Hard Money. There are many types of hard money or fix and flip financing programs available today. The question many investors are asking is, what is the best option for me. This answer really depends on your circumstances because there is no one best option for every investor. That is  one major advantage of working with a hard money mortgage broker who will properly represent your interest and not just sell the program they have.  Most Real Estate Investors want to put no money down for the purchase and get 100% financing of the rehab as well. They also want the lowest interest rate and lowest points and fees. Unfortunately, you can not have both the best terms and no investment. So here are important factors to consider when determining the best  hard money loan purchase rehab program for your situation. Consider these points:

• How much money do you have for the down payment
• How much money do you have for renovation
• How much experience do you have as a fix and flip real estate investor
• Are you working on other projects now
• What is the return on this investment
• Are their additional potential projects you can do before this one is complete
• Do you meet lender guidelines

No Money Down Financing

On the surface this should be the best option always because you are not investing any money for the purchase or rehab of the property. In reality the Hard Money Lender is taking all of the risk while you earn the majority of the profit. For the increased risk the rates and fees are higher. Therefore if you have options the added costs of 100% financing may not be to your benefit. You must weigh the options. Obviously, if you do not have the funds for down payment and renovation or you are working on other projects now, the 100% financing may be your only option. You must realize the Hard Money Lender will either take an equity position or charge higher points and fees. Typical hard money terms are  about 20% to 30% down payment (or more), 10% to 12% interest rate and 3 to 4 points. You may get a lower down payment with similar terms if you have very good credit and substantial experience as a fix and flip real estate investor. In contrast for no money down option you would pay 16% to 18% interest and 8 to 10 points, plus you have a shorter term to complete the project generally 3 to 6 months. These higher rates and fees generally equate to a cheaper equity partner. Most equity partners who put up all the money get at least 50% of the profit.

How to Qualify for 100% Financing Hard Money Loan

Most Hard Money Lenders that offer the 100% financing option look at two major qualification requirements. The first is the property. What is the purchase price, the as is value, the cost of rehab and the after rehab value. If they can realize an after rehab value of no more than 60% to 70% of their total investment of the purchase price and rehab costs (some lenders even cover closing costs if the ARV LTV is good) and their profit is sufficient then the most important criteria is met. Secondly, the HML considers the experience of the investor. How many projects have they completed in the last year or two. Many require three to four recent projects before they would consider a fix and flip investor experienced.

Finally choose the no money down hard money loan if you have no choice or if you are working on other projects and just do not want to deploy your funds. There are investors who only use OPM (other peoples money) and their philosophy is to do as many deals as possible without using their own money. You can make an informed choice.

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Fix and Flip

FIX AND FLIP

That’s right! You can qualify for a fix and flip loan with no credit check and no income verification.  In fact you can qualify for up to 90% of the purchase price and 100% of the renovation  costs. We now require a minimum credit score of 620 and no verification of income. Due to extensive delinquencies this program has been changed.

This Program Now Requires Minimum Credit Score of 620!

Before 2008 Hard Money Lenders regularly made loans to experienced Real Estate Investors solely based on the value of the property. It was rare that a property would lose value. Since the financial market crash things have been very different. Today most rehab lenders do need to know these three things. They want to know:

• The value of the property: The “As Is Value” and The “After Rehab Value”.
• The financial profile of the Borrower: This includes income, assets and credit.
• The experience: Has the borrower, successfully purchased, rehabbed and flipped properties recently.

With adequate collateral an acceptable credit profile and substantial experience, you would think the the borrower would need to really be a conventional buyer, yet that is not true. As many hard money lenders relax some of these guidelines to invest in purchase rehab investors. Though every hard money or private lender has their own guidelines, all require that their be substantial equity in the property.

Covid 19 update

Before the covid 19 pandemic we were funding loans with no minimum credit score. Due to the pandemic the financial markets are tighter and most programs require 650 or better credit score. With this program we can fund loans with credit scores as low as 620 with no experience. The better the credit score and experience, the better the loan terms are.

REHAB LENDERS

Most rehab lenders require borrowers to have skin in the game as well. Those that do not, have the highest rates and the highest fees. This really is understandable because they are taking all the risk. There must be adequate reward for greater risks. That being said these can still be win win situations for the lender and the investor.

Win for the the lender because the higher rate and fees. Win for borrower who has no little or no money or credit, yet with the right property they can make a substantial financial gain.

SPECIAL REAL ESTATE INVESTOR PROGRAM

Yet, with nearly thirty years of mortgage financing experience my favorite program is fix and flip loan where there are there is not a high credit score required, no income asked or verified and with Loan to Values up to 75% of the after rehab value while still offering competitive rates, competitive fees, and 12 month interest only terms.

This program will even consider first time investors while rewarding experience investors with lower rates and even non recourse options.

So you must ask yourself if you are a real estate investor does your lender offer all of these options???

If the answer is no we can help, if the answer is yes compare our rates, points and fees.

This program now requires minimum credit score of 620

For more information call 888-848-3114

Click Here to schedule an loan consultation

Click Here to apply online

The post Fix and Flip Loan Low Credit Score and No Income appeared first on FBC Funding.

Unsecured Funding for Real Estate Investing

Stop giving away half of your profits to a funding partner! Our unsecured credit lines can be used to purchase, rehab, and fix & flip real estate. You can leverage our unsecured financing to do more deals, buy property for less, close faster, rehab your properties easier and increase your bottom line on each and every property you purchase.

You can us the money and make payments on your revolving business line of credit as often as you need. This means you can use the same line over and over again with no additional fees or closing costs. As you fix and flip the property your line is paid off once the home is sold and you have the line available to do it again. This is an exciting program for most real estate investors.

You can leverage these funds to:

• do multiple deals at the same time
• buy properties at auctions or sheriff sales for cash
• fix and flip property with no additional financing
• wholesale properties for immediate returns
• build your buy and hold real estate investments
• get lower prices as you are a cash buyer
• finance properties lenders do not like
• You can be the investment Partner with Cash
• build additional business credit easily

Unsecured Funding Real Terms

• Rates as low as 8.99%
• 0% starter rates are often offered
• No Income is checked
• Quick approvals
• close in as little as 15 days
• Unsecured – no collateral required
• Unrestricted use – no questions asked
• credit lines same as cash
• no upfront costs – no application fee or appraisal fee
• Unsecured Funding may be a term loan or a credit line
• Unsecured funding may be business or personal
• Business Credit line does not report to personal credit bureau or affect debt to income ratio’s
• Personal Credit lines may have higher limits
• Personal Credit Lines may have lower rates

If you manage your unsecured credit well for six to twelve months you can increase your credit lines to help further grow your real estate investing business.

What could your Real Estate Investing Business do with $100,000 or more?

Unsecured Funding for Real Estate Investing Guidelines

• Minimum Credit Score 680. Meeting the minimum credit score does not guarantee approval – Credit profile is reviewed.
• Minimum Income is $50,000.
• Maximum Debt to income Ratio is 40%. We offer programs for borrowers with strong credit were income is not verified. Those rates may be higher.
• Maximum Credit Usage is 40%. No credit card should have an unpaid balance greater than 40% of the credit limit.
• Maximum Credit Inquiries is 5 per credit bureau in the last year.

Real Estate Investing with unsecured funding can really increase your business if you qualify for unsecured funding.

For more information call 888-848-3114 or email louisj@fbcfunding.com

Apply Here Now

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