How Fix & Flip Loans Work?

Fix & Flip Loans: Fast, Flexible Financing for Real Estate Investors

When it comes to real estate investing, especially in the fast-paced world of house flipping, timing and funding are everything. Traditional financing options often involve a lengthy and paperwork-heavy process that can delay your project—or even cost you the deal. That’s where Fix and Flip loans come in.

Fix and Flip loans are designed specifically for real estate investors who buy distressed or undervalued properties, renovate them, and sell them for a profit within a short time frame. Unlike traditional bank loans, these loans are asset-based, which means approval is focused more on the value and potential of the property you’re flipping, rather than your personal income or tax returns.

Why Choose a Fix and Flip Loan?

Less Documentation, Less Hassle
One of the biggest advantages of Fix and Flip loans is the streamlined underwriting process. Unlike community banks or conventional lenders that may require exhaustive documentation—like tax returns, W-2s, bank statements, and pay stubs—Fix and Flip lenders primarily evaluate the property’s value and the borrower’s investment experience. In most cases, you won’t need to provide tax returns or employment verification. This significantly reduces the paperwork burden and allows you to move faster on opportunities.

This approach makes Fix and Flip loans ideal for self-employed investors, full-time flippers, or even those who have non-traditional income sources. If you’ve ever missed out on a deal because your bank couldn’t process your application fast enough, you’ll appreciate the speed and flexibility of asset-based lending.

High Leverage for Experienced Investors

For experienced investors, Fix and Flip loans can offer exceptionally high leverage. We provide financing for up to 90% of the purchase price and 100% of the renovation costs, depending on your track record and experience level.

This means that, in many cases, you can take down a deal with as little as 10% of the purchase price out of pocket. For a $200,000 property with a $50,000 rehab budget, for example, you might only need $20,000 for a down payment. 

That kind of leverage can supercharge your business by allowing you to:

• Preserve your working capital

• Take on multiple projects at once

• Scale your business faster

• Increase your ROI by investing less of your own money

For newer investors, leverage levels may start a bit lower, but they can increase over time with a successful track record. The great news is that we have recently introduced a High FICO program for newbie flippers who have a FICO score of 740 or above. They now may be eligible for the 10% down program which used to be reserved for experienced flippers only. 

How the Loan Structure Works

Loan Amounts & Terms
Fix and Flip loans are short-term in nature, typically structured as 12-month interest-only loans. In certain cases, terms can be extended to 18 or even 24 months, offering more flexibility depending on the scope of the renovation or resale timeline.

Rehab Financing
One of the most attractive features of these loans is the inclusion of renovation funds. Rehab budgets are approved during the underwriting phase, and funds are released in draws as work is completed and verified—usually through a third-party inspection or a simple photo verification process. This structure keeps your renovation on budget and ensures that funds are being used efficiently.

Loan-to-Value (LTV) and After-Repair Value (ARV)
Loan amounts are generally based on a combination of the property’s purchase price and its after-repair value (ARV). For example, we might lend up to 90% of the purchase price and up to 75% of the ARV. The higher your ARV and the more accurate your rehab estimate, the more funding you can potentially secure.

Speed and Flexibility Are Key

In the fix and flip world, the best deals don’t sit around for long. Whether you're buying at auction, off-market, or through an agent, being able to close quickly is often what separates the successful investors from the rest.

Fix and Flip loans are structured to allow fast closings—sometimes in as little as 7 to 10 business days for borrowers who use our Fast Track Program or 21 - 30 days for the standard timeframe. This makes them a strong alternative to cash offers, and in some markets, just as competitive. With fewer underwriting requirements and a common-sense approval process, you can move quickly when opportunity knocks.

Who Should Use a Fix and Flip Loan?

Fix and Flip loans are ideal for:

• Experienced investors looking to expand operations and scale quickly

• First-time flippers who need flexible capital without jumping through traditional lending hoops

• Real estate agents or contractors entering the investment space

• Buyers of distressed or auction properties needing fast closing

• Investors who want to preserve cash for future deals, unexpected costs, or diversification

Whether you're doing light cosmetic updates or full gut renovations, a Fix and Flip loan gives you the financing power to complete your project from acquisition to sale.

Benefits at a Glance

• No tax returns, W-2s, or pay stubs required

• Fast closings (7-10 business days typical)

• Up to 90% of purchase price and 100% of rehab costs covered

• Interest-only payments during the term

• Rehab funds released in draws as work is completed

• Loan terms from 12 to 24 months

• Flexible guidelines for new and experienced investors
  
  

Final Thoughts

Fix and Flip loans have become a staple financing option for real estate investors across the country—and for good reason. They offer speed, flexibility, and high leverage that traditional bank loans simply can't match. Whether you’re a seasoned professional looking to take on multiple projects or a newer investor eager to jump into your first flip, a Fix and Flip loan can help you execute your vision while preserving your capital and keeping your business agile.

By focusing on the value of the property and your plan to improve it, rather than traditional financial metrics, these loans give you the opportunity to move quickly, fund renovations, and exit profitably.

In today’s competitive market, where great deals often require fast decisions and fast closings, Fix and Flip loans are more than just a financing tool—they're a critical part of your investment strategy. Since these loans are very deal specific, the best way to get an accurate idea of your numbers is to fill out our 2-minute intake form which will give us all the information we need to run a loan quote for you HERE.