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Fix and Flip Loans — Financing for House Flippers and Renovators
Flipping houses requires fast access to capital that traditional mortgages can't provide. Fix and flip loans (also called hard money or rehab loans) are designed specifically for investors buying properties to renovate and resell quickly. This guide covers everything from loan structures to calculating your flip profitability.
Trusted by over 2,500 California families
7-14 Days
To Fund
Purchase + Rehab
Financed
Interest-Only
During Renovation
Get Your Fix and Flip Pre-Approval
No impact to your credit score.
Get Your Fix and Flip Pre-Approval
No impact to your credit score.
What Is a Fix and Flip Loan?
A fix and flip loan is short-term financing (typically 6-18 months) designed for real estate investors who buy properties, renovate them, and resell for a profit. Unlike traditional 30-year mortgages, these loans are structured around the investment timeline — fast to close, flexible on borrower requirements, and focused on the property's after-repair value (ARV).
Because lenders focus primarily on the deal rather than borrower income, fix and flip loans are accessible to a wide range of investors — from first-time flippers to seasoned professionals running multiple projects.
Closes quickly 7-14 days
Fast funding lets you compete with cash buyers and win deals
Finances purchase + renovation
One loan covers both the acquisition and rehab costs
Interest-only during rehab
Lower monthly payments while renovating the property
Higher rates (short-term nature)
Rates reflect the short duration and higher risk profile
Asset-based (property focused)
Qualification based on the deal, not your W-2 income
Various exit strategies
Sell after rehab, refinance to rental, or pursue BRRRR method
Types of Fix and Flip Financing
Hard Money Loans
- Funding: Asset-based, fast 7-14 days closing
- Rates: 10-15% interest
- Terms: 12-18 months typical
- Source: Private lending companies and funds
Bridge Loans
- Purpose: Short-term financing between transactions
- Rates: 8-12% interest
- Source: Banks or private lenders
- Borrower: Stronger credit and experience needed
Rehab / Renovation Loans
- Source: Traditional lenders and banks
- Structure: Funds released in draws as work completes
- Docs: More documentation required
- Trade-off: Lower rates but slower closing
Private Money Loans
- Source: Individual investors and private individuals
- Terms: Fully negotiable based on relationship
- Best for: Relationship-based, repeat partnerships
Fix and Flip Loan Structure
Understanding how fix and flip loans are structured helps you plan your deals and calculate how much capital you need to bring to the table.
Example Deal Structure
Loan Components
- Purchase financing: 70-90% of purchase price
- Rehab financing: Up to 100% of renovation costs
- Total loan cap: Based on 65-75% of ARV
Rehab Draw Schedule
Renovation funds are not given upfront. Instead, they are released in stages (draws) as work is completed and verified by the lender or an inspector.
Foundation & Demo
Initial demolition and structural work verified
Rough Work
Plumbing, electrical, framing inspected and approved
Finish Work
Drywall, flooring, cabinets, fixtures installed
Final Inspection
Completed project meets scope and passes inspection
Calculating Your Flip Profitability
Smart flippers run the numbers before making an offer. The 70% rule is the industry standard for evaluating deals, and a detailed profit calculation helps you avoid expensive mistakes.
The 70% Rule
The golden rule of house flipping: your maximum purchase price plus rehab costs should not exceed 70% of the After-Repair Value (ARV).
Max Purchase + Rehab ≤ 70% of ARV
This leaves 30% margin to cover holding costs, selling costs, and profit. Experienced flippers may stretch to 75% on strong deals.
Profit Calculation Example
Fix and Flip Loan Rates and Terms
Rates and terms vary based on loan type, borrower experience, and deal strength. Here is what to expect across the most common fix and flip financing options.
Hard Money Rates
10-15% interest depending on experience, deal quality, and lender
Bridge Loan Rates
8-12% interest with stronger borrower requirements and shorter hold periods
Bank Rehab Rates
7-10% interest from traditional lenders with more documentation required
Points (Origination)
1-3 points charged upfront at closing, typically 1-3% of loan amount
Loan Terms
6-18 months standard, with extension options available on most programs
Payment Structure
Interest-only monthly payments, balloon at maturity, usually no prepayment penalty
First-Time Flipper Tips
Success in house flipping comes from preparation, discipline, and learning from the mistakes of others. Follow this advice to maximize your chances on your first project.
Before Your First Flip
- ✓Study your target market and comparable sales
- ✓Network with experienced flippers and contractors
- ✓Consider partnering with a seasoned investor
- ✓Start with a smaller, less risky project
- ✓Have 6+ months of reserves beyond the deal
During Your Project
- ✓Get multiple contractor bids before hiring
- ✓Create a detailed scope of work document
- ✓Build in 10-20% contingency for surprises
- ✓Monitor progress with weekly site visits
- ✓Communicate regularly with your lender
Mistakes to Avoid
- ✗Underestimating rehab costs by skipping inspections
- ✗Overestimating ARV based on wishful thinking
- ✗Poor contractor management and oversight
- ✗Not accounting for holding costs in your budget
- ✗Buying in unfamiliar markets without local knowledge
Loan Programs for Every Need
We offer a comprehensive range of mortgage products. The right loan depends on your situation, goals, and financial profile — and we'll help you find the perfect fit.
DSCR Loans
Best for: investors qualifying by rental income.
How it works: Approval is based on property cash flow, not personal income.
Key features:
- No personal income docs
- 620+ credit, 20–25% down
- Unlimited properties
Conventional Investment Loans
Best for: strong W-2 investors.
How it works: You qualify using personal income, credit, and assets.
Key features:
- Lowest rates
- 620+ credit (700+ ideal)
- Up to 10 properties
Portfolio Loans Options
Best for: complex or large portfolios.
How it works: Lender creates a custom loan outside standard guidelines.
Key features:
- Flexible underwriting
- Finance 10+ properties
- Relationship-based
Fix & Flip (Bridge Loans)
Best for: renovate-and-sell investors.
How it works: Short-term loan for purchase and rehab, repaid at sale or refi.
Key features:
- Fast closings (7–14 days)
- Based on ARV
- Covers purchase + rehab
Cash-Out Refinance (Investors)
Best for: pulling equity to reinvest.
How it works: Refinance and extract cash from existing property value.
Key features:
- Access up to 75–80% value
- Use funds for any purpose
- DSCR or conventional options
Blanket Loans
Best for: multiple properties.
How it works: One loan covers several properties under one payment.
Key features:
- One loan, one payment
- Finance 5+ properties
- Portfolio consolidation
Short-Term Rental Loans
Best for: Airbnb/VRBO investors.
How it works: Qualify using projected or actual short-term rental income.
Key features:
- DSCR-based
- 20–25% down
- Uses STR income data
Bank Statement Loans
Best for: self-employed borrowers without traditional income docs.
How it works: You qualify using 12–24 months of bank deposits instead of tax returns.
Key features:
- No W-2s or tax returns
- Personal or business statements
- 620+ credit typical
- 10–20% down
Fix and Flip Questions, Answered
Everything you need to know about fix and flip financing. Can't find your answer? Reach out and we'll help.
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Fast financing lets you move on deals before the competition. Get pre-approved and start building your flipping business today.
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