Funding Hawaii Fix and Flip Properties

Funding Hawaii Fix and Flip Properties

Hawaii Private and Hard Money Lending Terms

We previously covered a popular strategy we use to help our Hawaii real estate investor clients obtain the 20% liquid capital needed for the down payment to fund fix and flip property acquisitions. Here we cover the general terms available for financing Hawaii financing fix and flip properties.

Loan To Value:

Many private lenders and hard money lenders will loan up to  90% of the Loan to Value (LTV) towards the acquisition of a Hawaii fix and flip property depending on the investors’ credit score and experience level. Newer Hawaii investors will usually be financed up to 80% LTV. The higher the investors credit score, and the higher the number of previous fix and flips completed, or rental properties owned, the higher the LTV.  Hawaii investors with 750+ credit scores and 5 or more previous fix and flips or rental properties will typically qualify for the maximum loan to value.

Rehab Costs & Maximum Leverage

The rehab costs of the fix and flip are generally financed as well. 100% of the rehab costs are typically financed in the loan.

The maximum leverage with the purchase price and the rehab costs typically cannot exceed 80% of the Loan To Cost (LTC) or 70% of the After Repair Value (ARV). Again, the higher the Hawaii investor’s credit score and the more experience the investor has may result in a higher maximum leverage up to 95% LTC and 75% ARV.

Term:

The standard term for Hawaii fix and flip loans is 12 months. Some lenders may offer 6-month, 18-month, 24-month, or up to 36-month term options.

Eligible Hawaii Properties:

Eligible Hawaii properties typically include attached or detached single family residences, 2 – 4 unit residences, condos, and townhouses. Some lenders will have programs for 5+ unit multi-family properties.

Occupancy:

Most private and hard money lenders will only lend on non-owner occupied properties that are for business purposes only (real estate investments).

Amortization:

Hawaii Fix and Flip loans are typically interest only with a fixed rate for the term of the loan.

Pre-Payment Penalty:

Many Fix and Flip loans do not have a pre-payment penalty and can be paid off at any time. Some may have a short pre-payment penalty period, for example 90 days. In this scenario, a minimum of 90-days of interest must be paid if the loan in paid off prior to the end of the term.

If you have any questions about financing Hawaii fix and flip properties, feel free to give Alliance Commercial Finance a call at (808) 427-7774 or email us at info@alliancecommercialfinance.com. We’d be happy to talk through your specific investment property scenarios and your financing options.

SHARE IT: