Fix and flip investing has become an increasingly popular strategy for real estate investors in St. Louis. With the right financing, investors can purchase distressed properties, renovate them, and sell them at a profit. However, securing funding is one of the biggest challenges in this business, and that’s where fix and flip lenders in St. Louis come in.
These lenders provide short-term, asset-based loans designed for property flippers who need fast funding. But before diving in, it’s crucial to understand the terms, eligibility requirements, and costs associated with these loans. In this blog, we’ll break down everything you need to know about fix and flip lending in St. Louis.
What Are Fix and Flip Loans?
Fix and flip loans are short-term financing solutions that allow investors to purchase properties, renovate them, and sell them within a short timeframe—typically within 6 to 12 months. Unlike traditional bank loans, these loans are collateral-based, meaning the property itself secures the loan rather than the borrower’s credit score.
In St. Louis, hard money lenders like Westre Financial Group specialize in funding real estate investors who need fast and flexible financing for their fix and flip projects.
Key Terms of Fix and Flip Loans in St. Louis
1. Loan-to-Value (LTV) Ratio
The Loan-to-Value (LTV) ratio is a critical factor in determining how much financing you can receive. Most fix and flip lenders in St. Louis offer loans based on the property’s after-repair value (ARV) or purchase price.
- Typical LTV range: 70% – 85% of ARV
- 100% financing: Some lenders, like Westre Financial Group, offer 100% of the purchase price, but they do not fund renovation costs.
This means investors must have their own capital for renovations while relying on the lender to cover the purchase price.
2. Interest Rates
Fix and flip loans carry higher interest rates than conventional mortgages because they are short-term and riskier for lenders.
- Average range: 8% – 14%
- Factors affecting rates: Property location, experience level of the investor, and the lender’s specific terms.
Since these loans are designed for quick turnaround, the high-interest rates are offset by the rapid resale of the property at a higher value.
3. Loan Terms & Repayment Period
Most fix and flip loans are structured as short-term financing options.
- Loan duration: 6 to 12 months
- Repayment options: Some lenders allow interest-only payments during the loan term, with the principal due at the end.
Investors need to plan their renovation and selling timeline carefully to avoid extension fees or loan defaults.
4. Fees & Closing Costs
Beyond interest rates, fix and flip lenders charge additional fees. These can include:
- Origination fees: Typically 1% – 3% of the loan amount
- Underwriting fees: $500 – $2,000
- Prepayment penalties: Some lenders charge fees if you pay off the loan early, but Westre Financial Group does not impose prepayment penalties.
Understanding these costs is essential for estimating the true expense of your project.
5. Credit Score Requirements
Unlike traditional mortgage loans, fix and flip loans are asset-based, meaning they focus on the property’s value rather than the borrower’s creditworthiness.
- Minimum credit score: Some lenders have no minimum requirement, while others may require 600+.
- Borrower experience: Having past fix and flip experience can lead to better terms and lower interest rates.
6. Down Payment & Proof of Funds
Most fix and flip lenders in St. Louis require proof of funds to ensure the borrower can complete the renovation.
- Down payment: Often required if the loan is not covering 100% of the purchase price.
- Renovation budget: Investors must show they have the cash reserves to handle the rehab costs.
Westre Financial Group, for example, funds 100% of the purchase price but requires investors to have their own rehab money.
How to Qualify for a Fix and Flip Loan in St. Louis
To secure a fix and flip loan, you’ll need to follow these steps:
Step 1: Complete the Loan Application
Most lenders, including Westre Financial Group, provide online applications. Borrowers must submit details about their investment history, property information, and funding needs.
Step 2: Property Evaluation
The lender will assess the property based on:
- Purchase price
- Renovation cost estimates
- Comparable sales in the area
Brad Westre, for instance, personally visits properties for evaluations before approving loans.
Step 3: Submit Proof of Funds
Investors need to show they have the necessary cash reserves to cover renovation costs.
Step 4: Loan Approval & Closing
Once approved, loans can fund quickly, sometimes within a few days. This is much faster than traditional bank loans, which can take weeks or months.
Why Choose Westre Financial Group?
For investors looking for fix and flip lenders in St. Louis, Westre Financial Group stands out due to:
- 100% financing on purchase price
- No junk fees (no credit check, appraisal, or processing fees)
- Fast loan approvals with in-house processing
- No prepayment penalties
- Decades of real estate experience to guide investors
Unlike national lenders, they focus exclusively on St. Louis City & County, ensuring local expertise and a hands-on approach to every deal.
Final Thoughts
Fix and flip loans provide a valuable funding option for real estate investors in St. Louis. However, understanding loan terms—such as LTV ratios, interest rates, repayment terms, and fees—is crucial before securing financing.
For fast, reliable, and local fix and flip lending solutions, Westre Financial Group is a trusted choice for St. Louis investors.
Call (314) 626-4442 or visit Westre Financial Group to get started today!