Successful Ohio Funding Fix/Flip Case Study

In September 2017, I received a referral from a Real Estate Agent colleague in San Diego, his friend in Cleveland Ohio needed funding for a property that purchased for cash back in July 2017 for $80,000 cash. They purchased the property to be used for a special needs daycare center (special use)

While using personal funds to finance a total interior remodel, they demo/gutted the inside of the property, with this being their first project, they were not prepared for the unexpected expenses that presented themselves.

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Their rehab was north of $60,000.

They purchased the property for cash, so the equity should available, right?

In simple terms, yes – but because of these factors the marketability of a potential loan became more difficult:

  • Location of the asset
  • Asset type (special use) not just a regular tenant rental, it’s residential used as a business.
  • Value of Asset (As-Is value was only $75K) most fix/flip hard money loan minimums are $150k
  • Owner/Borrower has 650 Fico, no previous experience flipping homes or land-lording.
  • This was a long-term Hold, but lenders who offer long-term financing at reasonable rates will only loan to stable assets, so she needed a two-step solution.
  • Gutting the property destroyed the chances of simply cash-out refinancing because the lender immediately required an appraisal inspection!

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  • Getting a lender to approve the refinance knowing the borrower has no previous history of completing rehabs.
  • Getting a lender to approve the loan knowing the borrower has no reserves! They underestimated their rehab, and needed the funds to complete the renovation. How will they repay the loan?
  • Developing an exit strategy for the fix/flip loan included adding a co-signor, who also needed to be added to the business LLC.


  • We applied in the name of the LLC with a very well-known lender, the rate was higher than we preferred, but the points were reasonable and they provided the requested cash-out to complete the rehab and reserve 12 months’ worth of interest payments so she didn’t have to worry about that. Everything was going smoothly, we had title complete, ARV appraisal came in at $160K!

I immediately fist-pumped, and did my “celebration/money” dance & awaited the imminent closing date!

The following days we had a term sheet with $15,000 cash to close as a condition? This included points, closing costs and reserves requirement! The proposed loan amount was $80,000, so I convinced her that we needed to raise the funds from somewhere!

Her father stepped up earlier in the process to qualify for the exit loan as a co-borrower, he has a 700+ fico score. To qualify for the 7.5% rate with 30 yr. fixed or 7/1 ARM with 30-day refi seasoning, you need to have a solid 660+ Fico. I offered to help them land unsecured funding to deposit to their business account to show reserves, they weren’t happy about paying the fees or the unexpected panic to perform, but reluctantly applied for and received $90k+ in personal unsecured funding from 6 different vendors.

We were ready to close the loan, when the lender suddenly backed out, saying that the DSCR was just short of qualifying?! They didn’t have they act together, it was a gross error from the underwriting team, and my account rep couldn’t get the exception approved.

It was heart-breaking. Three weeks were spent. Now it’s mid-October, in Ohio they are facing the bitter Mid-West snowy winter, and she can’t afford to slow down on the rehab..

She was blessed to have the cards to take care of expenses, however, because the cards came in her dad’s name, it wasn’t easy to convince them to let the cards go! Her parents feared that she would rack up unsecured debt that she couldn’t pay down. Ultimately destroying her father’s credit.

My team and funding partner located her a great loan, they agreed to take the rehab bid we put together, ARV appraisal, title work and loan package, it was already packaged and should’ve been a slam-dunk!

She used the credit card she received to pay a small application fee, and they announced a closing date. Unfortunately, it took about 3 weeks longer to get it done, meanwhile, honestly I’m getting nervous – my client called me with her husband on the line and they were concerned as well.

I reassured her that I knew these guys would close & that her case was very solid!

She explained the situation with the credit cards and her inability to use them.

I coached her on how to explain the importance of intent. The whole reason we are applying for multiple forms of funding is to complete the rehab at any cost!

This is your future business location. And until you complete the rehab, you are losing time & money.

Use the unsecured funds to pay your contractors and buy material, when this refi goes through, pay the lines of credit off! But have faith.

She complained that she felt bad bringing her parents into it and that she wanted to stop altogether! She was very discouraged.

I reminded her why she started! You are trying to provide a better lifestyle for your family and it requires sacrifice and your dad stepped up to help his little girl!

Don’t fail him by quitting in the middle of your plan! Continue to execute.

And she did.

Over the next couple weeks waiting in anticipation she racked up some hefty invoices from her contractor and was prepared to pay them via her unsecured credit when BOOM suddenly “Clear to Close” came across our emails, with loan docs and estimated HUD for review and signing to be completed a few days later.



  • The process taught her a lot about financing, she learned how to qualify for fix/flip and buy/hold loans, as well as unsecured funding.
  • She had her father add her as an authorized user on all of the trade lines, so now she’ll get her own cards for easy access, she’ll build her credit score through positive history (piggy-backing) and paying all of the lines down again!
  • She received $90k unsecured financing in 3 weeks, then $75,000 3-4 weeks later @ 12% for 12 months, she received a lump sum at the table, and she has submitted a couple draws already for reimbursement. You complete the work – submit an invoice after you (take before /after pictures), then the 3rd party company reviews, approves and wires the money to your business account in 24-48 hrs.
  • She now has 6 trade lines that added $90k to her ratios, and if she keeps utilization down under 30%-40% it’ll raise her score to 700+ also with another mortgage trade line, she would be soon staring at an 800+ fico score!
  • Because we added her dad to the LLC, I’m focused next on helping them create a strong business profile with multiple business lines of credit of $200k-$500k over the next 12 months. These lines will allow them 100% access to borrowing down on the lines without affecting their business credit rating! She can open another daycare center by early 2019, or flip some properties in the area (if they choose).
  • Finally, since she’s been working on the property the whole time, she estimates being complete with the Refi by mid-January, immediately applying for the refinance into the 30-yr. fixed. The lender has already reviewed her property details, personal credit and financials and pre-approved them, additionally since the 1st payment isn’t due until January for the current loan, she has a great chance to only make 1-2 payments at 12%.

In the end, my team and I were successful at providing a couple rounds of funding for a well-deserved client. We have a long-term solution in place that she can self-sustain and scale up if preferred.

At Fix and Flippers, we approach each potential deal on a case-by-case basis. It’s helpful to remember that we are very active in the market and possess resources that may not be advertised or previously mentioned.

We help clients with credit repair, credit enhancements, traditional and non-traditional funding, both secured and unsecured. We pair up investors to structure successful joint venture partnerships.

We prefer an on-going working relationship with our clients to offer advice, consulting and resources.

We welcome Brokers and Facilitators to partner with us. You will be protected.








Sell Your Real Estate-Backed Note Today!


If you have a privately owned, real estate backed note (non-performing or performing) that you want to SELL, please contact me ASAP!

Working with investors making offers on notes I am direct to, and they are looking for more! Residential, Commercial, single note for $150MM Portfolio, Nationwide, They will make an offer on any note with no obligation or expectation! Family business operating for 25 years..

Both Fixed Rates or ARMs such as performing Residential loans and SBA 7a loans, FSA’s, HCEM’s and USDA’s). They accept seasoned loans.

They still look for Residential and Commercial Sub-Prime loans and various credit quality loans that are performing, non-performing or sub-performing and REO (Real Estate Owned) or Deed in Lieu properties NATIONWIDE.

SFR, Condominiums, Duplexes, Multi Family, Strip Centers, Offices, Warehouses, Churches and more are desired.

They still look for Agency and Non-Agency quality loans either servicing released or servicing retained..

Additionally, they also have an interest in REO Class A/B industrial warehouses in key markets in the US and Mexico…

Contact me if you are selling your note(s) / 858-386-0949

Hot Homes Index For Los Angeles County 2016


Hopefully I didn’t miss too many chances to connect and network with you guys over the past month, but through the holidays I’ve been preparing for a move and now I’ve relocated permanently to Los Angeles this year which had been a goal of mine for many years. Entering my 14th year in Real Estate, I’m very excited to be here & positioned to make it the best year ever. The County has tremendous opportunities in Fix and Flipping luxury properties for large profits in the $1MM+ range, plenty of deep-pocket investors with massive capital stacks reserved for the best Flippers, Developers, Operators & Entrepreneurs who desire to use O.P.M (Other Peoples Money).

This year I’ve identified multiple sources of capital for luxury acquisitions for tear-downs, sub-dividing, multi-family developments, subdivision building, shovel-ready approved projects in the $10M+ range.


Since moving to Hollywood Hills, California area, I’ve come to see a totally amazing side of Los Angeles. The scent of prosperity and the energy is very inviting, and it’s been spawning the interest of investors who desire to fund flippers who are active in the area, I work with these lenders directly.


According to the Los Angeles Times in the Business section this morning, they detailed the hot spots here in LA.

1.) Santa Monica

Area code 90402, with homes averaging $3.3M, has been attracting international buyers who want safe investments outside of their countries of Asia, Russia and South America, these homes are known to be larger and more spacious near the beach. Also buyers from the tech world are gravitating to the area increasing demand with no end in site for rising values.

Pier at Night

2.) Hermosa Beach

Area code 90254, with homes averaging $1.7M+, has many great advantages in that it is the beach town next to ritzy Manhattan Beach that has been continually out-pricing families from the neighborhood that has values of $2.1M+, Hermosa Beach has a reputation for good schools, and strong demand is attracting tech workers from Venice & Playa Vista neighborhoods and Silicon Beach.


3.) Lincoln Heights/Montecito Heights/Elysian Valley

Area code 90031, with homes averaging $458K+ is an area north of downtown L.A. seems to be catching the attention of investors and retail buyers alike, now that Silver Lake, Echo Park and Highland Park have now been gentrified and improved, these areas are becoming increasingly more expensive with low inventory, the buyers and investors are looking next door to expensive Montecito Heights & Lincoln Heights located between the 10 and 110 freeways and Elysian Valley which is located between the L.A. river and the 5 freeway  and is up-and-coming.

Montecito Heights

Montecito Heights

Elysian Valley (Frog Town)

Elysian Valley (Frog Town)

3.) City Terrace/East L.A.

Area code 90063, with homes averaging $320K+ seems to be affected similarly to Lincoln Heights in that they’ve been seeing lots of activity from investors because buyers are looking in these surrounding areas due to affordability. You can find a nice Spanish Colonial close to downtown with views of downtown L.A. and from City Terrace, you can see the Hollywood Sign. This would be a great time for long-time owners to cash-in and sell, investors I work with are looking for these opportunities currently.

city terrace

4.) Marina Del Rey

Area code 90292, with homes averaging $2.1M+, is one of my favorite West-side beachfront neighborhoods, I love the community & Venice Beach and with plans for new restaurants, stores and renovation of its maritime, hospitality, and entertainment attractions coming, housing is starting to become demand in the Marina..mostly due to the tech industry in Santa Monica, Venice and Playa Vista areas creating wealthy buyers looking to next door communities.

Marina Del Rey

5.) Manhattan Beach

Area code 90266, with homes averaging $2.1M+, no longer considered a lazy beach town, is now home to Hollywood types, professional athletes, and other high-earners looking for beach-life that offers great schools and quality restaurants. Developers are buying the remaining small cottages and building mini-mansions to keep with the high demand and low inventory.


6.) Compton

Area code 90220 with homes averaging $274K+, has been a  favorite among flippers that I know..they tell me that they have no problems selling homes in this area, very fast with multiple offers. Crime rates have plummeted and lenders beginning to lend in the area once again, and with purchase prices this low, many can qualify for financing. Families from South Bay and Long Beach are considering Compton when searching for a cheaper home. Also an interesting phenomenon – parents and a grown child and their spouse buying homes…to split the expenses. Coupled with low interest rates and low down-payment programs, has also helped nearby north Carson and Willowbrook see increased growth, Flippers are very busy re-developing homes in Compton. Investors I work with will have no problem funding these sorts of flip deals.

7.) Playa Del Rey

Area code 90293, with homes averaging $1.5M+, considered a low-key beach-side neighborhood at the end of Culver Boulevard is a new hot-bed for workers in the tech industry and advertising hubs in Playa Vista. They are saying that the prices are rising above those in the bubble of 2006, for example – an agent states that a home she recently listed for $2.8M, back in 2006 it sold for $2.6M, the high rate of corporate expansion is driving increased values.


8.) Toluca Lake/Studio City

Area code 91602, with homes averaging $1.022M+, located in the San Fernando Valley with elite private schools has been a destination for Hollywood executives and wealthy families for along time, now due to new bars and restaurants urban young professionals are seeking to move to the area, also developers are buying older homes to renovate or tear down and build larger, grander homes.


Financing: Private Funding Sources

Fix and Flippers has established proven relationships with Top Tier Lenders in the Southern California area that will provide:

  • Acquisition for Fix and Flips, Buy/Hold rentals, Mixed-Use Development, Spec Homes, Multi-Family, Commercial in Southern California. (anything else..just ask)
  • Refinances – Cash-out, Rate and Term, pay off balloon payments from private lenders. Consolidate multiple high-interest loans into one loan.
  • Home-Owners with equity can JV (Joint Venture) with our team to inject rehab capital into your project, we’ll bring our construction team, hire our real estate agents to resale the property and we’ll split the net profits!
  • Attention Developers with 20+ recent deals – Please inquire about 100% Financing – 70/30 get 70%! (This is a VIP Program that lenders provide acquisition+rehab+closing costs+carry costs) 
  • This Program is designed to create exclusive relationships with my top contacts.

  • No DTI, Fico, Credit Requirements. Stated, Verified is OK.
  • Fast Decisions..3 days then Funding 7-30 days depending on if we need to order an appraisal..
  • Construction to Permanent Financing & Creative Structures.
  • ARV Lending, up to 75%-80% of ARV (Southern California Residential Fix/Flip only)
  • Prior Experience Required.
  • When submitting a project, please have an executive summary with exit strategy, comps or appraisal, rehab bid from experienced contractor, and Bio/Professional Resume with All completed Projects of all principals completed in last 24 months. Background checks may be ran upon application.
  • Loan Amounts of $100K – $200M will be considered. Residential/Commercial/Multi-Use/Development/Bridge

If you are a Principal Investor looking for Investment Properties or Private Funding..respond below for Immediate attention. Or