Fix & Flip Loans

New construction loans are similar to fix and flip loans in a few ways. First, both loans are short-term loans that do not offer 15 or 30 year terms. If you choose to hold the project as a rental, you will need to refinance into a permanent mortgage when finished. Many conventional lenders have a 6 month seasoning requirement before they'll refinance at 75 - 85% of ARV.

Both loans cover the purchase price of land and renovations / construction costs. Both loans are released in draws.

New construction loans expose the lender to higher risk as there is no colateral to hedge against the potential of default by a borrower. For this reason they carry a higher interest rate. Further, borrowers are required to bring a 10% down payment to closing to put some skin in the game.

We lend up to 90% of lot purchase and construction costs and up to 100% of construction cost, depending on an operators needs. The loan to ARV ratio must not exceed 85% LTV.

We processes 3 draws based on completed work and will verify the completion of work with invoices/receipts. We offer commitment funding where interest accrues on funds after they've been dispursed.

We strive to fund draw requests within 24-72 hours.

Developers with detailed project plans have the best chance of successfully completing projects. We work with borrowers to ensure that an accurate and feasible project plan is in place before new construction loans are originated.

As a private lender, we offer no prepayment penalties and in worst-case scenarios where a timeline gets extended, we're happy to offer the option to extend loan terms by 6 or 12 months.