Online loans aren’t new to most people. We go online all the time and apply for credit cards or fill out loan applications to credit unions, banks, department stores and more. People can even do a large portion of the mortgage loan process online, cutting the time necessary across the desk from the lender.

1. Real Estate Investors Using More Online Financing
Online loans aren’t new to most people. We go online all the time and apply for credit cards or
fill out loan applications to credit unions, banks, department stores and more. People can even
do a large portion of the mortgage loan process online, cutting the time necessary across the desk
from the lender.
However, real estate investors who seek funding in the short term for fix & flip and other
property buy-sell transactions are really just beginning to get real access to online funding. I’m
talking mostly about P2P, Peer-to-Peer lending. New laws and American enterprise are
responding to make it easier for small investors to provide funds and other small to large
investors to access them through online P2P lending platforms.
Who needs this type of funding? Any project that adds value to real property through
renovation, rehabilitation or modification can benefit from this type of funding. The fix & flip or
value-add investor needs funding to get over the hump between the purchase of the property and
the eventual sale or placement into service for income. There are very different underwriting
considerations for these higher risk and cost intensive projects, and it’s just more of a hassle and
more expensive to deal with traditional lenders and banks.
Win-Win-Win at the Front End
There are millions of small investors out there who can benefit from P2P lending, or crowd-
funding. They aren’t rich enough to invest directly into major projects, but they would love to
enjoy double-digit returns as passive investors in real estate development and renovation. These
P2P online lending platforms allow them to invest smaller sums and receive the same benefits as
the mega-rich investor who funds entire deals.
By gathering together these small investor funds and packaging them into short term funding for
fix & flip and development projects, the small investors get the management expertise they need
and excellent returns in a passive role.
Win-Win-Win in the Middle
The fix & flip investor or commercial developer now has access to lenders with the knowledge
and experience necessary to safely fund value-add and rehab real estate projects of any size. The
single family fix & flip investor can apply for financing and get pre-approvals to help them to
lock up properties with a certainty of funding through the fix & flip process. The commercial
developer can access funding faster and with less paperwork and time involved than necessary
with more traditional lenders.
The fix & flip investor is particularly interested in this type of funding. They are out there
constantly searching for deals, and the competition is fierce. When a distressed home is located,

2. it can be a race to the contract. Having a relationship with an online short term lender allows the
investor to get speedy approval so they can safely sign a purchase contract. They know their
financing through the process is in place, and they know the cost.
Win-Win-Win at the End
The ultimate owner of the rehabbed property also wins in this situation. They are more secure in
signing a purchase deal knowing that there is funding in place to get the project through to
completion. The lenders frequently only pay the construction funds out as the proof of milestone
completions comes through. The buyer is more secure in the knowledge that there will actually
be a closing on the property they expect in the condition they want.
It’s All in the Technology
The Internet has changed so much in the business world, and definitely in the real estate
business. Now thousands of small passive investors can connect with real estate rehab and fix &
flip investors in an efficient and profitable way. Everybody wins.