Each week we get requests for fix and flip financing from house flippers who want to leverage their cash as far as possible across as many projects as possible. Sometimes, they shoot too big and take on more projects than they can afford. Other times, like in this case, they stick to their plan and take on a project that they can successfully manage, which means managing the contractors and managing the budget, including servicing the debt on the hard money fix and flip mortgage.
We like situations like this with experienced borrowers who pay on-time every month. Even though we act as the originating mortgage broker in transactions, when payments are late, the lender or trust deed investor usually calls on FCTD to reach out to the borrower and make sure payments are sent in quickly.
This loan was paid on-time. But in those cases where borrowers get too far extended, we get the call from the lenders to make sure the payments are sent in promptly.
Good news on this one. It was a relatively modest loan-to-value (LTV) by an experienced house flipper who didn’t extend themselves too far. Thus, no calls from lenders needing our assistance with payments from borrowers.
77% LTV Fix and Flip Financing Terms:
- $270,000 Loan Amount (77% LTV purchase/63% LTV of After Repair Value (ARV))
- 11.00% Interest-Only
- $2,475/Month Payment
- 12-Month Term
- No Prepayment Penalty