Whether you’re a novice in the realm of flipping houses or an experienced real estate investor, our expertise enables us to assist you in securing the ideal loan product for your next property-flipping venture. With a wealth of knowledge and resources at our disposal, we are well equipped to cater to the diverse needs of individuals at all levels of experience, ensuring a seamless and successful journey in the world of real estate investment.
Leverage in real estate depends on your credit score and experience as an investor. For newcomers with low credit and less experience (less than three flips in three years), lenders perceive higher risk, leading to reduced leverage and a larger upfront investment. This might mean a 60% Loan To Value (LTV) with a $100,000 down payment on a $250,000 property, while the lender covers up to 75% of the After Repair Value (ARV) for renovations.
However, new investors with impressive credit scores can qualify for up to 80% LTV, requiring a $50,000 down payment on the same $250,000 property. On the other hand, seasoned investors (minimum three flips in three years) with excellent credit can access leverage up to 90% LTV, resulting in a mere 10% or $25,000 down payment for a $250,000 purchase. Additionally, lenders cover 100% of renovation costs, up to 75% of the ARV. Understanding the impact of credit score and experience allows investors to make well-informed decisions and optimize their real estate ventures.
Real estate gurus often emphasize that having a great deal can make your credit less relevant to lenders, particularly when dealing with private lenders. Private lenders are typically individuals you know, like family or friends, who fund promising deals based on your track record, without scrutinizing your credit score. They might invest from their retirement accounts, cash value life insurance, or personal savings, making it more of a relationship-based lending process.
In contrast, institutional lenders, including hard money lenders, place significant importance on your credit score—often determining whether they’ll work with you, regardless of how profitable the deal may be. The minimum credit requirements may vary with market conditions, impacting your leverage and necessitating more upfront capital if your credit is near the minimum threshold. If you’re aware of your credit’s limitations, it’s wise to start working on improving it early on through resources like eFunderCredit.com.
What are the requirements?
Corporate Documents (EIN, Articles of Organization, Operating Agreement)
Last Two Years of Federal Tax Returns (depends on the lender behind the loan)
Three Months of Bank Statements (account must show enough for your down payment and closing costs)
Photo ID (Driver License)
Our broker fee is two points (2% of the loan amount) on anything over $100,000 or four points on anything less than $100,000, or a minimum commission of $2,000, whichever is greater.
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