If you’re an investor specializing in fixing and flipping properties, getting a traditional loan to finance your projects isn’t always the easiest way to go. Not all properties will be approved due to the rigid guidelines set in place for underwriting loans, and if the home is in disrepair, it’s unlikely the loan will be approved. They need a large contribution out of pocket, and while all loans will require some form of down payment, there are better ways to leverage undervalued property and turn it around for profit. This is where rehab loans come in.
What Are Rehab Loans?
A rehab loan is a type of hard money loan, and is meant for the purchase and renovation of properties, though they aren’t strictly for this purpose. They can be used by long term investors to refinance property as well. Rehab loans enable you to borrow the money needed for the investment, as well as the funds needed to build the property back into respectable shape.
When considering a rehab loan, it’s important to do so responsibly; rehab loans aren’t meant to be a long-term solution. They are instead a short term means to acquire and renovate your investment properties, and terms can range anywhere from 6 to 18 months, depending on your project needs. You’ll want to enter into the deal with clear plans for the properly, as well as a backup plan for when things go awry. You can get them more quickly than you would going through a traditional lending company, and you never have to worry about the current quality of the property disqualifying you from loan approval.
Hard Money Lenders NLDS Corp has all the information you need to get started with your rehab loan. The rates for qualified borrowers are 65% ARV and our 7-day closing program ensures you get the rehab loan you need fast.