Fix and Flip for Multifamily Properties

Multifamily Fix and Flip Funding Solutions

In recent years, we’ve seen many of our seasoned real-estate investors turn to multi-unit dwellings to diversify their portfolios. Demand for rental units continues to rise across the United States, and fix-and-flip investors are noticing. Here, we’ll discuss short-term loans to purchase and rehab multifamily, not to be confused with funding for buy-and-hold residential rental properties or commercial properties. While renovating a multifamily property may require a larger investment and more work, it can be very profitable when executed correctly. Contact the FBC Funding mortgage professionals in South Holland, Illinois, to learn more about this and other fix-and-flip funding solutions.

The Basics of Multifamily Investing

Multifamily properties, also known as multidwelling units, contain more than one housing unit within a single building or group of buildings within a single complex. Duplexes, triplexes and quadplexes are all multifamily properties, as are town houses and semi-detached properties, with two separate homes on a single piece of land.

Selling a multifamily property can be intimidating to some of our investors who have not worked with this type of property before. While the search for the right buyer differs than with a single-family residence, it is not necessarily more challenging. As the cost of renting continues to rise in South Holland and across Illinois, landlords and property investors recognize that they can increase profitability by purchasing multi-family units, which means you have a great chance to succeed in fix-and-flipping this type of property. We offer three programs multifamily rehab lending. This is Program One for Multifamily fix and flip. Program One is for more experienced investors seeking value add versus major renovations. Programs Two and Three address major rehabs, smaller loan amounts and credit scores down to 600.

Fix and Flip for Multifamily Properties – Program One

• Loans from $250,000 to $5,000,000 with no limit on the number of units
• Loans up to 80% of the purchase price with rates as low as 8.5% and 24 month term
• Minimum credit score of 670 is required
• Multifamily property must have at least 5 units
• Projects with at least 50% occupancy are preferred
• Value add projects are preferred over gut rehab projects
• Rates are as low as 8.5%

This multifamily fix and flip program is designed for clients with strong credit and who have experience owning and renovating multifamily properties. Strong net worth and liquidity may allow for flexibility if credit and experience do not meet the program requirements. If you do not meet the requirements of the program, we offer other multifamily rehab programs that may be a better fit.

Fix and Flip for Multifamily Properties – Program Two – 100% Financing

• Loans from $100,000 to $1,000,000 with the maximum number of units at 20 units
• Loans up to 100% of the purchase price and 100% of the rehab – value add – costs.
• Maximum loan to after rehab value is 65%.
• Minimum credit score is 660 and borrowers with credit scores greater than 700 qualify for lower rates and points.
• Multifamily properties must have at least 5 units and no more than 20 units.
• Mixed Use properties are acceptable as long as the residential component is greater than 50% of the total square footage of the property.
• The borrower should have completed at least one multifamily property in the last 2 years.
• Ground up construction for up to 20 units is also acceptable. We will fund 100% of vertical costs of the new construction project for an experienced investor.
• Full Documentation loan verifying income, assets, credit and experience. Borrower should have cash flow to cover the interest only mortgage payment. If they do not this requirement can be over come by greater liquid assets to show the borrower has the ability to repay the loan.

Of course the advantage of this fix and flip multifamily property program is that we will fund 100% of the purchase price and 100% of the rehab costs. Though the rates and fees are a little higher as there are greater risks when the borrower only brings closing costs, but no down payment, to closing. This is a great way for Real Estate Investors to maximize the the growth of their portfolio using the “BRRRR” real estate investing strategy. In the “BRRRR” the real estate investor would BUY the multifamily property, REHAB the multifamily property, RENT the multifamily property, then REFINANCE for long term lower rate financing and REPEAT the process. With no down payment, if you purchase the property right the multifamily property will increase in value based on the projected after rehab value. When you refinance the property you should get enough cash out for the down payment of your next multifamily project.

Fast Funding for Faster Profits

Whether you’re just beginning as a fix-and-flipper or have been profiting as an investor for a while, FBC Funding has solutions for you. As a Correspondent Lender and Commercial Mortgage Broker we have strong funding programs and can offer fast answers when time is of the essence for our fix-and-flip for multifamily clients. There are some amazing multifamily properties with huge potential available in South Holland, IL, and for the forty states we provide fast funding. Contact our mortgage professionals to see what great rates you could secure for multifamily fix-and-flip properties. Complete the quick quote form. Call FBC FUNDING at 888-848-3114  or email louisj@fbcfunding.com