Real estate investors use these short term loans to fix up run down properties and eventually sell them for a profit.

These loans are also often referred to as bridge loans, hard money loans or private money loans.

Hard money lenders evaluate each deal independently and use a criteria based upon the following factors:

• loan to value ratio (LTV)
• FICO score
• experience in the industry

Fix and Flip Loans:

• are for shorter durations, 12 to 60 months
• have fixed rates
• interest only
• can qualify in 5 to 7 days
• less paperwork and qualifications
• more focus on the asset

Bank Loans:

• longer durations, 20 to 30 years
• variable or fixed rates
• usually amortized
• longer time to qualify, generally more than 30 days
• much more paperwork and qualifications
• focused on the borrower and the asset

These short duration loans (12 to 60 months) are more expensive than traditional bank loans, however there are many appealing advantages for fix and flip investors:

• there is considerably less red tape
• hard money lenders can deliver funding in much shorter time frame
• you don't have to pay huge pre-payment penalties if you close out the loan early
• a private money loan can stand out as a positive to sellers as it's often considered the same as an all-cash offer

While fix and flip loans are more expensive, they provide tremendous upside to a fix and flip investor who needs to capitalize and close deals in hot market place or create leverage between flips.

• Crescent Lenders' interest rates are generally from 7.99% to 9.49%
• our origination fee is 1 to 4 points of the original loan amount
• our underwriting fee is $1500
• appraisal fee may also be required

The approval process involves:

• a brief phone call, to collect general background information regarding your financing needs and history
• after this pre-approval phone call your information will be verified through our underwriting process
• once verified we will send you a term sheet and if you accept, you will receive the funds in your account

Our loans start at $200K and go up to $5 Million.

Yes, absolutely.

Hard money lenders have less bureaucracy and requirements than big banks.

They mostly care about the value of the collateral being used to secure the loan.

It's not unheard of for borrowers to get funding in less than a week.

This rule states you should purchase the property for more than 70% of the after repair value (ARV).

This is dependent upon numerous factors:

• what city you flip properties in
• the number of properties you are able to flip in a given year
• your experience (the fewer mistakes and the better you know the market will dramatically increase your margins)

It's common for seasoned investors to have profit margins of 15% to 35%.

However, like any business, you can also lose money.

Investors can start with anywhere between $10,000 and $20,000 dollars if they want to magnify returns they can use a hard money lender.

It's advisable to work with a seasoned professional to start out. This will give you the confidence, contacts and knowledge to successfully flip on your own.