What Credit Score Do You Need for a Competitive Rate on a Fix and Flip Loan?

What Credit Score Do You Need for a Competitive Rate on a “Fix and Flip” Real Estate Investment Loan?

calculate loan rateThe lower your credit score, the higher your rate for a “hard money”, fix and flip loan, right? Not necessarily. At MM Lending, we have been flipping houses as well as funding local, residential real estate investment loans since 2005 … through the extreme highs and lows of the market. The loan rate is all about covering risk, and we have learned that there is another measure of risk – namely, experience – that can count as much as credit score, when quoting a loan rate to cover our risk as the private lender.

It surprises many of our new clients to find that a credit score even below 680 can secure a competitive private loan for “flipping” a distressed property, for a new investor with no experience. It also surprises our new clients who already have experience, to find that their experience earned them a lower rate than they had seen with other lenders (especially with national lenders who don’t have a local market focus).

How much “flipping” experience do you need to get our lowest loan rates?

That is the question, and one for a direct conversation, because all fix-and-flip experience is naturally different. What was that first flip like? The second? What was the market like at the time? How did you do? What did you learn? At MM Lending, we are all about the local private lending experience. It takes a conversation as well as your basic financial review (e.g., credit score, income, cash balance) to evaluate your borrowing risk, and therefore to provide our most competitive loan rate for you. Additionally, we know the neighborhoods, and we know a lot about flipping houses, so our focus is to evaluate – and help you evaluate – good prospective deals in real estate investment.

Two things are for certain when it comes to “hard money” rates and credit score with private funding through MM Lending:

  1. If you are an experienced residential real estate investor who secures loans elsewhere, what do you have to lose – except higher loan rates – by getting a comparison quote from MM Lending? We believe you’ll be surprised by the rates that your experience has earned with MM Lending.
  2. If you are new to real estate investment, you’ll find that a low-ish credit score doesn’t keep you from getting a competitive rate on a fix-and-flip loan at MM Lending. We are already covering risk to a large degree by holding your investment property as a security against your loan. Plus, we like helping new investors, so we’re going to take your particular investment project into consideration and help you evaluate the risk as well.

Call us at MM Lending, 502-400-3011, to quote your real estate investment, “hard money” loans. We look forward to discussing your fix and flip opportunities.