Fix and flip loans are characterized by specific terms and rates that reflect their short-term, high-risk nature.
Loan Term: Generally ranges from 6 to 18 months, aligning with the anticipated duration of the purchase-renovate-sell cycle.
Interest Rates: Higher than traditional mortgages, typically between 8% to 15%, depending on factors like the lender, borrower's experience, and property location.
Loan-to-Value (LTV) Ratio: Lenders may finance up to 85% of the property's purchase price or a percentage of the ARV, usually up to 75%.
Fees: Origination fees, points (a percentage of the loan amount), and closing costs are common.
An investor from Israel was looking to purchase and renovate a single-family home in Atlanta, Georgia. With no U.S. credit score, he faced difficulties obtaining financing from traditional banks. Through Lendai’s AI-driven underwriting, he secured a 12-month fix and flip loan with a attractive interest rate, covering 80% of the purchase price and 100% of the renovation costs.