5 Ways to Close More Deals with Fix and Flip Financing

Fix and flip investing has proven to be a reliable strategy for achieving returns in today’s high interest rate environment. However, with the first interest rate cut of the year finally happening, the strategy is only set to grow in popularity as returns get even better for most projects. As a broker or lending partner, helping investors effectively secure financing for these deals will become a key part of your business pipeline. Knowing the ins-and-outs of fix and flip financing is crucial to finding success with this asset class, but you will also need to implement purposeful strategies to gain new clients.

Read on as we share five actionable strategies brokers can use to leverage fix and flip financing to grow their businesses in today’s shifting market environment.

Strategy #1: Understand The Needs of Fix and Flip Investors

Every successful client relationship starts with sitting down and really getting to know their goals. You will need to understand what they’re trying to achieve if you want to be able to give relevant advice and effectively guide their strategy. For example, while many investors will be looking for a loan with the lowest interest rate possible, others may be looking for speed and a streamlined underwriting process so they can get to work sooner. Asking the right questions up front helps position you as a trusted investment advisor. Plus, understanding what an investor’s timeline looks like and what they value helps you recommend loan products tailored to their specific deal scenario.

Strategy #2: Offer Flexible Financing Options

In order to match investors with the right financing program, you’ll need to be able to offer a variety of loan options designed from home flipping. As mentioned, fix and flip investors do value speed since it helps them get deals done faster, but they also value flexibility. Partnering with a few different lenders who offer fix and flip financing is the best way to meet each client’s needs. These lenders offer programs with flipper-friendly features such as interest-only payments, faster closings, and shorter loan terms than traditional mortgages. They are also more willing to customize loan terms so you can meet the needs of any particular investment scenario.

Strategy #3: Educate Investors on Market Trends

Being a broker isn’t just about providing investors with financing; they also rely on you as a key investment advisor. That’s why one of the best ways to build lasting relationships with clients is by offering relevant advice on the market which maximizes their investment strategy. Utilize data aggregators such as ATTOM Data and REI DealMaster to provide clients with accurate info on local markets and even specific neighborhoods. These sources can help you understand which direction home prices are headed in an area, and even help you compare ARVs on previous flips which allow your clients to determine whether an investment is viable. The more information you can provide to clients, the more confident they can be in their projects and your position as a trusted investment partner.

Strategy #4: Streamline the Loan Process

Providing your clients with a quick and easy loan process ensures a smooth financing experience, and makes them more likely to return to you in future scenarios. For fix and flip deals, speed is especially important, since it reduces the amount that investors need to pay in holding costs.

You should build systems to help you reduce delays at every step of the process: pre-qualify investors by asking important questions early, use document checklists to ensure all necessary items are gathered, and utilize tech-driven platforms to facilitate all loan activities. Most importantly, be sure that you’re working with a lender who prioritizes speed, and can offer fast underwriting and quick turnaround times.

Strategy #5: Build Long-Term Relationships

Experienced brokers know that it’s easier to gain repeat business from existing clients than to spend time and effort acquiring new clients. That’s why it’s crucial you tend to your existing client-base, since it helps you build lasting relationships where you become an investor’s go-to financing provider.

Some strategies you can utilize include follow-up calls after a deal has closed (say within 30 days), creating a social media following and sharing market updates or success stories, or building an email list and reaching out with deal finds/exclusive financing offers. Implementing a smart retargeting strategy helps you stay top of mind, and you’ll be the first person clients turn to when they move on to new fix and flip projects.

RCN Capital

In order to maximize the returns on your clients’ investments, partner with a lender that can provide you with the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors and lending partners. If you are looking to offer fix and flip financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.