Fix and flip
Buy a property that needs work, renovate it with money released in draws, and repay the loan when you sell.
Fix and flip loans in New Jersey
Salem County, New Jersey
Fix and flip loans in Salem County, NJ
For investors buying a Salem County house that needs work, to sell it or rent it once the work is done: how a fix and flip loan is sized, how the renovation money is paid out, and what to check before you sign a contract. These are business-purpose loans on investment property. Fidelity Residential is a direct, licensed mortgage lender with a New Jersey office on Route 36 in West Long Branch, in Monmouth County, and we lend across New Jersey.
- Direct, licensed mortgage lender
- NMLS #103098
- Equal Housing Lender
What is the plan?
Pick the closest, or call and talk it through.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
Salem County housing
Older houses, and vacant homes not on the market
Salem County is home to about 65,300 people and about 27,700 homes, by the 2020 to 2024 American Community Survey estimates from the Census Bureau. Owners live in an estimated 71.0 percent of the occupied homes.
An estimated 10.4 percent of homes, about 2,900, were counted as vacant. About 2,000 of those were not for rent, for sale or held for seasonal use, the group the Census Bureau calls other vacant.
At the median, owner-occupied homes in the county are valued at an estimated $239,500.
Fidelity Residential is a direct mortgage lender licensed in New Jersey under a Residential Mortgage Lender License. Our office is at 121 NJ-36, Suite 230, West Long Branch, in Monmouth County; we do not have an office in Salem County, and we lend across New Jersey.
The homes
- Built before 1960: close to half of homes, about 47 percent
- Prewar homes: an estimated 21.8 percent date from 1939 or earlier
- Detached houses: about three homes in four, an estimated 74.4 percent
- No mortgage: an estimated 43.3 percent of owner-occupied homes have none
- Renters: an estimated 29.0 percent of occupied homes, about 7,200, are rented
Source: US Census Bureau, American Community Survey 5-year estimates, 2020 to 2024. Estimates, not counts.
Fix and flip
How a fix and flip loan works
A fix and flip loan is short-term financing for a real estate investor to buy a property that needs work and renovate it, then sell it or refinance it into a long-term loan. These loans are often called hard money or private money loans; we make them as a licensed direct lender, for business purposes only.
The loan has two parts. The money to buy is paid out at closing, and the money for the renovation is held back and released in draws as each stage 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.
It is sized on the deal rather than your tax returns: the purchase price, the line-by-line renovation budget and the value you expect after the work, with your credit and your record of completed projects setting the limits.
At a glance
- Business purpose: you usually borrow through a company
- Never your home: nobody on the loan will live in the property
- The property: one to four units, townhomes and condos, including houses that need a lot of work
- Repaying early: generally no prepayment penalty when you sell or refinance
The plan
Sell it, keep it, or bridge it
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 JerseyBridge
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
Before you sign
What to check before you sign a contract
The loan reads the deal, so the deal has to hold together on paper. 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 first.
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
- The value after the work: sales of renovated homes nearby that support it
- The budget: a contractor’s bid you can turn into a line-by-line budget, with a cushion for surprises
- Permits: your town’s permit and inspection rules, before you set the schedule
- Holding costs: interest each month, the current tax bill, insurance and utilities while the work goes on
- Insurance and title: arranged before closing
Questions
Questions from Salem County investors
Do you lend in Salem County?
Yes. Fidelity Residential is a dba of PFN Lending Group, Inc. (NMLS #103098), which holds a New Jersey Residential Mortgage Lender License, and we lend across New Jersey. You can check the licence on NMLS Consumer Access (opens in a new tab).
Do you have an office in Salem County?
No. Our office is at 121 NJ-36, Suite 230, West Long Branch, NJ 07764, in Monmouth County. 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 live in the house while I fix it up?
No. A fix and flip loan is a business-purpose loan: the property is never your home, and you sign a statement saying so. For a home you will live in, see renovation loans.
What is after-repair value?
The value the property is expected to have once the renovation is finished, often shortened to ARV. An after-repair value supported by sales of similar renovated homes nearby makes the deal easier to size.
Talk with a loan officer near you
Get a quote online, or call us and talk it through with a licensed loan officer.
What happens next
- Tell us about your loan. A few quick questions about the property and the loan you want. No credit check to start and no obligation.
- A licensed loan officer reviews your answers and follows up with you, usually within one business day.
- This is a request for a quote, not a loan application and not a commitment to lend.
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 credit, income, property 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.