Fix and flip loans can be difficult to access, especially when you’re a beginner in the industry. As you build experience, you’ll have an easier time qualifying for the most competitive loan options.
Here are three steps to get the right fix and flip loan for your business.
1. Understand your financing needs
You should gather all the information about your fix and flip project and create a scope of work and plausible timeline in order to accurately estimate costs. After you have a sense of how much your project will cost, you’ll be able to figure out how much business funding you need.
2. Evaluate your qualifications
Once you have a better sense of how much financing you’ll need, you can evaluate your credentials — time in business, annual revenue, personal credit score — to determine what fix and flip loans you’ll qualify for.
If you’re a fix and flip beginner, you’ll likely have to rely more heavily on your personal credit and financial history to access financing. More experienced flippers will be able to use their house-flipping portfolios and business financials to secure a loan.
3. Find the right lender
The best lender for your fix and flip loan will vary depending on the type of financing you need, the details of your project and your qualifications, among other factors. You should research and compare multiple small-business lenders to find the one with the most competitive rates and terms.
It may be helpful to consult with other house flippers to discuss their experience with financing and get recommendations or ask questions about lenders. Ideally, the lender you choose will have experience in the house-flipping industry and will be able to show you examples of work they have done with other borrowers.
