2021 Top Real Estate Funding For Flipping Programs
By Matt Wilmer and Katie Jessop. June 3, 2021
Getting your real estate investments funded by a top company can make all the difference between profit and loss. Here are some of the best companies we researched.
Finding the right funding partner is as essential as finding a good property. It is also just as difficult. Considerations such as Cost Of Money, your current financial standing such as credit score and cash availability, and background checks make the process time consuming and frustrating.
It is important to know that it generally will cost more to flip a house than to buy one as a home. Flipping is risky for lenders and experience will make a difference: if you do not have it, consider partnering with someone who has experience. Also, remember that flipping does not only cover renovations, it includes the mortgage, taxes, inspections, appraisals, utilities and other expenses until you are able to sell the home. Other costs for flipping include down payments, points, origination fees (expect between 1.5% to 5%), interest rate (Between 3% and 6.5% and up), lender fees, and selling expenses.
It is important to know that it generally will cost more to flip a house than to buy one as a home. Flipping is risky for lenders and experience will make a difference: if you do not have it, consider partnering with someone who has experience. Also, remember that flipping does not only cover renovations, it includes the mortgage, taxes, inspections, appraisals, utilities and other expenses until you are able to sell the home. Other costs for flipping include down payments, points, origination fees (expect between 1.5% to 5%), interest rate (Between 3% and 6.5% and up), lender fees, and selling expenses.
**Most investment lenders do not cover owner-occupied properties**
What if you do not have great credit? What if you cannot prove experience in flipping by providing your name on HUD-1 statements with deposits? What if you do not have the usual required GAP funding, which can be as much as 30% of the deal? You have options, such as asset based lending.
If you are a beginner or experienced investor, our recommendations might be a good place to start your search. In our experience it is best to have options when it comes to funding, so perhaps a combination might be the best route to go.
We evaluated funding companies based on:
Evaluation Techniques
A variety of techniques were used for our reviews, including contacting the companies in our official capacity, as well as using “secret shopper” techniques. We contacted clients insofar this information was available. We also contacted our professional connections in the funding industry, which included some senior banking and government officials.
Bottom Line
A last note, and caution. If you do not have the cash to flip a house without financial help or if you have the cash but want to limit your risk, there are many ways to fund your deal: hard money, private lenders, conventional loans or crowd funding to name a few. Take your time evaluating which option best fits your situation and the property you want to flip.
If you are a beginner or experienced investor, our recommendations might be a good place to start your search. In our experience it is best to have options when it comes to funding, so perhaps a combination might be the best route to go.
We evaluated funding companies based on:
- Cost of funding, program costs and other expenses.
- Verification requirements. Usually this includes credit checks, financial history, employment details etc.
- Experience requirements. Some funding companies require extensive experience (HUD-1 verifiable documentation) while others do not, instead moving to asset based lending.
- Customer reviews. We only considered companies with overall favorable reviews. (Our reviews are separate, meaning not the same as those from customer reviews)
- Accreditations and affiliations, for example how they are reviewed in the news, by the BBB and other organizations.
- Coverage area. Many lenders only fund in specific States. Our reviews took coverage of funding in consideration.
Evaluation Techniques
A variety of techniques were used for our reviews, including contacting the companies in our official capacity, as well as using “secret shopper” techniques. We contacted clients insofar this information was available. We also contacted our professional connections in the funding industry, which included some senior banking and government officials.
Bottom Line
A last note, and caution. If you do not have the cash to flip a house without financial help or if you have the cash but want to limit your risk, there are many ways to fund your deal: hard money, private lenders, conventional loans or crowd funding to name a few. Take your time evaluating which option best fits your situation and the property you want to flip.
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Funding Programs at a glance:
- Keystone Funding Network
- Complete Lending
- Lima One Capital
- Chase
- LendingHome
- 5Arch
- Anchor Loans
- Groundfloor
- Realtyshares
Top Funding Programs for Non-Primary real estate in 2021:
1. Keystone Funding Network
Top overall program offering 100% funding and accepting beginner investors
Top overall program offering 100% funding and accepting beginner investors
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Specifications
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Cost: $
Requirements: ⚠️ Assistance: ✅✅✅✅✅ Coverage: Continental US Type: Creative Lender |
+ 100% funding
+ Includes tools, expert reviews and coaching + Top online reviews + Experience, cash and credit not required - Limited membership availability |
Keystone Funding Network is a program offered by Wealth 212˚. This is the only company we categorized as a "creative lender" which means they offer partner funding, hard money and private funding, and even crowd funding options: "if there is meat on the bones we can find funding" is their motto. They have been in business for over a decade and are best known for “You find, we fund 100% and split the profit.” KFN enters a partner contract with its members, where the terms of the Joint Venture are contractual and enforceable, unlike for example bird-dogging.
We found this to be the program with the highest customer satisfaction and verified client flipping success. Up to $550,000 in funding is available, depending on the area and the property. It is also the only “ true” 100% funding program we found. This is a great option as long as partner funding and profit splits sound attractive to you.
As a creative lender, if a property does not qualify for partner funding - and let’s be honest, finding top deals is the most difficult challenge for investors - KFN has more traditional funding options at most competitive rates: this includes funding 100% of renovation, bridge loans that close in as little as a week, and loan terms from three to 24 months, with rates as low as 7.75%.
A large wholesale network is also available; a hot option in the market as of the date of writing this review. Direct, hands on flipping experts are part of the team with a top notch coaching program as a "free" addition. The main disadvantage of this program is that their member selection process is time consuming and limited memberships are available.
We found this to be the program with the highest customer satisfaction and verified client flipping success. Up to $550,000 in funding is available, depending on the area and the property. It is also the only “ true” 100% funding program we found. This is a great option as long as partner funding and profit splits sound attractive to you.
As a creative lender, if a property does not qualify for partner funding - and let’s be honest, finding top deals is the most difficult challenge for investors - KFN has more traditional funding options at most competitive rates: this includes funding 100% of renovation, bridge loans that close in as little as a week, and loan terms from three to 24 months, with rates as low as 7.75%.
A large wholesale network is also available; a hot option in the market as of the date of writing this review. Direct, hands on flipping experts are part of the team with a top notch coaching program as a "free" addition. The main disadvantage of this program is that their member selection process is time consuming and limited memberships are available.
2. Complete Lending
Top diverse hard money lender with additional consulting services
Top diverse hard money lender with additional consulting services
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Specifications
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Cost: $$$
Requirements: ⚠️⚠️⚠️⚠️ Assistance: ✅✅✅✅✅ Coverage: Nationwide Type: Hard Money Lender |
+ Diverse loan programs
+ Consultations reduce risk + Traditional lender getting creative - Expensive if you are just starting - Rigorous, time consuming application process - Pre-approval can take several weeks |
Great at getting creative to help you save money or get a deal funded that normally wouldn’t have been able to. They have their clients’ best interest in mind, and have a stellar reputation for not just lending money for any project, even if they think the borrower is making a mistake, but projects they think can be successful. We were particularly impressed with their fast response and personal service.
Once you have a relationship, closing periods get lower. They have 100% financing available for qualified investors after meeting typical industry criteria. And like most lenders, higher credit score and larger cash reserves results in better rates and lower costs. Experience results in faster turnaround and, as always, lower costs and rates.
A major factor for their customers is that Complete Lending is a hands-on flipper, and they also own rentals, everything from single family residential to apartments. If they fund it, they’ve done it.
Once you have a relationship, closing periods get lower. They have 100% financing available for qualified investors after meeting typical industry criteria. And like most lenders, higher credit score and larger cash reserves results in better rates and lower costs. Experience results in faster turnaround and, as always, lower costs and rates.
A major factor for their customers is that Complete Lending is a hands-on flipper, and they also own rentals, everything from single family residential to apartments. If they fund it, they’ve done it.
Hard money loans usually have terms of less than one year and interest rates of 12% to 18%, plus two to five points. A point is equal to 1% of the loan amount, so if you borrow $112,000 and the lender charges two points, you would pay 2% of $112,000, or $2,240. (Investopedia, How to get a loan to flip a house)
3. Lima One Capital
Hard money lender who will work with new flippers
Hard money lender who will work with new flippers
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Specifications
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Cost: $$$$
Requirements: ⚠️⚠️⚠️⚠️ Assistance: ✅ Coverage: Nationwide Type: Conforming lender |
+ Loan- to cost 90%, - to ARV 75%
+ Experience (flips in past 24 mo) improves rates + 10% down payment - Low credit scores will result in highest costs (min 660) - Typical up front hard money costs - Pre-approval and application process takes 2-4 weeks |
Lima One Capital is a major hard money lender who will work with novice investors. Typical for major hard money lenders, they fund fix and flip, rental, construction, refinance, multifamily and investment property loans. Based in Greenville SC, they provide loans in 40 states across the US. Founded in 2011, Lima One is a major originator and servicer of Business Purpose Loans (BLPs). Recently acquired by MFA financial, Lima One’s executive leadership agreed to continue management.
Flipping experience will determine fees and interest rates, with rates varying by state. The required minimum credit score is 660, and lower credit scores means lower borrowing ability and highest costs. Also, Lima One requires a 10% down payment and offers repayment terms of up to 13 months.
Their approval process is no longer than usual, but frustrating for many flippers. They are also totally funding focused like all lenders. There is no help on the actual flip, so clients carry 100% risk.
Flipping experience will determine fees and interest rates, with rates varying by state. The required minimum credit score is 660, and lower credit scores means lower borrowing ability and highest costs. Also, Lima One requires a 10% down payment and offers repayment terms of up to 13 months.
Their approval process is no longer than usual, but frustrating for many flippers. They are also totally funding focused like all lenders. There is no help on the actual flip, so clients carry 100% risk.
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4. Chase
Conforming lender for investors who want to maximize self-funding
Conforming lender for investors who want to maximize self-funding
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Specifications
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Cost: $$$$$
Requirements: ⚠️⚠️⚠️⚠️⚠️ Assistance: ✅✅✅ Coverage: Nationwide Type: Conforming lender |
+ Traditional lender
+ Clear requirements + Face to Face options - High credit score requirements - Commercial line of credit - Time consuming application Process |
Most banks offer lines of credit, we picked Chase because Real Estate Investors gave the highest reviews. This isn't strictly funding for flipping, it is more general funding for business owners. Some investors prefer working with large institutions despite the lengthy and challenging application process and costs.
With traditional funding sources like banks, investors tap into HELOCs, savings and traditional loans. The upside is that investors have a traditional institution with whom they have done business. The downside is that these institutions have no care about your flipping investment. You will get no help if you are looking for feedback about the risks involved with your deal. Another downside is the costs. Some investors swear by self funding, which is why we listed Chase as a solid representative of the banking industry.
With traditional funding sources like banks, investors tap into HELOCs, savings and traditional loans. The upside is that investors have a traditional institution with whom they have done business. The downside is that these institutions have no care about your flipping investment. You will get no help if you are looking for feedback about the risks involved with your deal. Another downside is the costs. Some investors swear by self funding, which is why we listed Chase as a solid representative of the banking industry.
Hard money lenders decide whether to make the loan by evaluating the strength of the deal and the reliability of the home flipper. (Lucas Machado, President of House Heroes)
5. LendingHome
Fix-and-flip loans for up to 90% of purchase price
Fix-and-flip loans for up to 90% of purchase price
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Specifications
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Cost: $$$$$
Requirements: ⚠️⚠️⚠️⚠️⚠️ Assistance: ✅ Coverage: Nationwide Type: Hard Money Lender |
+ Fees are competitive
+ Fast funding after approval process + Process 100% online - Credit and experience required - Complex fee structure - Requires cash |
The fees are competitive and include application fees, underwriting costs, origination -, title -, escrow - and appraisal fees. They cover up to 90% of the purchase price and 100% of the rehab, which is fairly standard. Bank statements are required to show they have ability to cover costs such as down payment and closing costs.
You will need a REPC, a list of past fix-and-flips, and cash for down payment. Interest rates are competitive, they do not charge the usual application fees but count on closing costs, depending on the loan they can be as low as $1,999.
You will need a REPC, a list of past fix-and-flips, and cash for down payment. Interest rates are competitive, they do not charge the usual application fees but count on closing costs, depending on the loan they can be as low as $1,999.
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6. 5Arch
Private lender with excellent customer service
Private lender with excellent customer service
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Specifications
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Cost: $$$$
Requirements: ⚠️⚠️⚠️⚠️ Assistance: ✅✅✅✅ Coverage: 30 States Type: Private Lender |
+ Easy navigation on website
+ Simple, loan based funding + Great customer service + Novice investors welcome - Limited service area - Loan focus means cash and credit required |
Even though 5 Arch is limited in the areas they service, it is worth mentioning as a representative of dozens of other great private lenders. The advantage of working with a private lender like this vs. a large bank is their customer service and willingness to make things work. Fees are competitive, and normal cash and a good credit score are required. Unlike nationwide lenders, 5 Star is willing to work with less experienced investors.
An advantage of working with private lenders, is the ability to negotiate payment terms. Confidence and experience will be key in the negotiation process.
An advantage of working with private lenders, is the ability to negotiate payment terms. Confidence and experience will be key in the negotiation process.
7. Anchor Loans
Private lender willing to work with a wide array of investment properties
Private lender willing to work with a wide array of investment properties
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Specifications
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Cost: $$$$$
Requirements: ⚠️⚠️⚠️⚠️ Assistance: ✅✅✅ Coverage: 48 States Type: Private Lender |
+ Easy navigation on website
+ Large Lender + Experienced Staff - Hit and Miss service - Experience required (past 18 months) - Slow to close |
Of all the online private lenders we evaluated, this company had the most reviews. Investors can borrow up to 80% of the cost of the property, and loans can be between $50,000 to $20 million. Down payments are between 10% and 20% (of purchase price). A track record of at least five flips in the past 18 months is required - this means the investor's name on the purchase contract, with accompanying statements. Corporate loans are available with lower track record requirements.
Like most of their competitors, they can cherry pick what they want to fund. This means that investors risk losing a contract because the lending process took them beyond close date on the REPC.
Working with a large organization has benefits and draw backs. Communication was most often cited as the main reason for frustration. In fairness to Anchor Loans, this should be expected by borrowers. Processes have to be followed and can't be dictated by the borrower.
Like most of their competitors, they can cherry pick what they want to fund. This means that investors risk losing a contract because the lending process took them beyond close date on the REPC.
Working with a large organization has benefits and draw backs. Communication was most often cited as the main reason for frustration. In fairness to Anchor Loans, this should be expected by borrowers. Processes have to be followed and can't be dictated by the borrower.
Crowdfunding is a popular way to get loans for just about any project, including real estate investments. These loans are relatively expensive but since the focus is on the asset, borrowers can have multiple mortgages and other financial obligations. (Alex Larsen, COO New Wealth Strategies LLC)
8. Groundfloor
A solution for investors who have multiple mortgages
A solution for investors who have multiple mortgages
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Specifications
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Cost: $$$$
Requirements: ⚠️⚠️⚠️⚠️⚠️ Assistance: ✅ Coverage: 31 States Type: Crowdfunding |
+ Funding up to $1 Mil
+ No tax returns/bank statements for loans under $500k - Slower to close vs hard money or private lenders - 2-4 points and $1,500 closing cost and fee - No inexperienced flippers - Limited service area |
Groundfloor specializes in real estate related investments. A group of individuals and/or institutions will collectively fund loans. This company will close in up to three weeks, no payments during the loan term, and no tax returns or banks statements are required for loans under half a million. Interest rates start at 5.5%, and you will pay a minimum of three months interest even if you pay off the loan sooner.
Working with crowdfunding groups can be time consuming. A lot of companies claiming to be hard money lenders are actually more like crowdfunding organizations where they pull together groups of investors. This explains why approval times can sometimes take weeks, even more than a month. Since the focus of loans is on the quality of the deal and the value of the asset, investors who are financially already extended see this as a solution if hard money and private lenders turn them down.
Working with crowdfunding groups can be time consuming. A lot of companies claiming to be hard money lenders are actually more like crowdfunding organizations where they pull together groups of investors. This explains why approval times can sometimes take weeks, even more than a month. Since the focus of loans is on the quality of the deal and the value of the asset, investors who are financially already extended see this as a solution if hard money and private lenders turn them down.
9. Realtyshares
For experienced investors who want to get to the bottom line
For experienced investors who want to get to the bottom line
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Specifications
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Cost: $$$$$
Requirements: ⚠️⚠️⚠️⚠️⚠️ Assistance: ✅✅✅ Coverage: Limited Type: Crowdfunding |
+ Large crowdfunding company
+ loans from $100k - $10 mil. + Experienced network - Only approves 5% of deals - Short Term Rehab Financing - Not for novice investors |
This is a source for more experienced investors. Research is recommended, but if you qualify this is a top option for crowd funding. Over time a relationship will increase chances for getting funded, and will shorten the approval process.
The company works only with experienced investment companies with a proven track record. The sign-up process is easy and posting investments is quick and painless.
The company works only with experienced investment companies with a proven track record. The sign-up process is easy and posting investments is quick and painless.
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