Fix & Flip

(Construction and Renovation Loans)

An investor or rehabber can use private financing when planning to hold the investment property for a short period of time, such as during construction or renovation. The typical loan to value ratio is up to 80% with the lender taking an equity interest. Typical loan terms call for repayment in one to two years. Disbursements are often made periodically to the borrower according to a construction holdback agreement signed at the loan closing. When the project is completed and the property is sold, the private lender is paid off.