Fix and Hold Loans

Fix and Hold Loans

fix and hold loans

Fixing and holding real estate could be a worthy investment if you are doing it the right way. A fix and hold idea can possibly help you retire early by generating enough income from rental properties, and this is where Custom Mortgage comes in.

Custom Mortgage holds years of expertise in providing innovative ways to avail to fix and hold loans and other financing services. Custom Mortgage has a proven track record of enabling real estate investors in building strong rental portfolios with little or even no cash.

Why Go For a Fix and Hold Loan?

A fix and hold loan starts as a fix and flip loan, and once the repairs of the property are complete, the client refinances for long-term financing while subjecting to the lender qualifications, and further hold the property as a rental. And at this point, it is known as a fix and hold loan. There are many benefits of going for a fix and hold mortgage:

Going for a fix and hold loan, an investor has less cash stuck in the property if they turn from fix and flip to permanent financing. This even assists the investors in conserving cash and utilizing it in a better way while purchasing new properties.

Unlike traditional long-term financing where an investor is required to put 20-25% down and doesn’t get any funds for repairing the property, going for a fix and hold a loan you only need to give 10% down and even get 90% funds for the repair.

Getting fix and hold loans from Custom Mortgage helps you in closing much faster than traditional financing and therefore, you can purchase the fix and hold property in no time. This will enable the borrowers to get the loan, refinance in a short period of time, subject to the qualifications, and get a loan easily without any hassle and much effort.

Unlike a conventional lender, that doesn’t provide a loan unless the property is fully repaired and is in rentable condition, availing for a fix and hold loan from Custom Mortgage lets you lend on fix and hold properties that aren’t in rentable conditions.

Fix and Hold Loan Programs

A fix and hold loan program enables the investors or borrowers to draw out money as per their wish and then buy, fix, and hold the specific property. The investor can further decide to refinance or even rent out the property in the future. Before availing for a fix and hold loan program, one must be aware of a few specifications of this loan program:

  • You must have experience with flipping properties, or you must have an active rental income for the last two years.

  • You also need to have a minimum 50K in liquid reserves that include- cash, stock, bonds, and retirement.

  • You can even buy multiple properties with this line of credit. And the standard length of these loan programs is of 9 months.

  • Investor mortgage credit lines- 50K to 2.5MM.

  • Funding for these loan programs is up to 90% LTV of the rehab and purchase.

General Terms of a Fix and Hold Loan

Loan Amount:

100,000 to 2,000,000

Down payment:

10% subject to qualification

Property types:

multi-family residences, single-family residences, townhomes, condominiums, and planned urban developments (PUD).

Terms:

Interest rate is fixed to 10%, the origination fee is 2-2.5%, and there is no prepayment penalty.