How Brokers Can Give Fix and Flip Investors a Competitive Edge

Fix and flip investing is becoming an increasingly viable strategy in today’s low inventory real estate market. It gives investors a chance to bring much needed homes into high-demand areas while also making a tidy profit. Generating a solid return is not always easy, however, as competition and rising prices often derail an investor’s plans. This is where brokers come into the picture. As a lending partner, you play a crucial role in connecting investors with the right opportunities and financing options.

Your clients will be looking for speed, responsiveness, and reliable financing from you. Continue reading to learn about how you can provide your clients with a competitive edge in today’s dynamic fix and flip market.

Identifying Profitable Fix and Flip Deals

Right from the get-go, you can better position your clients for success by helping them find more profitable fix and flip opportunities. Assist your clients with due diligence by comparing a few different markets and areas so they can identify high demand areas to invest in. Then, you can help them find the perfect property. The best homes to flip will be older or neglected homes that are undervalued but still located in great neighborhoods. These properties have the maximum upside potential, as they can grow in value to match the surrounding homes. It also ensures that your clients can generate a substantial return.

Navigating the Financing Landscape

Connecting clients with high-quality loan financing options allows them to fund their projects effectively and can even save them money. For home flipping, traditional mortgages may not always be suitable, as they have long loan periods and they don’t provide funds to cover renovations. Luckily, there are other choices available to fix and flip investors. Private lending options, including hard money loans and bridge loans, are often better for these types of projects. They can cover renovations on top of acquisition costs, and since they are backed by collateral, lenders are more flexible and faster with loan approval. For instance, borrowers can still be approved for a loan even with less than stellar credit or non-W2 income. These lenders are also more willing to tailor loan terms, such as offering interest-only options to help maximize the amount of capital available during the project.

Speed and Certainty: Giving Investors an Edge

Any seasoned investor will tell you that speed is the name of the game in a competitive real estate landscape. Investors need fast, reliable funding to secure properties before the competition, and they rely on lending partners like you to obtain it. To achieve this, it’s important to build strong working relationships with financing providers. Not only does this help streamline the loan application process, but you can also gain access to other benefits like better terms and other resources that ensure your client’s success. Once you have quickly secured funding for your client, you can help them submit competitive, non-contingency offers on properties that are more likely to be accepted by sellers.

Supporting Clients Through Renovation and Resale

Another way to support clients is by helping them plan their projects more effectively. Encourage them to create a detailed budget and timeline and help them avoid delays by staying in regular contact and prioritizing their draw requests. Utilize your personal network to connect them with trusted professionals, including contractors, photographers, and real estate agents. And when it comes to the time to list, stress the importance of good visuals and a detailed list of how much work went into revamping the home to help catch the attention of browsing buyers.

Post close, you can check in with your client to review how the project went and discuss the next steps. Many fix and flip investors go on to reinvest their returns with larger, more long-term projects (or just another home to flip) and this is a great opportunity to get that conversation started.

Building Long-Term Relationships with Flippers

Speaking of which, fix and flip borrowers often go on to become your best clients. Offering loan programs specifically designed for them gives you more chances for repeat business. You can also create systems to better serve these clients, like for project planning and closing on properties faster. Every project serves as an opportunity to grow your client base and become more versed in the world of home flipping, where eventually your expertise can be relied on to help clients maximize their investment potential.

RCN Capital

To help your clients maximize the returns on their next investment, 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 multifamily financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.