Fix and flip investments rely on timely funding to complete work quickly and ensure the project’s success. Speedy financing also allows investors to secure lucrative opportunities in competitive markets and maximize deal ROI. As a broker or lending partner, offering investors financing options tailored for fix and flip investing helps your clients succeed and helps you grow your loan pipeline. However, it’s crucial that you choose both the right programs and the right lending partners to facilitate these projects.
Read on as we cover the importance of speed and certainty when funding fix and flip deals, and the steps lending partners should take to elevate their clients’ success in this asset class.
Speed is one of the biggest advantages in a fix and flip deal. It not only allows investors to secure deals in time-sensitive scenarios, but it also lets them start the renovation process faster and perform more flips per year. Fast funding is key for properties that come through off-market channels such as auctions, foreclosures, or distressed sellers. Being able to provide proof of funds and obtain rapid approvals also helps investors win out in competitive bidding scenarios. Brokers can benefit from higher deal volume, and being able to build a reputation as a lender that can fund deals quickly. This leads to better client loyalty, and more opportunities for repeat business.
Certainty is also beneficial for both investors and brokers with home flips. Certainty reduces the risk of falling out of contract or losing earnest money in a deal. It also ensures investors have enough funding to complete their projects without having to dip into personal funds. Investors value lenders who are able to deliver on their promises, without last-minute surprises or shifting terms. That’s why it’s crucial that brokers choose reliable lending partners, who value transparency and reliability when it comes to financing. It can also help you establish stronger relationships with clients, where you become a trusted advisor that can be relied on to help achieve their investment goals.
These two key factors combine to help fix and flip investors succeed more often. Shorter timelines reduce carrying costs such as interest, tax payments, insurance, and utility bills. Investors are able to secure lucrative opportunities when they know funding is certain, and they can move to resale faster, which can be crucial in shifting markets where conditions may change quickly. With fast and dependable financing, investors can scale their operations more reliably and take on multiple projects a year. This not only benefits them, but also you as their preferred lending partner.
The lending partner you choose to work with can have a major impact on your ability to deliver quality service to your clients. A good lending partner will prioritize reliability, speed and communication when it comes to funding a deal. They will also have clear underwriting guidelines which helps to avoid confusion and last-minute adjustments. Look into reviews from both customers and brokers before choosing a partner, since it will ensure a great experience for both you and your clients. You’ll know you are working with a great partner if they provide additional resources to brokers, such as marketing materials, free education, and connections to other real estate pros that can expedite your clients’ projects.
Brokers can utilize the advantages that speed and certainty provide to position themselves as efficient lending partners. You can also build a reputation for reliability and readiness to fund deals efficiently. Highlight these benefits in your marketing efforts to attract serious investors, and build lasting business relationships that grow your loan pipeline.
As always, it’s important to set expectations early when starting the financing conversation with clients. Even the best lenders need appropriate documentation and some time to verify borrower and property details. Having good communication ensures that your clients expectations are realistic, allowing them to fund projects in a timely manner, while also enabling you to build stronger relationships with each client.
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.