FAQ

The 70% rule suggests that an investor should pay no more than 70% of the after-repair value (ARV) of a property, minus the repair costs. It is a guideline to help flippers avoid overpaying.

It varies greatly, depending on the property and location. Generally, one would need sufficient capital to purchase the property and cover repair costs, which can start from $70,000 to several hundred thousand dollars.

The average fix and flip project can take anywhere from 6 to 12 months, including the time it takes to purchase, renovate, and sell the property.

A bank statement loan program allows borrowers to qualify for a mortgage using bank statements instead of traditional income documentation. It is designed mainly for self-employed borrowers.

Lenders review 12 to 24 months of bank statements to analyze income and cash flow rather than relying on W-2s or tax returns. This helps in assessing the borrower’s ability to repay the loan.

A bank statement loan for a house is a mortgage program where the lender uses bank statements to verify the applicant’s income instead of traditional methods, facilitating loans for self-employed individuals.

Getting a bank statement loan can be harder than a conventional loan due to stricter requirements, including a higher credit score and larger down payment. It varies based on the lender’s terms.

Down payments for bank statement loans can vary but are often higher than traditional loans, ranging from 10% to 20% or more, depending on the lender’s policies and the borrower’s financial situation.

Someone might get a bridge loan to finance a new property before selling their existing property. This can facilitate a smooth transition between homes by providing the necessary funds in a timely manner.

The cons of a bridge loan include higher interest rates compared to conventional loans, upfront fees, and the risk of being unable to sell the existing property within the loan term, potentially leading to financial strain.

Whether a bridge loan is better than a conventional loan depends on individual circumstances; bridge loans offer quicker access to funds but come with higher costs and risks. Conventional loans may offer better rates but take longer to secure.

Obtaining a bridge loan can be harder compared to getting a conventional loan, as they are typically offered by private lenders who have stricter eligibility criteria, including higher credit scores and lower debt-to-income ratios. It also requires substantial equity in the current property.

The amount you can borrow on a DSCR loan depends on the DSCR ratio set by the lender, which involves your property’s net operating income. Typically, lenders look for a DSCR ratio greater than 1 to 1.25, allowing for a loan amount where the property’s income can cover the debt service with a buffer.

Not everyone can get a DSCR loan; eligibility typically depends on the property’s potential income, the borrower’s creditworthiness, and other financial criteria set by the lender. It’s primarily for real estate investors with good financial standing.

Down payment requirements for DSCR loans can vary widely depending on the lender’s policies and the specific circumstances of the loan. While it is common to see down payments of 20-25%, it is not a strict rule and could be more or less.

A good DSCR for real estate is generally 1.25 or higher. This indicates that the property is generating 1.25 times the annual debt service, providing a cushion in case of unexpected events or vacancies. It shows the lender that the borrower has a solid ability to repay the loan.

It depends on the individual’s expertise and the market conditions. They can be worth it if the flipper can renovate and sell the property at a significant profit.

The 70% rule suggests that an investor should pay no more than 70% of the after-repair value (ARV) of a property, minus the repair costs. It is a guideline to help flippers avoid overpaying.

It varies greatly, depending on the property and location. Generally, one would need sufficient capital to purchase the property and cover repair costs, which can start from $70,000 to several hundred thousand dollars.

The average fix and flip project can take anywhere from 6 to 12 months, including the time it takes to purchase, renovate, and sell the property.