Los Gatos Fixer Upper

Los Gatos Fixer Upper

Are you interested in Silicon Valley fixer uppers?  Do you watch any of the HGTV shows on fixer uppers? Our favorite is the Property Brothers where they convince the home owners to purchase a fixer upper instead of a fully remodeled home.

But that’s TV, what about real life where the investors of these fix-and-flip homes needs loans based on the future or after-repair value of your home is tough.

Well, some lenders might have been watching the same HGTV shows and these loans are also become more main stream.   They are  being called fix-and-flip financing.  These loans have the following criteria:

  • LTV:  Up to 65% of the After-Repair-Value:  This mean that if your homes’ after repair value is $1M, then you will qualify for $650,000.
  • Loan Amount: $35,000 & Up
  • FICO score:  Not Score Driven
  • Refinance an “all cash” or “bridge” purchase

We are not sure how the funds are distributed.  If these loans and require repayment during the life of the construction, then you have to be very careful with your construction calender since the monthly payments can destroy your ROI.

However, if these are structured like construction loans, then you will only be making payments on the money that’s being used and not the full amount of the loan.  Either way it’s good to see that Uncle Sam’s FHA rehab loans now have competition in the private sector where investors need capital to fix-and-flip homes.