What Are Fix and Flip Loans?

What Are Fix and Flip Loans?

Fix and flip loans are specialized short-term financing options designed for real estate investors aiming to purchase, renovate, and resell properties for profit. Unlike traditional mortgages, these loans focus on the property's potential after-repair value (ARV) rather than the borrower's creditworthiness. This emphasis allows investors to acquire and improve properties that may not qualify for conventional financing due to their current condition.

Typically, fix and flip loans cover both the acquisition cost and a portion of the renovation expenses. The loan terms are usually short, ranging from 6 to 18 months, aligning with the investor's goal to renovate and sell the property quickly. Interest rates are higher than standard mortgages, reflecting the increased risk and shorter loan duration.

Lendai has helped many foreign investors secure fix and flip loans without needing a U.S. credit score. For instance, an investor from Canada secured a fix and flip loan to renovate a distressed property in Miami. Lendai’s approval process, which focuses on AI-driven underwriting, enabled the investor to close the deal within seven days, begin renovations immediately, and resell the property within five months.

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