Fix & Flip loans are short-term financing options designed for real estate investors who purchase properties in need of renovation, make improvements, and then sell them for profit.
These loans focus on the after-repair value (ARV) of the property rather than its current condition — giving investors access to funds for both the purchase and the rehab.
⚙️ How Fix & Flip Loans Work
A Fix & Flip loan typically covers two parts:
Purchase funds – to buy the property
Rehab funds – released in stages as work is completed (called "draws")
You make interest-only payments during the renovation period, and then repay the full loan amount when you sell or refinance the property.
Typical Loan Term: 6–18 months
Repayment: Interest-only with full balance due at sale or refinance
Collateral: The property being flipped
💡 Example Scenario
Description | Amount |
Purchase Price | $200,000 |
Rehab Budget | $50,000 |
Total Loan Amount | $225,000 (90% LTC) |
After-Repair Value (ARV) | $325,000 |
Estimated Profit | $75,000 (before closing costs) |
This structure allows investors to leverage capital efficiently — financing both the purchase and improvements without tying up personal funds.
🧰 Who Fix & Flip Loans Are For
Fix & Flip loans are ideal for:
Experienced investors flipping multiple properties per year
New investors with a solid deal and clear exit plan
Contractors or builders who want to finance their own projects
LLCs or partnerships specializing in real estate investments
🏁 Key Advantages
Finance both purchase + rehab costs with one loan
Fast approvals and funding — often in days, not weeks
Flexible credit requirements (focus on project potential, not income)
Use leverage to handle multiple flips at once
Access to experienced underwriters who understand real estate investing
📈 Pro Tips for Successful Flips
Build a detailed budget and timeline before applying
Get multiple bids from contractors to stay within scope
Understand your exit strategy — sell or refinance — before closing
Work with lenders familiar with draw schedules and renovation timelines
Keep reserves for unexpected repairs or holding costs