Distressed Investment Property Loans in Tennessee
What is a distressed property loan?
A distressed property loan is a short-term loan to purchase and renovate a property in need of significant repairs and then sell it for a profit. Here’s a complete guide to fix and flip loans for beginners.
How do I get a distressed loan?
If you have a credit score of at least 660 and want to purchase a distressed investment property in Tennessee, contact us or call (512) 399-4476.
How do fix and flip loans work?
Fix and flip loans use the after-repair value ratio (ARV) to calculate the maximum loan amount. The lender will predict the market pricing of a real estate property after repairs have been completed. Depending on interest rates, down payment and other lender factors, expect the maximum LTV to be 75%.
For example, let’s say you want to finance a $100,000 fix and flip property. The lender estimates it’ll be worth $200,000 after repairs. This means the maximum a private lender will lend you is $150,000.
The additional $50,000 will come in the form of construction draws. Since the maximum LTV is 90%, you’ll need a minimum down payment of $10,000 for the $100,000 real estate property.