· Education · Sayasone Phongvichith
Your first flip: what first-time investors need to know
Experience helps but is not required. Here is what RED publishes for first-time investors on Fix & Flip, including the caps.
Every investor has a first flip. RED's Fix & Flip program is open to first-time investors: experience helps, but it is not required.
What is published
- First-time investors are eligible.
- They are capped at a $100,000 renovation budget and 25% of purchase price.
- The minimum FICO is 660. Scores from 600 to 660 are reviewed case by case, subject to underwriting.
- An LLC or corporation holds title, and at least 51% of the entity guarantees the loan.
What the cap means for your first deal
It shapes the kind of project that fits. A cosmetic refresh on a house you can buy right is a natural first deal. A gut rebuild or an addition is a later one. Plan the first project so the renovation budget sits inside the cap.
How the cap grows
Once you have verified projects behind you, the renovation budget cap is 2x your highest verified past project, up to $500,000. Keep records of every project: the purchase, the scope, the sale and the numbers. The desk asks for your track record for the last three years of investment properties, so a clean file pays off on the next deal.
Build the deal on paper first
- Run the 70% rule as a quick filter, then check it against real comps.
- Build a line-item rehab budget with room for surprises.
- Know your exit before you close.
What to send the desk
The contract, a line-item scope of work and budget, the entity formation documents and the guarantor's credit information. Pricing is quoted per deal.
Program figures are indicative only and subject to complete documentation, underwriting, appraisal and final credit approval. This post is general information, not financial or legal advice.