What is a Fix and Flip Loan?
Sometimes referred to as a rehab loan, a fix and flip loan can help you purchase, rehab or renovatean investment property. It is a type of hard money loan from a private lender, meaning the lender focuses on the value of the property (the asset) that is the subject of your investment rather than focusing on your credit score and income.

Why Get a Fix and Flip Loan?
The traditional mortgage processis long and cumbersome and doesn’talign with the timing needed for real estate investing and house flipping. They can take 30–45 days to close, they come with a lot of requirements and checklists, credit scores are considered, they’re incredibly inflexible with payment schedules, and they often require a significant down payment. That’s a lot of hassle and capital.

Fix and flip loans, on the other hand, are designed by hard money lenders who understand your goal. These private lenders know that you’re working to increase the property value through renovations. And they’ve built some advantages into their loans for you:
• Speed: There’s no need to wait up to 45 days for a loan to close on your investment property. Fix and flip loan are designed to close within days, allowing you to secure the deal and get moving on your project.
• Flexible Payment Schedules: A fix and flip loan is designed so that the hard money lender has the freedom to adjust the payment schedule (and other terms) to align with your project goals.
• Minimal Upfront Capital: With a fix and flip loan, you’ll only have to come up with a down payment, making securing it that much easier. Value-added lenders will finance all closing costs and set up an interest reserve that covers your interest payments for the first few months.
• Easier Approval: Though credit history is taken into account by a hard money lender, their main focus will fall on the value of the property itself.

Getting a Fix and Flip Loan is Easy.
You can get your fix and flip loanwith just a few simple steps:
1. Identify the property you want to flip.
2. Submit your information to apply, including:
a. Personal financial statement
b. Proof of income
c. Property information
3. The loan goes through the underwriting process.
4. The loan gets approved (often in just a few minutes)
5. Loan closing

And just like that, you can get started on your first (or fifth) fix and flip project. It’s not as easy as the reality shows make it out to be, but it’s not impossible either. With proper planning, getting your fix and flip loan can be simple. Good luck!

Author's Bio: 

Sometimes referred to as a rehab loan, a fix and flip loan can help you purchase, rehab or renovatean investment property. It is a type of hard money loan from a private lender, meaning the lender focuses on the value of the property (the asset) that is the subject of your investment rather than focusing on your credit score and income.