Using Experience for Lower Interest Rates

As you look to grow your real estate investing business, how can you obtain a lower interest rate for your deals? Being stuck with your current lender’s same interest rate, regardless of your experience as an investor, can be frustrating and throttle the growth of your business.  What options are available to you as you look to grow your business? In this post we’ll explore three factors that will help you obtain a lower interest rate and grow your fix-and-flip business.

1) Show Past Flip Experience

One thing you can do to get the lower interest rate is to verify your flip experience. You can verify your flip experience by showing both the purchase and sale HUDs of each of your properties. If you’ve done anywhere between 5-15 flips within the last 24 months, you can expect a lower interest rate than if you’ve never done a flip before. Fix-and-flip experience is critical for having a lower interest rate because it proves that you have a good understanding of the industry and have successfully fixed and flipped multiple properties within a short period of time.

2) Strong Credit

Having a good credit score is another key factor in getting a lower interest rate. When you factor this in with your experience then you can expect to have a lower interest rate. Typical minimum credit requirements start at 600. If you’re looking for even lower interest rates then your credit score will need to be higher, in the 680 range. Credit score is an important metric for qualifying for a loan because it shows how reliable you are at making payments on time and in the full amount. The higher your credit score, the more trustworthy you appear to a lender.

3) Cash On Hand

Another factor that will help you get a lower interest rate is the amount of cash on hand that you have. Showing that you have money in reserves proves that you are able to make your monthly interest payments, and afford to have a back-up plan in case any unforeseen issues arise. Cash on hand requirements usually start at $15,000, and can vary based on the loan amount. Combining your cash in reserves with your flip experience and credit score, you’ll be able to obtain a lower interest rate.

These three factors can help you obtain a lower interest rate on your fix-and-flip projects, and in turn, help you grow your business. As you grow and expand your business, you’ll need the access to fast, reliable capital to keep up with your demand and a lower interest rate can open that opportunity up to your business.

Lima One Capital is the nation’s premier lender for real estate investors. We make it easy to finance all of your fix-and-flip projects, rental properties, and multifamily investments. We’re a national lender lending across the country in 41 states and the District of Columbia. We take great pride in being a part of the process in helping investors pursue their entrepreneurial goals. If you have any questions about Lima One Capital or our fix-and-flip program, click here.

 

Lima One Capital, LLC. NMLS ID # 1324403, 201 E. McBee Ave. Suite 300. Greenville, SC 29601. Lima One Capital, LLC is not currently licensed in AK, ID, ME, MT, ND, NV, SD, UT or VT. Lima One Capital, LLC is licensed or exempt from licensing in all other states. Minnesota: This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat. §47.206(3). Lima One Capital, LLC is licensed in Arizona as a Mortgage Broker (License No. MB-0936439) and Mortgage Banker (License No. 949706). Lima One Capital, LLC is licensed as a California Finance Lender under Department of Business Oversight (License No. 60DBO-45834). Lima One Capital, LLC is licensed in Florida as a Mortgage Lender (License No. MLD1555) and Mortgage Servicer (License No. MLD1662). Lima One Capital, LLC is licensed in Oregon as a Mortgage Lender (License No. ML-5397). Annual percentage rate may be increased after fixed-rate period expires. Loans are subject to additional underwriting criteria.