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Fix and Flip Loans | Short-Term Financing for Real Estate Investors

Fix and flip loan financing for real estate investors — hard money and rehab loan options for purchase, renovation, and quick-close flips. Asset-based underwriting. No personal income docs required.

Fix and Flip Loans — Financing for Real Estate Investors

A fix and flip loan is short-term investor financing designed for one purpose: buy a distressed property, renovate it, and sell it at a profit. These are not conventional mortgages. They close fast, underwrite on the property — not your income — and carry terms of 6 to 24 months. When the project is done, you sell and pay off the loan.

The qualifying question isn’t your W-2. It’s this: does the deal make sense? Does the property have enough equity relative to its after-repair value? Is the rehab scope realistic? Is the exit clear? If yes, the loan gets done.

Talk to a Flip Loan Specialist — (833) 350-9185

Two Financing Paths for Fix and Flip

Most real estate investors use one of two loan structures depending on the deal:

Hard Money — Fast Acquisition

A hard money loan closes in 7 to 10 business days and disburses as a lump sum at closing. It’s the right tool when you need to move fast — auction purchases, distressed sales with multiple competing offers, and deals where the seller requires a quick close. The renovation is funded separately (your own capital, a line of credit, or a second draw facility).

Best for: Clean acquisitions where you can fund the renovation separately or where speed is the competitive edge.

Rehab Loan — Purchase + Renovation in One

A rehab loan wraps the purchase price and renovation budget into one short-term loan. The lender funds the purchase at close, then disburses renovation capital in draws as work progresses. You’re not pulling separate funds for the rehab — it’s built into the loan structure.

Best for: Larger renovations (typically $30,000+) where tying up personal capital for the rehab is the constraint, or where the renovation timeline is extended and you want a single financing relationship.

FeatureHard MoneyRehab Loan
Close time7–10 business days10–14 business days
Rehab fundingSeparate from loanBuilt-in draw schedule
Best forFast close, small rehabLarger renovation budget
Term6–24 months12–24 months
LTVUp to 75% purchaseUp to 70% LTARV

How Fix and Flip Underwriting Works

Both hard money and rehab loans use the same core underwriting logic:

  1. After-Repair Value (ARV) — What will the property be worth after renovation? Supported by comparable sold properties within 0.5–1 mile, ideally within 6 months. This is the most important number in the deal.

  2. Loan-to-ARV (LTARV) — The loan is sized as a percentage of ARV, not purchase price. A 65% LTARV on a property with a $350,000 ARV caps the loan at $227,500 — regardless of what you’re paying.

  3. Rehab scope — The scope of work is reviewed for cost-reasonableness and timeline realism. Lenders want to see line-item budgets and comparable contractor bids, not rough estimates.

  4. Exit strategy — How does the loan get paid off? Sale at a specific price point (supported by comps) or refinance into permanent financing. The exit must be realistic given the ARV and market conditions.

  5. Borrower experience — Track record matters. First-time flippers can qualify but may face tighter LTV and additional documentation. Experienced investors often see more flexibility.

Sample Scenario: Fix and Flip with Hard Money

Property: 3BR/2BA distressed single-family, Phoenix, AZ. Asking $230,000. Investor plans $40,000 cosmetic renovation and projects $335,000 ARV.

Purchase price$230,000
Rehab budget$40,000
ARV$335,000
Hard money loan (70% LTV on purchase)$161,000
Investor capital (purchase gap + full rehab)$109,000
Term12 months
ExitSale — estimated net proceeds cover loan payoff and cost of carry

Outcome: Closed in 9 days. Renovation completed in 11 weeks. Listed at $329,000, accepted $319,000, closed. Loan paid off at sale.

Sample Scenario: Fix and Flip with Rehab Loan

Property: 4BR/2BA gutted SFR in Dallas, TX. Purchase $185,000. Renovation scope: full kitchen, 2 bath guts, HVAC, roof. Budget $75,000. ARV $350,000.

Total project cost$260,000
Rehab loan (70% LTARV)$245,000
Investor cash at closing~$40,000 (covers gap + initial draw period)
Term18 months
Draws4 scheduled draws tied to inspection milestones
ExitSale at $335,000–$350,000

Outcome: Loan funded purchase at close. Draws disbursed as each renovation phase cleared inspection. Listed 5 months post-close, sold, loan paid off. Investor retained net profit.

When to Use Fix and Flip Financing

Fix and flip loans work for investors in these situations:

  • Distressed acquisitions — Properties that need substantial work and don’t qualify for conventional financing due to condition
  • Auction purchases — Where proof of funds and fast close are required
  • Competitive markets — Where a 7-day close beats a 45-day conventional close even on a higher-priced offer
  • BRRRR strategy (rehab phase) — Buy, Rehab, then refinance into long-term DSCR financing — the flip loan covers the acquisition and rehab, then gets replaced by permanent debt at stabilized rents
  • Value-add multi-family — 2–4 unit properties being repositioned from deferred maintenance to stabilized condition

Fix and flip financing is for non-owner-occupied investment property only. Owner-occupied purchase and renovation follow a different set of programs.

Fix and Flip vs DSCR vs Bridge

FeatureFix and FlipDSCRBridge Loan
PurposeShort-term: buy, renovate, sellLong-term: hold stabilized rentalTransitional: hold between transactions
ExitSale of renovated propertyNo exit required (permanent)Refinance or sale
Property conditionDistressed OK — rehab financedMust be habitable and income-producingHabitable, may have value-add component
Term6–24 months30 years6–24 months
UnderwritingARV + exit strategyProperty cash flow (DSCR)Equity + exit

Fix and Flip FAQ

A fix and flip loan is short-term investor financing used to purchase a distressed property, fund the renovation, and sell it at a profit. Terms run 6 to 24 months. Underwriting focuses on the property’s equity and after-repair value, not personal income or credit score. The loan is paid off when you sell or refinance.
Loan amounts typically run $100,000 to $5,000,000+. LTV is generally up to 75% of purchase price. LTARV (loan-to-after-repair-value) is capped at 65–70%. The project’s equity cushion — the spread between what you’re paying and what it will sell for after renovation — is the controlling factor.
Hard money-based fix and flip loans close in 7 to 10 business days. Rehab loans (which include a renovation draw facility) close in 10 to 14 days. Auction timelines can typically be accommodated. Conventional mortgage timelines — 30 to 45 days — are not realistic for most distressed-property acquisitions.
No. Credit is reviewed but is not the primary underwriting factor. Fix and flip loans are asset-based: the deal qualifies on property equity and after-repair value, not personal credit profile. Investors with recent derogatories, lower FICO scores, or credit events can qualify when the project itself is sound.
Yes — and it’s recommended. LLC vesting is standard practice for non-owner-occupied investment property. Single-asset LLCs are commonly used. Title held in a business entity typically provides liability separation between the project and the investor’s personal assets.
A fix and flip loan describes the investor strategy; a rehab loan is a specific loan structure (purchase + renovation combined in one loan with a draw schedule). You can execute a fix and flip using hard money (lump sum, fast close, renovation funded separately) or a rehab loan (renovation draws built into the loan). The right structure depends on your rehab budget size and whether you prefer to fund renovation yourself or through the loan.
Yes. The acquisition and rehab phase of a BRRRR strategy is financed the same way as a flip — hard money or rehab loan for the purchase and renovation. Once the property is stabilized and rented, you refinance out of the short-term flip loan into permanent DSCR financing . The fix and flip loan funds the value-add; the DSCR loan holds the stabilized asset.
  • Hard Money Loans — Fast-close, lump-sum acquisition financing
  • Rehab Loans — Purchase + renovation draw financing in one loan
  • DSCR Loans — Permanent financing after stabilization (BRRRR exit)
  • Bridge Loans — Transitional financing between transactions
Talk to a Flip Loan Specialist — (833) 350-9185

For illustration only. Not a commitment to lend. Rates, LTV, and terms vary by program, property type, and deal specifics — all figures shown are illustrative examples only. Subject to deal underwriting, ARV support, and exit strategy review. Not all applicants or properties will qualify. 1st Nationwide Mortgage Corporation, NMLS #1281. Equal Housing Lender.

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