Fix and Flip Loans Market Update [2023]

Fix and Flip Loans Market Update [2023]

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Beau Eckstein provides a 2023 update on Fix and Flip financing.
Interest rates range from 9.75% to 12.99%.
Rates are influenced by down payment, credit score, LTC, and ARV.
A 20% down payment results in rates as low as 9.75%.
Experience in Fix and Flips can lead to better terms.
Flex Bridge Loans offer flexibility with no DSCR requirements.
Stabilized Bridge Loans ease transitions into rentals.
A resurgence of Fix and Flip opportunities is observed.

Welcome to the Investor Financing Podcast, hosted by Beau Eckstein. In this episode, Beau Eckstein provides a comprehensive update on the Fix and Flip financing landscape for 2023 and beyond. Discover the latest trends in interest rates, loan terms, and strategies for maximizing your investment in the Fix and Flip market.

Interest Rates in 2023

Beau discusses the current interest rate scenario in the Fix and Flip financing space. Rates are ranging from as low as 9.75% to around 12.99%. The key factors influencing these rates are the down payment, credit score, loan-to-cost (LTC), and loan-to-ARV (After Repair Value).

Low Down Payment Option: If you opt for a 20% down payment based on the purchase price, you can secure rates starting at 9.75% to 9.95%. This allows for 80% of the purchase price to be funded, alongside 100% of repair costs. A higher down payment can result in better pricing.

Higher Down Payment: Beau emphasizes that putting down a larger down payment, such as 20%, can lead to significant interest rate savings. Investors who choose this route can enjoy rates as low as 9.75% or 9.95%, compared to those who put down less, facing rates around 11% or 10.75%.

Experience Matters

Beau highlights the significance of an investor's experience in the Fix and Flip industry. Some lenders offer more favorable terms to individuals with a proven track record of successful Fix and Flip projects over the past two years. This can potentially lead to even more competitive financing options.

Flex Bridge Loans for Rental Properties

In the current market, Beau discusses the increasing popularity of Flex Bridge Loans for those transitioning from Fix and Flip to rental property models. These loans offer flexibility without Debt-Service Coverage Ratio (DSCR) requirements.

Loan Terms: These loans typically allow for 70% of the new appraised value after six months of seasoning. Investors can choose from twelve, eighteen, or twenty-four-month terms to suit their needs.

No DSCR Requirements: Unlike traditional DSCR loans, Flex Bridge Loans focus on the property's rent-readiness rather than complex financial ratios.

Stabilized Bridge Loans

Stabilized Bridge Loans provide investors with a bridge between short-term and long-term rental property strategies. This option is especially appealing for those who want more time to make strategic decisions.

Transitioning to Rentals: Investors can use these loans to transition their properties into long-term, short-term, or midterm rental options, allowing them to optimize rental income.

Flexible Terms: Beau mentions that these loans come with various term options to accommodate individual investor goals.

Resurgence in Fix and Flip Opportunities

Beau Eckstein notes that there is currently a resurgence of opportunities in the Fix and Flip market. Many repeat customers are returning to the market, actively working on one or two deals at any given time. While some investors have numerous projects, there is widespread activity and optimism in the industry.

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#fixandflip #renovationloan #bridgeloans #hardmoneylending

About Beau: Beau Eckstein is a franchise consultant, commercial mortgage advisor, and business ownership coach who helps entrepreneurs buy, build, and expand their businesses. He assists aspiring entrepreneurs in finding their ideal franchise or business opportunity. Beau's expertise as an investor and business owner allows him to guide clients through the entire process of acquiring, funding, and growing their ventures.

About the Channel: Want to structure your investments in the right and secure way?

Learn great insights and make the right decisions through the Investor Financing Podcast hosted by Beau Eckstein.