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Fix and Rent Loan
Last updated: March 18, 2025
Access remarkable savings when you bundle your Fix and Flip loan and DSCR loan refi with OfferMarket.
What is a Fix and Rent Loan?
A Fix and Rent loan is a bundle of Fix and Flip loan -- commonly referred to as a "hard money loan" -- on the front-end to purchase (or refi a cash purchase) and rehab the property, and then a DSCR loan on the back-end once the property is rented.
A Fix and Rent loan is a bundle of Fix and Flip loan (aka "hard money") on the front-end to purchase (or refi a cash purchase) and rehab the property, and then a DSCR loan on the back-end once the property is rented.
When you bundle these two loans together, you receive remarkable benefits:
- Origination fee on DSCR loan: up to 50% OFF our already industry-low pricing
- No Seasoning refinance into DSCR loan: for rate and term refinance (rate and term = less than $2,000 cash out proceeds)
- 90 Day Seasoning refinance into DSCR loan: for cash out refinance into our DSCR loan (cash out = more than $2,000 cash out proceeds)
- Industry-low DSCR Loan Interest Rates: our DSCR loan interest rates are consistently among the lowest in the nation
Fix and Rent Loan Program Guidelines
| Criteria | Fix and Flip Loan |
|---|---|
| Min loan amount | $50,000 |
| Min ARV | $100,000 |
| Experience | 0 |
| Credit score (minimum) | 680 |
| Borrowing entity | LLC or Corporation |
| Initial advance (LTC) | 90% |
| Construction holdback (LTC) | 100% |
| Max LTARV | 75% |
| Interest rate | get instant quote |
| Origination fee | 1.5 to 2 points |
| Term | 6 to 18 months |
| Points out | None |
| Prepayment penalty | None |
| Structure | Interest-only |
| Guarantor | Yes (51% of borrowing entity) |
| Refi test | 1.1 DSCR after repairs |
| Valuation: Fix and Flip Loan | Appraisal report OR In-house valuation |
| Criteria | DSCR Loan |
| Seasoning: DSCR Refi | None if rate and term, 90 days if cash out |
| Min loan amount | $55,000 |
| Min As Is value | $100,000 |
| Interest rate | get instant quote |
| Term | 30 years |
| Rate structure | Fixed |
| Amortization | Full or Interest Only (5 year or 10 year) |
| Min DSCR | 1.0 |
| Credit score (min) | 660 |
| Max LTV | 80% (rate and term), 75% (cash out) |
| Liquidity | up to 9 months of PITIA reserves |
| Origination fee | up to 50% discount, $1,500 min |
| Valuation: DSCR Loan | Appraisal report |
Initial Advance: Loan to Purchase Price
The "initial advance" component of your Fix and Flip loan is the percentage of the purchase price that will be funded by OfferMarket. This amount is based on verifiable real estate investing experience among the members of the borrowing entity. The initial advance may be reduced if our profit analysis comes in low -- this is most common when the appraisal report ARV ("subject to repairs") or market market is lower than the estimate you submitted with your loan request. For more detailed guidelines, please review our Fix and Flip loan program.
| Scenario | Initial advance (% of purchase price) |
|---|---|
| 0 experience | 80% |
| 1 experience | 85% |
| 2 experience | 85% |
| 3 experience | 85% |
| 4 experience | 90% |
| 5+ experience | 90% |
| Rural | 65% (need 3+ experience) |
| Scenario | Adjustments |
| Credit score less than 720 | -5% |
| Full gut rehab | -5% |
| New market | -5% |
| Licensed Realtor | up to +5% |
| Licensed General Contractor | up to +10% |
| Licensed Professional Engineer | up to +10% |
Frequently Asked Questions
Is this a streamlined construction to perm loan with only one closing?
No. This is not a streamlined construction to permanent financing loan. The Fix and Rent loan program is a bundle of two (2) separate loans: Fix and Flip loan then DSCR loan. This means there are two separate settlements:
| Settlement | Loan Type |
|---|---|
| 1 | Fix and Flip |
| 2 | DSCR |
Do I need to refi into a DSCR loan?
No! Your exit strategy can be to sell ("flip"). While this program is focused on serving rental property investors, we understand that instead of holding in your rental portfolio you may ultimately decide to sell. This is not uncommon and is completely fine! The initial component of the Fix and Rent bundle is a Fix and Flip loan and you can freely sell the property to pay off your Fix and Flip loan.
Can I just use the Fix and Flip component of the loan?
Yes, absolutely. While our core focus is serving rental property investors who prefer to refinance after completing the Fix and Flip loan component of this Fix and Rent bundle, we fully understand you may decide that a sale of the property is a better exit strategy than a refinance based on your unique scenario and goals. We also understand you may decide to work with a different lender for the refinance into a long term loan.
How does the Fix and Flip loan get repaid?
The Fix and Flip loan is paid off when you refinance or sell the property. The Fix and Flip loan is interest-only, this means that your monthly payments only consist of interest and therefore do pay down the principal balance of the loan.
Fix and Rent Loan Example
Let's take a look at an example for a borrower with 720 middle score on their trimerge credit report.
Fix and Flip Loan
- Purchase price: $100,000
- As Is value: $100,000
- Scope of work (rehab budget): $25,000
- ARV (based on scope of work): $175,000
- Market rent (after rehab): $1,600
- Verifiable experience: 5
- Initial advance: $85,000 (85% of purchase price)
- Construction holdback: $25,000 (100% of rehab budget)
- Total loan amount: $110,000
- LTARV: 62.9%
- Interest rate: 10.75%
- Monthly payment: initial advance: $761.46
- Monthly payment: fully disbursed: $985.42
- Annual taxes: $2,000
- Annual insurance: $1,500
- Refi exit strategy test (pass/fail): Pass
- Sale exit strategy test (pass/fail): Pass
- Cash to close (estimated): $22,905
DSCR Loan
- As Is value (after rehab is completed): $200,000
- Market rent: $1,650
- Actual rent: $1,700
- LTV: 75%
- Loan amount: $150,000
- Interest rate: 7.5%
- Annual taxes: $2,000
- Annual insurance: $1,000
- Annual HOA: $0
- Monthly payment (PITIA): $1,298.82
- DSCR: 1.27 (minimum is 1.0)
- Cash out proceeds: $39,117.61
Summary of Example
- Cash to close (Fix and Flip loan): ($22,905)
- Holding costs (3 months interest + draw fees): ($3,196.88)
- Total capital invested into deal: ($26,101.88)
- Cash out proceeds (net of closing costs): $39,117.61
- Net change in cash: +$13,015.73
- Monthly rental cash flow: $351.18
How does draw processing work?
A draw is a reimbursement for progress against your scope of work rehab budget. Our app-based draw processing allows you to receive draw reimbursements fast by avoiding 3rd party inspection.
Step 1: indicate the completion % for each line item in your digital scope of work. Takes 1-2 minutes. Step 2: take photos of the property and submit for review. Takes 5-10 minutes. Step 3: funds are wired to you same day or next business day.
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