longest to process in a Fast Close is the appraisal. The appraisal can not be ordered without the detailed scope of work. Even if the loan qualifies for the no appraisal option the detailed scope of work is necessary for a desktop valuation so the lender knows the after repair value and they will also determine if the budget is in line with the work to be done. One of the main reasons projects fail is the investor underestimated the cost of the work to be done. The underwriter will access the rehab budget to ensure the costs are inline with the work being done. So whatever you do it is imperative to have the detailed scope of work prepared and submitted as soon as you have an accepted purchase agreement to ensure a fast close.

Fast Close Fix and Flip Loans: Borrower be Prepared – General Contractor Approval

Some programs require the general contractor be approved prior to closing. As a part of fast close fix and flip loans you want to have the documents on hand to have your General contractor approved. The general documents required are as follows:

Current General Contractor License
Current General Contractor Liability Insurance
Current General Contractors Worker Compensation insurance (if they have employees)
List of recent projects completed (at least 3) including address, date completed and approximate dollar value of the scope of work.

These are things that are sometimes needed for the lender to vet the contractor, but you should request these as you vet the contractor. Additionally you should check the better business bureau and local government agencies for complaints against the contractors you choose.

Fast Close Fix and Flip Loans: Borrower be Prepared – Conclusion

Whether you have applied for or are looking to apply for 10 day fast close fix and flip loans. You should be prepared if you are doing this as a business. This will save you time and money.

FBC Funding has multiple programs that offer 10 day fast close fix and flip loans. Additionally, we offer programs that offer that may not close in 10 days but could in 15. The key is the borrower is prepared. To be prepared a borrower needs; Entity documents, ID, Assets, Experience, Detailed Scope of Work, and GC Approval. This will help your loan close quickly. These documents should be forwarded to lender upon pre approval or at the latest when you have an accepted contract offer. Do not wait until the review period is over to begin to process your loan. Begin the process as soon as possible. The clock starts on a purchase agreement the day the offer is accepted. The clock starts on the lender closing a loan when they receive the requested documents. Make sure they are the same day.

For more information on fast close fix and flip loans call 888-848-3114, email info@fbcfunding.com or click here to schedule a free loan consultation.