You asked…we answered!
Quick answers to all your private money lending questions
Can I get a loan from RFG if I am a first-time flipper with no experience?
YES! RFG works with new investors every day. The real estate investment industry has seen a huge increase in the number of active renovators over the past 10 years. We make it a priority to build long-term relationships with those new to the industry, and are happy to take the time to educate new investors and walk you through the process from start to finish.
What tools do you offer to help new real estate investors?
We have a business plan template on our website that can help keep you on track. The business plan helps you structure how you’re going to approach the project, what your expenses and carrying costs will be, what you expect your resale value will be, and what profit you look to net. A business plan helps you establish ahead of time who your realtor and contractor will be, what your exit strategy will be, and what your arrangements are for the back end of the project. The goal is to not be caught off guard by ANYTHING. The better prepared you are for “what ifs,” the more smoothly your first renovation is going to go. As a rule, RFG recommends that the first renovation project you tackle be small where it’s easy to see what needs to be done – paint, a little exterior landscaping, maybe new cabinets. You don’t want to get in over your head, and take on a project where you need to do a lot of permitted work (moving walls, rewiring, new roof). Success breeds success! Every successful project you complete gives you a leg up in the approval process for your next loan application.
How much money can I borrow?
RFG writes loans for 100% of purchase price and rehab funds, up to 70% of ARV (after repair value). Our COST CALCULATOR will help you compute your potential loan amount. Overall, we generally make loans for totals of $50k – $1M. The value of the property as well as your credit history and your ability to make the loan payments will determine how much you can borrow.
How fast can I get my money?
With you and the seller’s assistance, we typically fund in 14 days or less. Our goal is for RFG to never be the delay in getting your loan closed. Once we have a completed application and your documentation in place, we can pre-approve you. And once we have a clear title, appraisal, and inspection report, we fund the loan.
How much money do I need to bring to the table at closing?
Typically, we expect you to have 8%-15% of your loan total as cash-on-hand so that we’re certain you can cover your closing costs and at least the first 6 months of interest payments. Your loan agent will know the specifics of your loan, your property, and your cash/credit/income profile, and be able to tell you exactly how much cash you will need for your closing.
What are your loan terms?
Please click on the Loan Products tab at the top of this page to see the terms for RFG loan products.
How much money do I need to put down on a property before you’ll give me a loan?
“Staying liquid” is something you will hear Rehab Financial Group preach about repeatedly. That’s why RFG’s 100% Premiere loan product is the best choice for so many investors — it requires NO MONEY DOWN so long as the purchase price plus rehab budget doesn’t exceed 70% of the After Repair Value (ARV). You keep more money in your pocket, which helps you stay liquid for emergencies.
Do you require collateral other than real estate?
Generally, our loans are secured only by non-owner occupied residential investment property. Only in special circumstances would additional collateral be required.
Can I finance my closing costs?
No, you may not finance your closing costs. One of the primary requirements on any of our loans is ultimately the need to have money in various forms of savings that can cover your closing costs and at least 6 months interest reserves.
What are monthly carrying costs?
These are the costs you incur just for owning the property – property taxes, insurance, utilities, etc. You need to be able to afford these, as well as your interest-only monthly loan payments.
Is there a prepayment penalty?
RFG NEVER has a prepayment penalty on our bridge loans! You are permitted to pay off your Fix-to-Flip loan at any time prior to its maturity date without any penalty.
Are there any restrictions on the type of property I can get a loan for?
RFG writes loans for non-owner occupied residential properties or mixed-use properties. Our investor properties are typically for up to 10 units, but can be up to 20 housing units in a single property.
Can I get a loan for a mixed-use property with residential units?
Yes, RFG will write loans for some mixed-use properties as long as there is sufficient residential space to support the loan.
Can I get approved for several loans at once?
Yes! We look at your assets, financials, and your experience to get the whole picture. We could approve you for several simultaneous loans, for a total financing package up to $2M. Every individual property needs to be appraised and inspected, and every loan needs to stand on its own merits, but we have approved our more experienced investors for up to 7, even 12+, simultaneous loan projects at a time. As individual loans are paid off and new loans are taken out, we would need to periodically update your financials to confirm that you have the financial standing to support the loan burden you are taking on.
In what states can I receive a rehab loan from RFG?
RFG makes Fix-to-Flip/Rent loans to individuals with renovation projects in Alabama, California*, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Minnesota (limited), Mississippi, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon (limited), Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah (limited), Virginia, Washington, West Virginia and Wisconsin.
*Limited to a licensed real estate broker. (License must be provided.)
Will RFG lend to an LLC, LP, or corporation?
YES! RFG will lend to a legal entity as long as the principal(s) of the entity have sufficient credit history and will personally guaranty the loan. While most of our Fix-to-Flip/Rent loans are made to individuals, there are often benefits to entering a loan agreement with partners via a limited liability company (LLC), a limited partnership (LP), a corporation, or other formal partnership. Read more about the benefits of a house flipping partnership HERE.
How do I apply for a rehab loan?
Just click on the APPLY HERE link at the bottom of this page, or call us toll-free at 877-643-9066 to begin the application process.
What documents will I need in addition to the application?
Just click on the Loan Products tab at the top of this page, and you’ll see the specific documentation required.
How do I calculate the points and my monthly payment?
Depending on the loan type and borrower qualifications, the points will be 2%-5% of the total loan amount. To calculate the monthly payment, take the total loan amount and multiply by your interest rate (depending on loan type and borrower qualifications, this will be between 0.1199 – 0.159). Divide by the number of months in your term to come up with your monthly payment.
Will RFG provide a proof of funds letter?
Yes, RFG will provide a proof of funds letter after the potential borrower has been financially qualified. The proof of funds letter will be contingent upon further review of the borrower and the collateral.