In 2023, over 300,000 single-family homes and condos were flipped in the United States. With numbers rising in 2024, funding for investment real estate–particularly fix and flip loans–are a hot commodity.
Let’s look at some of the alternative means to acquire fix and flip funding and break down why mortgage brokers with loan flexibility and speed exceed the unique needs of real estate investors in the fix and flip market:
How to Get Funding to Flip a House the Slow and Risky Way
Conventional Loan
HELOCs
Home equity lines of credit (HELOCs) and refinancing loans can enable investors to bypass long and complicated loan approval processes and often have relatively low interest rates. Unfortunately, these options require investors to own a property with equity and, should any unforeseen obstacles arise that slow the selling process, borrowers leave themselves vulnerable to foreclosure.
Crowdfunding
Fortunately, there are better options for investors and private mortgage brokers.
The Power of Private Funding for Real Estate Investors
Flexible Financing
Unlike the excessive red tape accompanying traditional mortgages, private mortgage brokers have the freedom and flexibility to tailor the perfect fix and flip loans for beginners, experienced flippers, or real estate enterprise investors.
Fast Approval Processes
The absence of governmental and institutional oversight enables private lenders to streamline the loan approval process. This provides fast and reliable capital for investors looking to quickly pounce on their next venture.
Control Over the Sales Price
Fix and flip financing through private brokers covers an investment property’s purchase, construction, and repair costs at lower interest rates, allowing investors to offer properties below market value while maintaining a high return on their investment.
No Pre-payment Penalties
While loans on houses from traditional lenders penalize borrowers for repayment before a loan matures, private broker loans encourage quick repayment by eliminating prepayment penalties.
Minimum Requirements
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Metric
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Description
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LTV
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Compares loan amount to property’s current market value
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LTC
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Compares loan amount to the estimated total project costs.
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ARV
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Projects the value of the property post-renovation.
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Leveraging Table Funding to Scale Your Mortgage Brokerage Business
What is Table Funding?
The private lending market, once a Wild West of sorts, had long been dominated by entrepreneurs looking to raise capital in informal, non-institutional, and risky ways–that often came with minimal checks and balances and significant risks. That is until established capital providers like Finance of America Commercial (FACo) introduced the structure, discipline, and benefits of institutional capital to the private lender sector through table funding programs.
FACo’s Third Party Originator (TPO) Program is a form of white-label table funding that allows you to elevate your business with less risk. Through TPO, mortgage brokers gain access to FACo’s team of loan experts, providing a superior overview of the loan origination process and loan performance.
In addition, mortgage brokers receive:
- White-label documents & portal access for all loan officers
- Control over deal pricing
- Direct access to processors and underwriters
- Free credit and background checks
- A unified overview of the entire loan pipeline
Your clients will also benefit from FACo’s TPO program. With limited platform access, borrowers have:
- The ability to order draws, extensions, and payoffs
- More transparency throughout the loan process
Through table funding programs like FACo’s Third Party Origination, private lenders save time and have the liquidity available to explore bigger and better ventures. With the right capital partner, private lenders are able to provide better service to their clients, allocate more funds to other aspects of the business, and have more peace of mind as they grow.
