Fix and flip
Buy a property that needs work, renovate it with money released in draws, and repay the loan when you sell.
New Jersey · Monmouth County
Fix and flip loan lender in New Jersey
A fix and flip loan is short-term financing for a real estate investor to buy and renovate a property, then sell it or refinance it into a long-term loan, with the renovation money released in draws as the work is done. These investor loans are often called hard money or private money loans; we make them across New Jersey as a licensed direct lender. For business purposes only.
- Licensed mortgage lender
- NMLS #103098
- Equal Housing Lender
Start with your deal
See how a deal pencils, then get terms in writing.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
Local lender
A licensed alternative to hard money in Monmouth County
Fidelity Residential is a direct mortgage lender licensed in New Jersey under a Residential Mortgage Lender License. Our New Jersey office is at 121 NJ-36, Suite 230, West Long Branch, and our licensed branch is at 1 Yorktowne Drive, Manalapan (branch NMLS ID #2103558).
Short-term investor loans to buy and renovate are often called hard money or private money loans. Ours work the same way investors expect, sized on the deal rather than on your tax returns, but you deal with a licensed lender you can look up on NMLS Consumer Access, your terms come in writing on a term sheet before you commit, and renovation money is released against a third-party inspection of the finished work.
We work with investors throughout Monmouth County and the Jersey Shore, and in the rest of New Jersey. A licensed loan officer can go through the purchase, the renovation budget and the value you expect after the work, and tell you early where the deal stands.
How it works
How a fix and flip loan works
A fix and flip loan, also called a residential transition loan, has two parts. The money to buy the property is paid out at closing. The money for the renovation is held back and released in draws as the work is finished and an inspector confirms it.
You pay interest only each month, and the balance is repaid at the end of a short term, when you sell or refinance; you can ask for an extension if you need more time. The loan is sized on what the property is worth before and after the work, not on your personal income.
These loans are short-term and priced for speed. They suit a project with a real plan to sell or refinance, and they are the wrong tool for a property you mean to keep for years on the same loan.
At a glance
- Business purpose: you usually borrow through a company
- Never your home: nobody on the loan will live in the property
- One to four units, townhomes and condos
- Generally no prepayment penalty when you sell or refinance
A worked example, in words. Say you are buying an older house in Monmouth County that needs a new kitchen, a roof and updated systems, to sell when the work is done.
- The three figures. The purchase price, the line-by-line renovation budget, and the value you expect the property to have after the work.
- The loan. It is sized on all three: a share of what the property is worth now plus the renovation money, checked against limits on the total cost and on the value after the work. The smallest result sets the loan; your credit and your record of completed projects set the limits.
- At closing. The money to buy is paid out. The renovation money is held back.
- During the work. You pay interest only each month. As each stage is finished you ask for a draw, a third-party inspector confirms it, and the completed work is reimbursed, so plan your cash to pay for each stage first.
- At the end. You sell and repay the loan, generally with no prepayment penalty, or you rent the house and a long-term rental loan based on the rent replaces the short-term loan.
Size up a deal first. The Deal Snapshot leverage estimator takes your purchase price, renovation budget and after-repair value and shows how the deal pencils on our program. It is an estimate, not an offer; your exact numbers come back with your quote.
Strategies
Four ways New Jersey investors use it
Purchase or refinance. Terms depend on the strategy and on your record of completed projects.
Fix and hold
Renovate and keep the property as a rental. Once it is rented, a long-term rental loan based on the rent can replace the short-term loan.
DSCR loans in New JerseyGround-up construction
Buy a lot and build, or build on land you already own, to sell or keep as a rental. A feasibility report, contractor details and plans or a permit are part of the file.
Construction and renovation loansBridge
Short-term financing on a property that needs little or no work, while you sell, lease it up or arrange a long-term loan.
New Jersey
Planning a flip in New Jersey
The loan reads the deal, so the deal has to hold together on paper.
Houses that need real work
Residential properties of one to four units, townhomes and condos that nobody on the loan will live in, including properties that need a lot of work, from older Monmouth County homes to houses near the Shore.
A line-by-line rehab budget
Before closing you list the renovation line by line: site work, structure, systems, finishes, exterior and a cushion for surprises. That budget becomes the plan for the draws. Check your town’s permit and inspection rules before you set the schedule.
Cash for each stage
As work is finished you ask for a draw, a third-party inspector confirms it, and the completed work is reimbursed. Materials bought but not yet installed are not paid for, so plan your cash to pay for each stage before its draw.
Selling or renting the finished property can carry taxes and local requirements of its own. Ask your tax adviser, and check your town’s rules.
Before you sign a contract on a New Jersey flip
- Sales of renovated homes nearby, to support the value you expect after the work
- A contractor’s bid you can turn into a line-by-line budget, with a cushion for surprises
- Your town’s permit and inspection rules, before you set the schedule
- The holding costs while the work goes on: interest each month, the current tax bill, insurance and utilities
- Insurance and title, arranged before closing
- Your exit if you keep it: for fix and hold, the finished rental needs a projected DSCR of at least 1.00, so the expected rent at least covers the payment, taxes, insurance and any HOA. Work that adds value can raise the assessment, and with it the tax bill.
Be ready
What you will need
Not sure you have everything? Request a quote anyway and we will guide you.
- The application and credit and background authorization
- Company documents: formation papers, operating agreement, tax number
- Photo identification and recent bank statements
- Your track record: the properties you have bought, renovated, sold or kept
- The purchase contract and the rehab budget, filled in online (see how)
- Insurance and title, arranged before closing
Questions
Questions from New Jersey investors
How fast can a fix and flip loan close in New Jersey?
Often in about 7 to 10 days once the appraisal or valuation and the title are in. Having the purchase contract, your rehab budget and your company documents ready helps most.
What do fix and flip lenders in New Jersey look at?
The deal first: the purchase price, the renovation budget and the value after the work. Then your track record of completed projects, your credit, the cash you bring to closing and reserves, and the company you borrow in, with a personal guarantee. First-time investors are considered on tighter terms. See the terms in figures.
Are you a hard money lender in New Jersey?
Fix and flip loans are often called hard money or private money loans, and ours do the same job: short-term financing to buy and renovate, sized on the deal. We make them as a licensed direct lender. Fidelity Residential is a dba of PFN Lending Group, Inc. (NMLS #103098), which holds a New Jersey Residential Mortgage Lender License; you can check it on NMLS Consumer Access (opens in a new tab).
Where are you located?
Our office is at 121 NJ-36, Suite 230, West Long Branch, NJ 07764, and our licensed branch is at 1 Yorktowne Drive, Manalapan, NJ 07726. Call 732-686-9999 to talk with a licensed loan officer.
Do you work with first-time investors?
Terms depend on your record of completed projects. First-time investors are considered for purchases, on tighter terms. A loan officer can tell you where your experience puts you.
Do I need a company to borrow?
Usually, yes. These are business-purpose loans, so you normally borrow through a company such as a limited liability company. We tell you which company documents to send.
Can I buy a house that needs a lot of work?
Yes. Residential properties of one to four units, townhomes and condos that nobody on the loan will live in can be financed, including properties that need a lot of work. The loan looks at the purchase, the renovation budget and the value expected after the work. Heavy rehab projects (foundation work, structural demolition, additions, or a budget close to the purchase price) are priced and sized differently. What counts as heavy rehab?
Is there a prepayment penalty?
Generally no. You can repay the loan when you sell or refinance. If you need more time, you can ask for an extension while the loan is current.
What if I decide to keep the property?
Once it is renovated and rented, a long-term rental loan based on the property’s rent can replace the short-term loan. See our DSCR loans in New Jersey.
How much can I borrow on a New Jersey flip?
The loan is the smallest of several limits, measured against what the property is worth now, the renovation budget, the total cost and the value after the work, and the limits depend on your credit and your record of completed projects. Our Deal Snapshot leverage estimator is sized for a 660+ credit score and 3 or more completed projects in the last 3 years: up to 90% of as-is value, 100% of rehab, 92.5% of total cost and 75% of ARV. It is an estimate, not an offer; your exact numbers come back with your quote. Heavy rehab projects (foundation work, structural demolition, additions) are priced and sized differently. Try the estimator.
What is after-repair value?
The value the property is expected to have once the renovation is finished, often shortened to ARV. The loan is sized on what the property is worth before and after the work, so an after-repair value supported by sales of similar renovated homes nearby makes the deal easier to size.
Can I refinance a project I already own?
Yes. These loans can refinance a property you already own as well as buy one; terms depend on the strategy and on your record of completed projects. On a cash-out refinance, cash-out can be no more than 50% of the project’s total projected profit.
Does my experience as a contractor count?
It can. Terms depend on your record of completed projects, and general-contractor experience counts with proof the projects were completed. A loan officer can tell you where your experience puts you.
Can I change the rehab budget after I send it?
Yes. You list the renovation costs line by line on our site, on a computer or a phone, and you can save it, finish later and change it after you submit. See how it works.
Should I use a fix and flip loan or a bridge loan?
It depends on the work. A fix and flip loan buys a property that needs renovation and releases the renovation money in draws as the work is done. A bridge loan is short-term financing on a property that needs little or no work, while you sell, lease it up or arrange a long-term loan. Fix and flip or bridge, compared.
Do you lend on flips outside Monmouth County?
Yes. We work with investors throughout Monmouth County and the Jersey Shore, and in the rest of New Jersey. Tell us where the property is when you request a quote.
Have a New Jersey deal to size up?
Request a quote, or talk the deal through with a licensed loan officer. Have a term sheet from another lender? See our Competing Offer Policy for Fix & Flip and Fix & Hold loans.
Business purpose investor loans are for investment property only.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on the property, your experience, credit and underwriting review and are subject to change without notice.
Reviewed by Robert Shamie, CEO, NMLS #241428 · Last reviewed:
Fidelity Residential (PFN Lending Group, Inc., NMLS #103098) is a direct mortgage lender licensed in 40 states and the District of Columbia, with 26 years in business.