Fix & Flip Term Sheet FAQ

PROPERTY DETAILS

1. Subject Property Address: The location of the property being financed.
2. Loan Purpose: The reason for the loan. In this case, it’s for purchasing a property.
3. Loan Type: Specifies the type of financing. “FixNFlip” refers to loans for purchasing and renovating properties to resell for profit.
4. Property Type: Indicates the type of property (e.g., Single-Family Residence – SFR).
5. Number of Properties: The total properties covered by the loan.

LOAN TERMS SUMMARY

6. Estimated Loan Amount: The total loan amount being offered.
7. Rate: The annual interest rate on the loan, expressed as a percentage.
8. Origination Fee: A fee, as a percentage of the loan, charged for processing the loan.
9. Term: The duration of the loan. “13 Months Interest Only” means payments cover interest only for 13 months.
10. Initial Payment: The monthly payment at the beginning of the loan.
11. Payment Once Fully Drawn: The monthly payment after the full loan amount, including rehab funds, is disbursed.

BORROWER INFO

12. Primary Sponsor Name: The main person responsible for the loan.
13. Entity Name: The legal entity borrowing the funds.
14. Qualifying FICO Score: The credit score of the borrower used for loan qualification.
15. Loan Guaranty: Indicates whether the loan is “Full Recourse,” meaning the borrower is personally responsible for repayment.

LEVERAGE CALCULATIONS

16. Blended Loan to Cost (LTC): The percentage of the total project costs covered by the loan.
17. Rehab Budget LTC: The percentage of the rehab budget financed by the lender.
18. Currently Projected ARV: The percentage of the current loan amount compared to the After Repair Value (ARV).
19. Max Allowable ARV: The lender’s maximum loan amount as a percentage of the projected ARV.

LOAN STRUCTURE SUMMARY

20. Estimated ARV (After Repair Value): The projected market value of the property after renovations.
21. Purchase Price: The agreed-upon price for acquiring the property.
22. Construction Budget: The estimated cost for property renovations.
23. Existing Payoff: The balance of any existing loans on the property.
24. Total Loan Fees & Costs: The total fees and costs associated with the loan.
25. Estimated Loan Amount: The projected loan value based on the terms and structure.

LOAN COSTS – PAID AT CLOSING

26. Origination Fee: A percentage of the loan amount charged at closing.
27. Underwriting and Processing Fee: Costs for reviewing and approving the loan application.
28. Legal Fee: Charges for legal services associated with the loan.
29. Broker Fee: The fee paid to the broker facilitating the loan.
30. Broker Processing Fee: Any additional broker-related fees.
31. Estimated Cash Due From Borrower at Close: The amount of cash the borrower needs to bring to closing.

LOAN COSTS – PAID OUTSIDE CLOSING

32. Upfront Valuation Fee: A fee for appraising the property. This is determined later.
33. Draw Fee, Per Property Inspected: A fee charged for each draw inspection during construction or rehab. This fee is subtracted from the draw amount.

ADDITIONAL INFORMATION

34. General Contractor (GC): A licensed contractor who may be required for new construction or heavy rehab loans.
35. Permits: Required legal documents for certain types of property improvements.
36. ACH Payments: Loan payments must be made through Automated Clearing House (ACH) transfers. Canceling this setup may incur a fee.
37. Disclaimer: The terms on the sheet are for informational purposes only and not a binding commitment to lend.