Halal Fix and Flip

Halal Fix and Flip Islamic finance has a few different names. It’s often referred to as private lending or hard money. Whatever the term, these halal loans involve short-term loans with lower qualifying criteria and different interest rates when compared to traditional banks.

One of the big advantages is these fix and flip loans can be approved and funded in as little as 14 days. If you’re an investor, they can give you some definite advantages like:

• Speed when executing purchase contracts.
• The ability to compete efficiently with foreclosure options
• A quick efficient way to close cash only deals
• A speedy method to fund construction while maximizing the amount of on hand cash.

What’s Needed For One of These Islamic Finance Loans?

We have supplied a quick application to get you started. You can find it simply by following this link. There are some other requirements that you will need to begin. These include:

A Rehab Budget.

Accuracy is important here. A good rehab budget reduces the time it takes to draw on money to get payouts. It also avoids running out of cash before any fix and flip is ready for the market.

It’s important to include descriptions of each and every item including the listing. It’s also good idea to have a 15% cushion case there are any unexpected issues like leaking pipes.

A Track Record

Having proven experience with halal fix and flip projects puts you in a good position.

Remember many financial institutions see this as a risky proposition. You’ll need to have a decent track record for success with this type of Islamic finance.

There are other requirements for applications.

• Bank statements are important.
• You’ll need a Purchase Agreement and Title Insurance.
• Corporation documentation like an Operating Agreement and articles are also necessary.

There are some advantages to these halal fix and flip loans.

The approval time is generally quicker than with the more traditional loan. Lenders focus more on the equity in the project rather than the person they’re lending the money to.

Another bonus is there are no prepayment penalties. The property itself is the collateral. If you don’t turn a profit on the sale of the house, the lender can take ownership.

The Options

Several options exist for this type of financing. There’s stated income finance or bridge finance available. You can choose from mortgage finance or rental property finance as well.

Success with one of these halal loans depends on building a good team.

That group should include a real estate agent who can help you with the acquisition. Because of the nature of the deal, you’ll need a good contractor. It’s also important have a real estate lawyer and a financier/investor working with you.

A charter professional accountant is also a must have for your team. Finally, it’s important if you’re   a practicing Muslim to have sharia compliant experts on staff.

We can help you with that part of your business deal. Contact IjaraCDC today to learn more.