Here are current interest rates for fix-and-flip loans – and how should you move forward because of them.
What do rates look like for fix-and-flip loans currently?
You can probably guess – rates for all loans have gone up.
Interest Rates for Fix-and-Flip Loans
At The Cash Flow Company, we represent about five or six capital funds. We’re always looking for the ones with the best rates, but still – there’s nothing much available in capital funds lower than a 10-12% interest rate.
Six months ago, you could find these same loans for closer to 7-8%. This is the squeeze. This is the tightening the Fed wanted when they raised interest rates. Now it’s affecting your loans for fix-and-flips, but you can still get prepared for better opportunities.
Advice on Flips for the Next Few Months
There are a few things we recommend to set yourself up for success with flips in the next few months.
- Smaller Projects – Smaller, lower price point homes tend to sell better in this type of market.
- Bigger Neighborhoods – Outlier, rural properties were popular in the midst of the pandemic. But now those same properties are sticking on the market for a long time. Keep your flips inside a big, good neighborhood.
- Aggressive Funding – Be proactive and relentless in your search for funding sources (or have someone searching on your behalf). When great new deals come, you’ll be one of the few investors who is ready.
- Consider getting a HELOC on your home now so you have available funds when you need them.
- Call banks and other lenders to stay updated on their requirements.
- Find OPM lenders. Especially in an economy like this, people with money want safe, secure returns. Getting those people to fund your investments can help you take advantage of upcoming low prices.
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