Fix and Flip Lender in Illinois (Find One the Easy Way)
If you're looking for a fix and flip lender in Illinois, then keep reading. I'll do a deep dive in this article.
To describe what fixing and flipping is, let’s think of a hypothetical person. Let’s call him Tom.
Now imagine that Tom goes to an open inspection for a cheap house that is for sale. This house is not in very good condition – this is what makes it so cheap. It needs new floors, the ceiling is leaking and the lights do not work. In fact, no one in their right mind would purchase this house and live in it as it is.
Tom is excited – because he is a flipper!
He can see that with a little bit of investment, he will be able to fix the house, and flip it for a profit. If he were to buy the house for $100,000 and spend $50,000 on fixing it up, he could very easily sell it for over $200,000. Leaving a nice profit margin indeed!
Forbes goes on to further describe this process: when an investor purchases a property, remodels (or rebuilds) to add value, and then sells for profit.
Fixing and flipping does seem like a genius idea, right?
A guaranteed money maker?
While this is true if you are careful, there is still an element of risk. You need to have the money upfront to buy the house and to complete the remodel. And of course, you risk the chance of it not selling for as much as you like, losing any potential profit. So, unless you have hundreds of thousands of dollars sitting in spare change, you are going to need a loan to start your venture.
This is where the fun begins, and where fix and flip lenders come into play. This article is concentrating on Illinois so we will be staying local for that reason.
Fix and Flip Loans
Put simply, fix and flip lenders are those that offer loans purely for the buying and selling of property. Yieldstreet describes a fix and flip loan as a type of short-term loan used by real estate investors to purchase and improve a property, to then sell for a profit. These lenders are trusting that you will use their investment wisely to make a profit quickly (within a few months at the most), and to then be able to pay back the loan once the house sells. So, when taking out a fix and flip loan, you need to consider any extra costs that come up, including fees or interest.
Fix and Flip Lenders
So where will you go to get this loan? Banks will often consider such loans to be high risk, so luckily for you, there are several corporations that specialize in fixing and flipping loans.
Here we will review some of the top lenders in the Illinois area, and you will be ready to get started on your new fix and flip venture as soon as possible.
Fix and Flip Lenders in Illinois
CoreVest is one of the most trusted fix and flip lenders in the Chicago area, and their loans are custom built. They understand how the local market works, and how best to mitigate any risk in lending. They have been working with Illinois investors and have been the leading private property lender for fix and flip loans for years, with over $4 billion in loans closed. Although they are based in Chicago, they do offer loans for properties throughout Illinois – from Aurora to Naperville and can be found investing in all major cities in the state.
- Loans range between $150K – $25M
- Will cover up to 90% of cost
- 12-24-month terms
- Foreign nationals eligible
Anchor loans pride themselves on being able to provide loans quickly, as they understand the importance of quick cash when it comes to fix and flip financing. Anchor Loans are the nation’s number one private direct lender for fix and flip investors and were the first to fund over $1 billion in a single year. So, you can be sure that they know what they are talking about and will be able to work with you to see your vision. Fast funding and flexible loan programs are what sets Anchor Loans apart from the competition. Based in Chicago, they offer loans to any area in Illinois.
- Loan amounts between $50K – $10M
- Up to 80% Loan-To-Cost
- Rates ranging between 8% and 13%
Based in South Holland, Illinois, FBC Funding have been assisting fix and flip investors throughout Illinois for over 20 years. They have a deep understanding of how the market works and can assist in more than lending money – by giving expert advice and assistance. They specialize in Hard Money Loans (shorter-term, high-value loans designed for initial property purchases), as well as Rehab loans (for updating existing properties).
- Loan amounts vary (up to $250,000)
- Up to 90% for purchase (and 100% for rehab)
- Rates ranging between 10% and 12%
- Payments and rates vary depending on amount borrowed and whether the loan is Hard Money or Rehab.
Getting ahead in today’s fast-paced investor climate can be tricky, and many people are turning to the fix and flip to make some real money.
The results are not immediate, as the renovations required can take months, however, if you are clever in choosing the right lender and right property, the rewards can be huge. And if you have an interest in renovations and seeing an old house become new again, then this could be just the money-making hobby for you!
As mentioned, getting a loan to start your new fix and flip adventure can be one of the main roadblocks, so it is important that you do your research, and get yourself a loan that is right for you, with a company that you trust. Investopedia goes into more detail about the process of getting a fix and flip loan and mentions that while most lenders do see fixing and flipping as being risky, if you can make them see your vision, they will often be on board and willing to work with you.
So do your research, find the best lender for you, and most importantly, read reviews. There are several lenders in Illinois that understand the unique needs that a fixer and flipper have, so if you were to have a chat with any of the lenders reviewed here, then you will be in the best of hands.
Charles is the founder of infoSpike.com. His real estate investing experience started in 2004 and he is currently focused on rental property projects. He enjoys learning about real estate investing, personal finance, and marketing. Read more about Charles here.