What is Fix & Flip Financing and its Benefits?

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As more investors have entered the market of flipping old properties, a new financing model has emerged. 

There is potential for making money in flipping houses, but there is a financial imposition for getting started. Also, conventional mortgages were created for long-term residences, making them unfavorable for investment. Therefore, fix & flip financing has emerged to fill this gap.

What is Fix & Flip Financing?

Fix & flip financing includes the type of loans that have a short-term and are created to assist an investor in purchasing or renovating a property to sell it at a profit, typically within 12 to 18 months. 

Real estate lenders in the USA use fix & flip loans to sell residential properties at an auction and cover the costs incurred on renovations or upgrades.

Fix and Flips financing

What are the Benefits of Fix & Flip Financing?

Understanding the benefits of fix & flip financing is important to know more about it.


  • Quick funding

The investors who bid on foreclosures or auctioned properties require cash in hand. But, traditional home loans could take a month to process and credit the loan amount, whereas fix & flip loans can provide funds within a week.


  • Terms are flexible

Fix & flip loans are not regulated under any rigid or complex processes. Therefore, it becomes easy for the borrower to get the loan amount.


  • Control on the mortgage rate

The best fix & flip lending services allow you to purchase, upgrade or build the property. As a result, you can lower the up-gradation cost, allowing your buyer to purchase the property at low prices.


  • Pre-payment penalties are zero.

Generally, banks or other financial institutions penalize the lender if you pay them before the loan’s maturity date. However, fix & flip loans do not hold such penalties, which offer an opportunity to keep profits after the sale of the property. 


If you are searching for trusted fix & flip financing services, check out VP Capital Lending for expert financing advice.

 

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