What are Rehab or Fix and Flip Loans?

  • Rehab or fix and flip loans finance the purchase or refinance and renovation of a real estate investment property.
  • With a typical fix and flip or rehab loan, the borrower receives a payment at closing to buy or refinance the property. The remainder of the loan is paid out in installments as the renovations are completed.
  • In most cases, lenders will use the property as collateral for rehab or fix and flip loans and underwrite the project by comparing the size of the loan to the value of the property after repair (i.e., “After Repair Value” or “ARV”).

Why Use a Private or Hard Money Lender for Fix and Flip Loans?

  • Many borrowers will fail to qualify for a traditional bank loan. Failure to qualify can result from a variety of factors, including inadequate project size or type, limited or insufficient borrower financials, or inexperience of the borrower.
  • Most banks shy away from single-family residential and small to medium-sized multifamily and commercial properties that require major rehabilitation. A private lender has expertise in these types of projects.
  • Great deals go quickly! Private lenders, such as Walnut Street Finance, specialize in funding fix and flip loans, which require speed, flexibility and dependability.

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