Loans in Indiana for 1-4 Unit Rentals Now

Fix and Flip Construction Loans in Indiana: The 2025 Complete Guide for 1-4 Unit Rentals

Investing in Indiana’s residential real estate market has never been more promising than in 2025. With a surge in demand for renovated rental homes and low housing inventory in key neighborhoods, investors are seeking quick, flexible capital solutions. Whether you’re renovating a single-family home in Fountain Square, rebuilding a duplex in Bloomington, or converting a fourplex in Lafayette, understanding construction and fix & flip financing is essential to maximizing your returns in Indiana.

Indiana Real Estate Market 2025: Opportunity Snapshot

• Median Home Price (Statewide): $244,000* (up 4.7% YoY)
• 1-4 Unit Rentals: Increased demand, particularly among young families and professionals relocating for Indiana’s robust job market
• Top Investment Areas:
  • Fountain Square (Indianapolis): Trendy, high rental demand, rapid property appreciation rates (~6%)
  • Bates-Hendricks (Indianapolis): Emerging urban neighborhood, strong flip ROI
  • Bloomington: Driven by the university, hot for turnkey duplex/triplex rentals
  • Lafayette/West Lafayette: Student and workforce rental demand, fourplex opportunities
  • Carmel: Upscale flips, excellent rental appreciation
  • Fort Wayne – West Central: Historic homes, popular with investors for duplex/triplex conversions
  • Evansville – Downtown/NoCo: Affordable entry points, steady rental market

*Indiana Association of REALTORS, Jan 2025

What Are Fix & Flip and Construction Loans for Indiana 1-4 Unit Rentals?

Fix and flip and construction loans are short-term, asset-based financing specifically designed for:

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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• Purchasing and rehabbing distressed 1-4 unit residential properties (single-family, duplex, triplex, fourplex)
• Ground-up construction of rental properties
• Converting properties (e.g., SFH to triplex)
• Bridge-to-perm financing to transition to long-term rental loans (like DSCR loans)

These loans are crucial for investors seeking to act quickly in Indiana’s competitive 2025 market.

Loan Types Overview

• Fix & Flip Loans: Short-term (12-18 months), finance purchase & rehab costs
• Construction Loans: Flexible draws for labor/materials on ground-up or heavy rehab
• Hard Money Loans: Asset-based, fast funding, minimal income verification
• DSCR Loans: Debt-Service-Coverage-Ratio rental loans (ideal for long-term take-out after rehab)

Indiana Lenders Specializing in Fix & Flip & Construction Loans (1-4 Units)

These lenders are active and competitively priced for Indiana’s fix & flip, construction, and rehab lending in 2025:

1. Lima One Capital – Leading national private lender with great rates for Indiana investors; fix & flip, rental, new construction.
2. RCN Capital – Same-day preapprovals and rapid draws for 1-4 unit rentals statewide.
3. Kiavi – Streamlined application process; known for low documentation and scalable lines.
4. Indiana Statewide Certified Development Corporation – Local expertise in construction/permanent loans for 1-4 units.
5. CoreVest Finance – National lender with excellent long-term DSCR loan programs to take out construction loans post-rehab.
6. BridgeWell Capital – Hard money, fix & flip, and cash-out refinance options, Indiana-focused loan officers.

2025 Fix & Flip and Construction Loan Guidelines in Indiana

• Eligible Properties: 1-4 unit homes (SFH, duplex, triplex, fourplex)
• LTV/LTC (Loan-to-Value/Cost): Up to 85% loan-to-cost (purchase+rehab), up to 70% ARV (after-repair value)
• Loan Amounts: $75,000 to $500,000+ for 1-4 units
• Terms: 12-24 months (fix & flip/construction), up to 30 years (DSCR take-out)
• Interest Rates (2025): 8.9%–11.5% fix & flip/construction, DSCR rental loans ~7.25%–8.75% (depending on rental coverage & experience)
• Rehab Draws: Fast, milestone-based or line-item reimbursement
• Credit Score: Minimum 620-660 (lower for hard money options)

Step-By-Step: Indiana Fix & Flip/Construction Loan Application Process (2025)

1. Prequalify/Preapproval: Submit basic details (property address, type, project scope, purchase price, rehab budget, experience, credit score)
2. Property & Borrower Review: Lender reviews deal, borrower experience, credit; most don’t require tax returns for fix & flip
3. Appraisal & ARV: Third-party ARV appraisal, project scope verification
   • Tip: Use a contractor’s detailed bid for faster approval
4. Loan Commitment: Lender issues a commitment letter with terms, draw schedule, and fees.
5. Closing: Title, insurance, and closing docs. Funded in as little as 7-14 days in Indiana.
6. Rehab/Construction Begins: Draws released upon inspection/milestones.
7. Exit Strategy: Sell for profit (flip) or refinance with a DSCR rental loan (buy & hold investors)

Success Stories: Indiana Investors in 2025

Downtown Indianapolis: Duplex Fix & Flip

• Purchase Price: $210,000
• Rehab Budget: $88,000
• Lender: Lima One Capital
• Loan Amount: $252,000 (85% LTC)
• Term: 12 months, 9.25% interest-only
• Exit: Sold for $368,000; 4-month project; $52,000+ net profit after all costs

Bloomington University Area: Single-Family to Triplex Conversion

• Purchase Price: $185,000
• Construction Budget: $140,000
• Lender: RCN Capital (Construction Loan)
• Loan Amount: $230,000 (80% LTC)
• Term: 18 months, 10.25%
• Refinance: DSCR Loan via CoreVest at 7.75% 30-year fixed
• DSCR: 1.30x; No personal income verification

Lafayette Fourplex Cosmetic Rehab

• Purchase Price: $320,000
• Light Remodel: $56,000
• Lender: Kiavi (Fix & Flip Hard Money)
• Loan Amount: $286,000 (75% ARV)
• Term: 12 months, 9.9%
• Exit: Rented fully, refinanced to DSCR loan in 6 months

Key Considerations in Indiana (2025)

• Permit Timelines: Indianapolis, Bloomington, and Fort Wayne scale from 2-8 weeks, so factor this into loan terms
• Neighborhood Comps: Focus on blocks with active flips/rentals for stronger ARV appraisals
• Rental Demand: Near universities (Purdue, IU), major employers (Eli Lilly, Anthem), and revitalizing downtowns
• Exit Planning: Know your refinance options; lenders like CoreVest and RCN Capital have seamless construction-to-perm programs (DSCR rental loans)

FAQs: Indiana Fix & Flip and Construction Loans for 1-4 Units

• Can I qualify without tax returns? Yes – most fix & flip and DSCR lenders rely on property/project more than personal income.
• Do I need prior experience? Not for all programs, but more experience can mean better rates/terms and higher leverage.
• How long to fund? Standard is 10-20 days, with some hard money lenders able to close in 5-7 days for urgent deals.
• What if I want to keep the property? Use a DSCR loan rental refinance at project completion. Many top lenders offer both loan types.

Next Steps: Lock Your Indiana 2025 Fix & Flip or Construction Loan

1. Define your investment goals (flip vs. buy & hold; property type, area)
2. Contact 2-3 specialized Indiana lenders for rate/term quotes
3. Prepare your project scope and bid, and get prequalified before making offers
4. Move fast – Indiana’s 2025 market is competitive, but lenders are ready to support your success

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

Page 4 of 5

For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Ready to maximize your Indiana investment property project? Utilize local lenders, leverage flexible financing products, and invest confidently in Indiana’s strongest rental markets.

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Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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