Chicago Fix and Flip Loans: Good Options for 1-4-Unit Properties

Chicago Fix and Flip Loans for 1-4 Unit Properties

Chicago fix and flip loans and traditional conventional lenders don’t quite mix. It is not that their interest rates are high, they just do not do them.

But Chicago and its suburbs are a big market for fix and flip loans. So, many non-traditional lenders have stepped in. As it is the case with other non-QM loans, the rules vary lender by lender.

They are, of course, basing their loan amounts on the future, as-repaired, value of the property. Some will consider 2-4 unit properties; some will not.

Most have a minimum loan amount of $100,000, a few go lower, as low as $50,000.

Because of the Coronoa Virus and the market reactions to it, some had paused their programs. They are back, with a few more restrictions.

If you’re interested in getting a loan for a fix and flip property, call me at 847-840-8884 to find out more about your options.

Chicago Fix and Flip Loans Possible Issues

Chicago Mortgage Specialist for Fix and Flip Properties

These investor loans are for 12 months. At the end of 12 months, borrowers have to sell or refinance these loans. That means that, within 12 months, the property value has to be such that the property can be sold at a profit. Basic concept, everyone gets it.

But some people misestimate their abilities or market value.

The first one causes trouble towards the end, when they’re approaching the deadline and there’s still too much work to be done. The second one causes problems from the beginning: the lender’s appraiser comes in with a lower value and the loan amount gets cut.

Another issue some investors have is with setting up the draw schedule and, equally important, filling out the draw paperwork correctly. More precisely, they change their mind about what needs to be done, after they got the loan, then they want the lender to change the scope of work and lend more money.

If you’re have experience, you don’t make such mistakes, right? Except that some investors do, even investors that have done 5 or 6 flips, in my experience.

Chicago Fix and Flip Loans Are Available For:

Any 1-4 unit rental property (single family house, 2-4 unit building, condo, townhouse). Some of our lenders will lend against mixed use properties too. Most have LTV’s of 75% or less of future value and allow either individual or LLC ownership. Some lend to foreign nationals too.

If you’re interested in getting a loan for a fix and flip property, call me at 847-840-8884 to find out more about your options.


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