Ask Cornerstone: I only have a small down payment. How would I create a business plan to get financing for fix-and-flip or fix-and-hold investments?

fix and flip loan for beginner

How do I create a business plan to get financing for fix-and-flip or fix-and-hold investments? I want to make it strong because I only have a small down payment but I have a steady job, good credit, and have great resources to be able to fix it up. I don’t currently own a home. My son is an electrical contractor and my husband has been fixing houses for an investor for years. Their experience will really help strengthen the business plan.

Since you are just starting out and don’t have the capital that a bank or private money lender would require, I would suggest another approach.  You will likely not be able to secure a commercial or hard money loan. Buy a home for yourself as your first investment instead.  Live in it while you fix it up.  The biggest advantages to this are in the low interest loan and low down payment (about 3.5%).

As your equity increases from the improvements and the market, you can refinance or sell the house to have investment capital.

If you don’t feel like that is an option for you, find a financial partner to provide the down payment. Build the foundation of your business plan with a business plan creation software (executive summary, SWOT, team member resumes… etc) and then use the specifics of a property you are pursuing in the financials.  Also, find out what your lender requires.

Check out this post on a similar topic to yours for some more information: How to Attract Hard Money Lenders to my Project

Use our flip calculator to help you analyze a deal and present the figures that most lenders want to see.  You can download it here. 

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