What is fix and hold loan?

If you have ever used a “Fix and Flip” loan, then you may have also heard of the “Fix and Hold” loan. At investorprivatemoney.com we offer “Fix and Hold” loans through our private lender sources for our investors who wish to buy, fix and then hold the property to build their portfolio of rental properties.
Use a “Fix and Hold” loan to Build a Rental Portfolio
The “Fix and Flip” short term loans are for properties that investors buy, renovate, and sell off in a short period. The “Fix and Hold” loan is utilizing the same “Fix and Flip” short term loan but after the property has been renovated the investor holds the property as a long-term income property for either its appreciation and/or cash flow.
Investorprivatemoney.com “Fix and Hold” loans can come in handy when the investor needs money to re purpose or renovate a space. This would work well for a town home or a commercial property much the same. The “Fix and Hold” loan would offer the means to convert a space and any other changes or repairs before placing the property up for rent.
Fix and Hold Loan versus a traditional market loan
Real Estate Investors are turning to fix and hold loans rather than traditional loan resources to build up their rental portfolio because it benefits them by not having to have so much of their own cash tied up in the investment property.
Real estate investors are not typically getting traditional mortgages on their investment properties in the marketplace today because of the strict funding criteria traditional lenders have on non-owner-occupied properties. Traditional mortgages require a high percentage of skin in the game, upwards of 20-25%. They also require that the property be in rentable condition at the onset and do not offer funds to make any required repairs to make a property marketable. Not to mention that they can take weeks to process and close when time is of the essence. All this can take an investor out of the game when it comes to acquiring a property while they may be competing with cash offers on a discounted property or REO’s (real estate owned) that are being offered at lower than market value due to their condition.
The benefits of qualifying for investorprivatemoney.com “Fix and Hold” loans is that the loan criteria is more relaxed because it is a privately funded loan, without as stringent guidelines. These type loans also offer more flexibility as far as the required amount of skin in the game, which is generally half and possibly less than traditional funding sources. The investor will be able to also get funds to make required repairs, can close in a much shorter period and the loans can later be converted to traditional financing.
The key here is time and money. With a investorprivatemoney.com “Fix and Hold” loan an investor can act quickly to the market, keep more cash in their pocket for more deals and have the cash on hand for any renovations and or repairs. To get the property ready to market.
Simplicity of a Fix and Hold Loan
“Fix and hold” loans always start off as “Fix and Flip” loans which offer generally quicker funding than traditional mortgages. They also offer the money needed to make any renovations or repairs. When the investor has completed the needed updates then the loan becomes a “Fix and hold” loan when it is refinanced to a long-term traditional loan. Thus, helping the investor use the property in their rental portfolio.