When it comes to real estate investing, fix and flip projects can offer strong returns if executed properly. However, securing the right funding is crucial to success. For investors in St. Louis City and County, Westre Financial Group has been a trusted source for hard money loans since 2001. If you’re thinking about taking out a fix and flip loan, here are the top five things you should consider before making a commitment.
1. Understand What Hard Money Lending Really Means
Hard money loans are not traditional loans from banks or credit unions. Instead, they are strictly collateral-based, meaning that the decision to lend is based on the property itself rather than your creditworthiness. Westre Financial Group makes this clear: if the collateral makes sense, the loan is approved. There is little or no emphasis on your credit score. Understanding this fundamental difference is essential before you proceed, as it impacts the entire approval and funding process.
2. Know the Local Focus of Your Lender
Westre Financial Group exclusively lends within St. Louis City and County. This is not just a limitation; it is a key advantage. Their deep local knowledge positions them to guide you more accurately through the purchase and renovation process. Local expertise is critical in evaluating comparable sales, renovation costs, and resale potential, all of which determine whether your deal is viable. Make sure your project falls within their geographic focus, as they do not fund projects outside of these areas.
3. Be Ready with Proof of Funds for Renovations
Unlike some lenders who finance both the purchase and the rehab costs, Westre Financial Group does not provide funds for renovations. They believe that if you do not have the necessary funds to complete the rehab, you should reconsider entering the business. Before applying, you must be prepared to submit proof of funds that will cover your renovation expenses. Without it, your application will not move forward. This step protects you and ensures you can complete the project and realize your profits.
4. Understand the Evaluation Criteria
At Westre Financial Group, loan approval is based on a straightforward but rigorous evaluation. Once your borrower application and property application are complete, and proof of rehab funds is submitted, Brad Westre personally visits the property. He assesses four specific areas: purchase price, renovation cost, soft charges, and anticipated selling price based on comparable sales in the area. If the numbers add up to a reasonable profit, the loan will be approved for 100% of the purchase price. Understanding these four criteria can help you prepare a stronger application and avoid unnecessary delays.
5. Be Clear About Costs and Terms
Transparency is one of Westre Financial Group’s strong suits. They do not charge junk fees like credit checks, appraisals, processing, or application fees. The only fee they charge is a 2% origination fee, which is added to the loan. Additionally, there are no prepayment penalties, and all loans are processed in-house without involving third parties or borrowed funds. Knowing exactly what costs you will incur and the straightforward terms can help you better calculate your potential profits and avoid surprises down the road.
Conclusion
Taking out a fix and flip loan is a major step in your real estate investment journey. In St. Louis, working with an experienced and reliable lender like Westre Financial Group can make all the difference. With their local expertise, streamlined process, and borrower-focused approach, they help keep investors out of bad deals and guide them toward profitable opportunities. Visit Westre Financial Group’s website today to get started with a team that truly understands the St. Louis market.