Property investors that are fixing and flipping properties are the most common customers of our fix & flip loans. Anyone buying a distressed property with the intent to rehabilitate and resell it is a potential customer for us.
The first step is to complete a loan request form. This form is simply a way for us to assess your needs, and is neither an offer to make a loan or a final application for a loan. If we believe there is a viable deal, we will you send a term sheet and request a $2,500 deposit.
An initial term sheet will outline indicative terms and a proposal containing the deal structure and all key closing costs. If you decide you would like to continue with the process, the first step would be to obtain an appraisal. You would incur the appraisal cost (paid directly to the appraiser), which varies with the type and size of the property, as well as the appraiser and the location. You will not be asked for any funds from us until we send you a final term sheet outlining the final deal structure and all deal costs.
While there are no upfront documentation requirements per se other than the initial loan request form, it is helpful to provide a deal summary, a purchase contract, and a proposed scope of work. The more you provide upfront, the easier it is for us to make an ultimate decision on whether we can offer you a loan.
Our loan structures vary and are customized to your needs. Nevertheless, if we had to name a typical structure, it would be a one year loan with no principal amortization until maturity.
The majority of our loans are first lien, senior secured loans. However, we will evaluate mezzanine positions on a case by case basis.
Yes, on a case by case basis.
Yes. We typically lend up to 100% of the construction costs on a project.
Construction funds are disbursed through reimbursement of expenses. A maximum amount is set at loan origination, but funds are disbursed only as and when the borrower has demonstrated that the work has been completed to our satisfaction.
Once a borrower requests a draw, one of our licensed contractors inspects the work completed -- typically within 48 hours. Generally within 5 days after the inspection, funds are released. There is usually a $175 charge for each draw that is deducted from the construction escrow, which goes directly to our inspectors who ensure that the work is done properly and within code.
We do not have a minimum credit score requirement. However, we do examine our borrower’s credit and look at payment patterns. If your credit is poor, we will look for other parts of the deal that make it safer for us to lend to you. That said, borrowers with FICO scores greater than 680 may qualify for lower rates.
We work with FCI Lender Services to service our loans. You will receive a full welcome package with instructions directly from FCI within 2 – 3 weeks of closing. Your first payment will be due on the 1st of the month, and future payments are generally automated and paid via ACH.
To request a payoff, please have your recent statement or account number ready and make a request directly with our servicer, FCI Lender Services. RD Advisors generally cannot process a payoff directly because the servicer maintains your daily account balance and year-end interest tax reporting.
Loans are made in our discretion and depend on a variety of factors, including the borrower’s experience. We can potentially lend up to 85% of the purchase price and 100% of construction costs, or up to 75% of the after repair value (ARV).
Although we concentrate in certain states and areas in the Northeast, we will consider loans across the country on a case by case basis.
We currently make fix & flip loans at rates between 7.95% and 12%. Please note that this may not reflect your rates, and that these terms may change at any time. In addition, actual rates and other terms may vary based on approval criteria, including but not limited to FICO score, credit and background checks, previous experience, and period of ownership.
The following property types are eligible for our fix & flip loans:
- Single Family Residences (SFRs)
- Multifamily Properties
- Mixed-Use Properties
- Commercial Properties (highly selective)
What are the minimum and maximum loan amounts for fix & flip loans offered by RD Advisors? expand_more
Currently, our fix & flip loans have a minimum principal amount of $200,000 and a maximum of $3,000,000. These amounts may change at any time and RD Advisors may make exceptions in its sole discretion. Actual amounts offered and other terms vary based on approval criteria.
We do not have set income requirements for borrowers, but they must be able to demonstrate the ability to make scheduled interest payments.
Our documentation requirements vary, depending on, among other factors, the type of loan requested, the nature of the collateral and the borrower, the underwriting requirements and conditions, and the results of our due diligence and background checks. Once we have issued a term sheet, we will ask you for the following, at a minimum:
- A completed due diligence package
- Sales contract (on purchase)
- AML / KYC documentation, including an operating agreement, a certificate of formation for the borrowing entity, and personal identifications of all underlying principals
No. Currently, we only provide loans for commercial purposes collateralized by investment properties that are not owner-occupied.
No. There is typically no prepayment penalty on our 12-month fix & flip loans. Nevertheless, our funds do require a minimum of 3 months of prepaid interest, which you would forfeit if you repay early. This minimum can often be higher, and can change over time. Terms may vary based on approval criteria, including but not limited to FICO scores, credit and background checks, previous experience, and period of ownership.
Yes, we lend to borrowers with all ranges of experience.
Yes, to proceed with the evaluation process, RD Advisors typically requires a $2,500 deposit. That deposit is credited toward closing costs when the loan ultimately closes. There is also a drawdown inspection fee (typically $175 per drawdown), a legal fee (typically $1,500), a fee for the appraisal / budget feasibility review (typically $510, varies depending on property type), and a fee for credit / background checks (typically $180). These fees may change at any time, and may or may not be applicable to you. Actual fees may vary based on various approval criteria or in RD Advisors’ sole discretion. Please reference your term sheet for applicable fees.
What is the typical turnaround time on a fix & flip deal from the time it is submitted to when it funds? expand_more
Turnaround times vary from deal to deal, and depend on various factors . . . including your responsiveness. We have closed deals in as little as 10 days from the time a client is onboarded. We cannot guarantee a turnaround time.
We decide to lend in our sole discretion, and as such, there are properties we do not lend on even if they meet all our criteria. Generally speaking, our funds currently do not lend on primary residences, mobile homes, co-ops, or properties we consider too rural or too remote from urban centers.