Why did I buy these 3 fix/flip loans?
Articles for the Ambitious Real Estate Investor
Many times we will buy fix/flip or bridge loans from the secondary market (i.e. loans originated by another party) and collect the interest income. This is a quick way to deploy excess capital and get a return.
Besides the typical LTV criteria here are 3 things that are unique and important to me…
👩💼 BORROWER: Must have money 💵 in the bank, skin in game (sizable amount down), and lives near asset
🏠 ASSET: Good neighborhood (lawn cut, pride of ownership), and median price range for area, adds geographical diversity
🤑 EXIT STRATEGY: If things go south and I get property back then I want to be able to make more income on the property as rental or with owner financing than the net interest income I was getting.
If you are looking to borrow funds for a fix/flip or bridge loan then these criteria should be important to you as well. You should have reserve funds, buy in the right areas, and make sure you have more than one exit.
Have Questions?
If you have questions about this article you can connect with Randy here.
Author: Randy Rodenhouse
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