Understanding Hard Money vs. Fix and Flip
Updated: Jun 3, 2022
Hard Money Loans or Fix and Flip Loans? Which is Right for You
If you want to purchase a real estate investment property and are worried about getting approved for a traditional mortgage loan, then a Hard Money Loan or a Fix and Flip Loan might be the right option for you! Both are asset-based loans with a quicker and easier approval process than traditional loans. These loans use private money to fund investment properties and are higher risk loans. Working with Stratton Equities can help you determine the best loan for your needs and get you on the path to approval today!
What is a Hard Money Loan?
Hard Money Loans are for investment properties only – due to their high interest rates and costs, they cannot be used for owner-occupied properties – making them ideal for the real estate investor. They are loan-to-value loans, meaning that they are based on your assets rather than your credit history, and are generally capped at 65% of your asset’s value. The approval process is quick and easy as there are few regulations and no minimum FICO score required.
Funding from a hard money loan can be received in as little as 2-3 weeks from applying.
What is a Fix and Flip Loan?
Fix and Flip Loans are asset based loans, but unlike a Hard Money Loan, the borrower’s ability to borrow is also considered in the approval process. They are best for real estate investors who want to purchase a property to fix and then quickly flip. Because there are a few more requirements for approval, a Fix and Flip Loan can be up to 90% of your purchase price.
These are the criteria and underwriting requirements needed to be approved; within the last 2-3 years to you cannot have any foreclosures, judgments, late payments or bankruptcies.
What Should My Next Steps Be?
Contact Stratton Equities today, and we can help you determine which loan fits your real estate investment the best! We are the Nationwide Leading Direct Hard Money and NON-QM lender – we have a wide-range of programs, lowest private money rates (starting at 4.5%), a helpful, friendly, and professional team, and a quick and hassle-free loan approval process. Working with us will get you through all the fine details in a rapid process, out-pacing our competitors.
If you have an investment property and wish to speak with one of our Loan Officers, call Stratton Equities at 800-962-6613, email us, or apply for loan pre-qualification today!