Rehab and Fix-and-Flip Loans in Dewey Beach, DE
Specialized loans covering both property acquisition and renovation costs for resale projects.
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Contact us today to discuss your rehab and fix-and-flip loans project in Dewey Beach and learn more about our specialized financing solutions.
Frequently Asked Questions
What is ARV and how does it affect my loan amount?
ARV (After Repair Value) is the estimated value of a property after all planned renovations are completed. Hard money lenders typically loan 70-80% of ARV, allowing you to finance both acquisition and renovation. For example, if a property's ARV is $300,000 and the lender offers 75% ARV financing, you could borrow up to $225,000. If your total project costs (purchase plus renovation) are $200,000, you could complete the project with minimal out-of-pocket cash.
How do renovation draws work?
Renovation draws disburse construction funds in stages as work is completed rather than providing all funds upfront. Typical draw schedules include: initial disbursement at closing for acquisition, subsequent draws upon completion of specific milestones (rough-in, drywall, flooring, final completion), and final draw after final inspection. Each draw requires an inspection to verify work completion before funds are released. This protects both lender and borrower by ensuring proper use of construction funds.
What happens if my renovation costs more than expected?
Cost overruns are a common fix-and-flip challenge. Quality hard money lenders structure loans with contingency reserves (typically 10-15% of renovation budget) for unexpected issues. If costs exceed the contingency, you may need to contribute additional cash or request a loan increase if the project remains viable and ARV supports additional financing. Maintaining cash reserves and obtaining thorough pre-purchase inspections helps minimize overrun surprises.
How long do I have to complete the flip and repay the loan?
Fix-and-flip hard money loans typically have 6-12 month terms, with extensions available if needed. The timeline should accommodate acquisition, renovation, marketing, and sale. Interest-only payments during the term keep carrying costs manageable. Most lenders expect projects to be completed and loans repaid within the original term, but reasonable extensions are usually available if projects encounter unexpected delays.
Do I need construction experience to get a fix-and-flip loan?
Construction experience is helpful but not always required, especially for first-time flippers working with experienced general contractors. Lenders evaluate your overall project understanding, contractor qualifications, and realistic budgeting more than personal construction skills. First-time flippers may qualify for slightly lower leverage or need to provide more detailed documentation, but hard money remains accessible to investors at all experience levels.
Other Property Types
Residential Real Estate
Hard money loans for single-family homes, condos, and residential investment properties.
Commercial Real Estate
Financing for office buildings, retail spaces, industrial properties, and commercial investments.
Investment Properties
Loans for rental properties, income-producing assets, and portfolio-building investments.