First-time house flipper asks, “Can I get 100% financing?” Plus money for remodeling and carrying costs.  

A California Realtor with 15 years experience recently emailed First Capital Trust Deeds wanting to know “Can I get 100% financing?” hard money fix and flip financing to get into the house flipping game for the first time:

I am interested in short term loans, like for flips, for a while and then fix and flip, etc. I have a 15 year Real Estate license and I feel that I know what I am capable of doing, I just don’t have the funds and I am looking for the opportunity to succeed. Your reply is appreciated and very necessary.

We receive at least 3-4 similar requests each month from experienced real estate professionals who located a great property but don’t have the cash to complete the acquisition.

Instead of looking for a hard money lender to bare all of the financial risk for a complete stranger, this experienced Realtor would stand a better chance of success by first securing a capital partner with the money for the down payment, carrying costs, and renovation expenses. Usually, the capital partner is a friend or family member with cash and an interest in real estate but doesn’t know where to look for great properties to flip.  Bringing the two people together can sometimes lead to a successful partnership.

After the capital partner is on board, then the Realtor can go look for hard money financing, which sometimes can go up to 80% of the purchase price if there is enough built-in equity at the time of acquisition.  Usually, though, for first-time property flippers, the loan is limited to 75% of the purchase price.

Below is a sample of the costs and fees associated with a hard money fix and flip loan based upon a $250,000 purchase price.

Hard Money Fix and Flip Financing Terms

  • $187,500 — Loan Amount (75% of $250,000)
  • 12.00% — Interest-Only
  • $1,875/mo. Payment
  • 12 Month Term
  • No Prepayment Penalty
  • Closing Costs:  2.50 Points (no appraisal fee or junk fees)