Fix and Flip Loans
Learn about mortgage programs that provide short-term financing for buying, renovating, and selling properties quickly. Connect with lenders who understand real estate investing.
Fix and Flip Loans: Short-Term Financing for Real Estate Investors
Fix and flip loans provide short-term mortgage financing for real estate investors who purchase, renovate, and sell properties quickly.
This specialized program recognizes that successful house flipping requires quick access to capital and flexible terms that traditional lenders cannot provide.
For experienced real estate investors, house flippers, and property investors with renovation experience, fix and flip loans offer a streamlined path to property acquisition and renovation when traditional financing cannot accommodate their timeline and investment strategy.
What is a Fix and Flip Loan?
- Definition
- A fix and flip loan is a specialized short-term mortgage program designed for real estate investors who purchase distressed properties, renovate them quickly, and sell them for a profit. These loans typically have terms of 6-18 months and are based on the after-repair value of the property.
- How it works
- These loans provide short-term financing for purchasing and renovating distressed properties. The loan amount is based on the after-repair value, and you typically have 6-18 months to complete renovations and sell the property for a profit.
- Key advantage
- Fix and flip loans provide quick access to capital for experienced investors, allowing them to move fast on distressed properties and complete renovations within a realistic timeline for profitable resale.
How Fix and Flip Loans Work
A fix and flip loan provides short-term financing for purchasing and renovating distressed properties. You typically need a 650 credit score, 20-30% down payment, and detailed renovation plans. This program may be suitable for experienced real estate investors who want to purchase, renovate, and sell properties quickly.
Basic Fix and Flip Loan Eligibility
You may be eligible for a fix and flip loan if you have:
- Real estate investment experience
- 650 credit score
- 20-30% down payment
- Detailed renovation plans and budget
Common Fix and Flip Loan Eligibility Requirements
- Credit score:
- 650 FICO score
- Down payment:
- 20-30%
- Renovation plans:
- Detailed plans and budget required
- Contractor:
- Licensed, experienced contractor approved by lender
- Loan amounts:
- Up to $1,500,000
- Loan term:
- 6-18 months
- Income verification:
- Standard W-2, pay stubs, tax returns
- After-repair value:
- Must justify total loan amount
- Renovation timeline:
- As few as 3 months to complete
- Exit strategy:
- Clear plan to sell or refinance
Did you know: Fix and flip loans are based on the after-repair value of the property, not the purchase price.
Why You Need Another Lender
If you've been denied financing for a fix and flip project, you're not alone. Many traditional banks simply don't offer programs designed for real estate investing. They require longer terms, owner occupancy, and don't understand the quick turnaround nature of house flipping.
Your first bank just doesn't offer the right program for you.
Think of it like when a customer asks for something your business doesn't offer. Maybe they want delivery but you only do pickup, or they need a service you don't provide. You're not saying no because there's anything wrong with them—you just don't offer that particular service. Same with mortgages. Traditional banks work great for owner-occupied homes, but they don't offer the programs that real estate investors need.
Traditional banks use conventional underwriting that requires owner occupancy and longer terms. Fix and flip projects require short-term financing that understands renovation timelines, after-repair values, and quick resale strategies. Conventional programs see the investment purpose and can't approve you, even though you have a solid renovation plan and exit strategy.
Fix and flip loans are perfect for experienced real estate investors, house flippers, property investors with renovation experience, those with stable income and good credit, or anyone who wants to purchase, renovate, and sell properties quickly for profit.
This isn't about finding loopholes or gaming the system. It's about working with lenders who understand real estate investing and can see the potential value. Fix and flip loans are offered by lenders who work with real estate investors every day. They look at the after-repair value—what the property will be worth when renovations are complete—rather than just the current distressed condition.
For a no obligation conversation about your mortgage, contact Bradley Swearingen (#2577725) of Rain City Capital at 214-756-7076.
Example Use Cases and Scenarios
Did you know: Fix and flip loans can finance up to $1,500,000 based on the after-repair value.
How Do Fix and Flip Loans Work?
Fix and flip loans follow a specialized mortgage process designed for quick property acquisition and renovation. The key difference is short-term financing - these programs provide quick capital for experienced investors to move fast on opportunities.
The Fix and Flip Loan Process
- 1. Property Analysis & After-Repair Value Assessment
- The process begins with property analysis where lenders examine the current condition and purchase price, followed by after-repair value assessment to determine the property's potential worth after renovations. Lenders then complete renovation plan review to ensure the budget and timeline are realistic, and exit strategy evaluation to confirm the resale plan is viable. This specialized evaluation allows financing based on future value rather than current distressed condition.
- 2. Short-Term Financing Structure
- Unlike traditional loans that require longer terms, fix and flip loans provide short-term financing typically lasting 6-18 months. The loan structure includes quick funding for property purchase, renovation fund releases as work progresses, and flexible terms that accommodate the quick turnaround nature of house flipping. This structure allows investors to move fast on opportunities and complete projects efficiently.
- 3. Investment-Focused Underwriting
- Experienced underwriters review your complete profile using investment-specific criteria. They assess your real estate investment experience including past flips and renovation projects, property potential through after-repair value analysis, and renovation feasibility through plan review and contractor evaluation. The underwriting process focuses on investment potential rather than traditional owner-occupancy requirements.
- 4. Quick Closing & Renovation Management
- Once approved, the process includes quick closing to secure the property, renovation management with progress inspections and fund releases, and exit strategy execution through sale or refinance. The closing process is streamlined for investors, with standard mortgage documents plus renovation agreements, competitive fees for investment properties, and the same consumer protections as conventional loans.
Fix and Flip Loans vs Conventional Mortgages
Understanding the key differences between fix and flip loans and conventional mortgages can help you choose the right financing option for your situation.
| Feature | Fix and Flip Loans | Conventional Loan |
|---|---|---|
| Who Qualifies | Experienced real estate investors, house flippers, property investors with renovation experience, those with stable income and good credit, and anyone wanting to purchase, renovate, and sell properties quickly | W-2 employees, salaried workers |
| Income Documentation | Standard income verification including W-2s, pay stubs, tax returns, and bank statements for down payment verification | W-2s, pay stubs, tax returns |
| Minimum Credit Score | 650 FICO score | 620 |
| Minimum Down Payment | 20-30% down payment | 3% |
| Private Mortgage Insurance | Not applicable | Private mortgage insurance (PMI) |
| Occupancy Type | Investment properties only | Primary residences, second homes, investment properties |
| Property Type | Distressed properties, fixer-uppers, properties needing renovation | Single-family homes, condos, townhouses, 2-4 unit properties |
| Interest Rates | Above market rates | Market rates |
| Processing Time | As few as 2 weeks | 30-45 days |
| Closing Costs | Similar to conventional loans, may include renovation plan review fees | 2-5% of loan amount |
| Prepayment Penalty | None | None |
| Reserves Required | 3-6 months of reserves typically required | 2-6 months of PITI |
| Debt-to-Income Ratio | Not considered | Up to 43% |
| Maximum Loan Amount | $1,500,000 | $806,500 |
| Appraisal Requirements | Specialized appraisal considering after-repair value | Standard appraisal required |
| Occupancy Requirements | Investment property only | Primary residence for 12 months |
| Non-Warrantable Condos | Eligible with additional requirements | Not eligible |
| Manufactured Homes | Eligible if on permanent foundation | Eligible if on permanent foundation |
| ADU Properties | Eligible as investment property | Not eligible |
| Barndominiums | Eligible with proper appraisal and renovation plans | Not eligible |
| Tiny Homes | Eligible if meets minimum square footage requirements | Not eligible |
| Mixed-Use Properties | Eligible for residential portion | Not eligible |
| Rural Properties | Eligible | Eligible |
| Feature | Fix and Flip Loans | Conventional Loan |
|---|---|---|
| Who Qualifies | Experienced real estate investors, house flippers, property investors with renovation experience, those with stable income and good credit, and anyone wanting to purchase, renovate, and sell properties quickly | W-2 employees, salaried workers |
| Income Documentation | Standard income verification including W-2s, pay stubs, tax returns, and bank statements for down payment verification | W-2s, pay stubs, tax returns |
| Minimum Credit Score | 650 FICO score | 620 |
| Minimum Down Payment | 20-30% down payment | 3% |
| Private Mortgage Insurance | Not applicable | Private mortgage insurance (PMI) |
| Occupancy Type | Investment properties only | Primary residences, second homes, investment properties |
| Property Type | Distressed properties, fixer-uppers, properties needing renovation | Single-family homes, condos, townhouses, 2-4 unit properties |
| Interest Rates | Above market rates | Market rates |
| Processing Time | As few as 2 weeks | 30-45 days |
| Closing Costs | Similar to conventional loans, may include renovation plan review fees | 2-5% of loan amount |
| Prepayment Penalty | None | None |
| Reserves Required | 3-6 months of reserves typically required | 2-6 months of PITI |
| Debt-to-Income Ratio | Not considered | Up to 43% |
| Maximum Loan Amount | $1,500,000 | $806,500 |
| Appraisal Requirements | Specialized appraisal considering after-repair value | Standard appraisal required |
| Occupancy Requirements | Investment property only | Primary residence for 12 months |
| Non-Warrantable Condos | Eligible with additional requirements | Not eligible |
| Manufactured Homes | Eligible if on permanent foundation | Eligible if on permanent foundation |
| ADU Properties | Eligible as investment property | Not eligible |
| Barndominiums | Eligible with proper appraisal and renovation plans | Not eligible |
| Tiny Homes | Eligible if meets minimum square footage requirements | Not eligible |
| Mixed-Use Properties | Eligible for residential portion | Not eligible |
| Rural Properties | Eligible | Eligible |
Real-World Example: Fix and Flip Loans
The Experienced Investor's Successful Flip
Jennifer had been successfully flipping houses for five years when she found an excellent opportunity—a distressed 3-bedroom home in an up-and-coming neighborhood. The property was listed at $200,000 but needed significant work including a kitchen remodel, bathroom updates, new flooring, and fresh paint throughout. Based on her experience and market knowledge, she estimated the after-repair value at $350,000.
When she approached her local bank for financing, they were hesitant about the investment purpose and short timeline. Traditional lenders typically require owner occupancy and longer terms, making them unsuitable for fix and flip projects. The bank suggested she would need a conventional investment property loan with much stricter terms and longer processing time.
Frustrated but determined, Jennifer began researching alternative financing options and discovered that another lender offered fix and flip loans. This specialized program would allow her to finance both the purchase and renovation costs based on the after-repair value, with a short-term structure designed for quick turnaround.
The process was straightforward: she provided detailed renovation plans from her trusted contractor, a comprehensive budget breakdown, and documentation of her successful flip history. The lender approved her for a $250,000 fix and flip loan based on the $350,000 after-repair value, with a 12-month term and 25% down payment.
Within three weeks, she closed on the property and began renovations. The contractor completed the work on schedule, and she sold the property for $345,000 within 6 months, earning a significant profit after paying off the loan and renovation costs.
This story illustrates how fix and flip loans can provide the quick capital and flexible terms that experienced real estate investors need to capitalize on distressed property opportunities.
Did you know: Fix and flip loans require only 20-30% down payment.
Benefits & Considerations
Fix and flip loans offer significant advantages for real estate investors, but they also come with important considerations to weigh.
Key Benefits: Quick funding, after-repair value, flexible terms
- Quick funding for opportunities
- Move fast on distressed properties with streamlined underwriting and quick closing processes designed for investors.
- Based on after-repair value
- Loan amounts are based on the property's potential worth after renovations, often allowing higher financing than purchase price.
- Flexible terms for investors
- Short-term structure with 6-18 month terms designed for quick turnaround and profitable resale.
- Renovation fund releases
- Funds are released as renovation work progresses, ensuring you have capital when you need it.
- Investment-focused underwriting
- Underwriting criteria designed for real estate investors, not owner-occupants, making qualification easier for experienced investors.
- Proven solution
- Thousands of real estate investors have used fix and flip loans successfully to build profitable investment portfolios.
Important Considerations: Higher costs, timeline pressure, experience requirements
- Higher interest rates
- Interest rates are typically 8-15%, which is higher than conventional loans due to the short-term nature and investment purpose.
- Timeline pressure
- You must complete renovations and sell within the loan term, which requires careful project management and market timing.
- Experience requirements
- Lenders prefer borrowers with real estate investment experience and a proven track record of successful flips.
- Market risk
- If the market changes or you can't sell within the timeline, you may need to refinance or sell at a reduced price.
- Lender availability
- Not all lenders offer fix and flip loans, so you'll need to work with specialized lenders who understand real estate investing.
Frequently Asked Questions About Fix and Flip Loans
Get answers to the most common questions about fix and flip loans. Whether you're wondering about qualification requirements, renovation options, or how the process works, we've covered the essential information below.
What is a fix and flip loan?
How do fix and flip loans work?
Who qualifies for fix and flip loans?
What documents do I need for a fix and flip loan?
How much can I borrow with a fix and flip loan?
What is the minimum down payment for fix and flip loans?
How long do I have to complete the flip?
Do I need renovation experience for fix and flip loans?
What happens if I can not sell the property in time?
Can I use fix and flip loans for multiple properties?
How do lenders evaluate fix and flip projects?
What are the interest rates for fix and flip loans?
Can I refinance a fix and flip loan?
Next Steps: Continue With Your Mortgage
Fix and flip loans may provide a path to profitable real estate investing for experienced investors who need quick capital. Our listed loan officers understand real estate investing and can help determine if this program might fit your situation. They'll review your investment plans, assess eligibility, and guide you through the process.
For a no obligation conversation about your mortgage, contact Bradley Swearingen (#2577725) of Rain City Capital at 214-756-7076.
Bradley Swearingen
Loan Officer at Rain City Capital
Bradley Swearingen Customer Reviews
Read verified customer reviews for Bradley Swearingen at Rain City Capital. This is real feedback from real borrowers who used Bradley Swearingen and their colleagues for a mortgage loan.
"I recently had the pleasure of working with William Guyett at Rain City Capital for a hard money loan on my latest property flip. From the outset, William made the entire process not only smooth but impressively quick, which is crucial in the fast-paced real estate investment world. What stood out to me was the simplicity and efficiency of the rehab draw process. Often, this can be a point of frustration due to complicated procedures and delays, but William ensured everything was straightforward and hassle-free. His professionalism, knowledge, and dedication to customer service significantly contributed to the success of my project. I truly appreciated the personal attention and guidance William provided throughout the loan process. It's clear that he values his clients and goes above and beyond to meet their needs. If you're looking for a reliable and supportive hard money lender, I highly recommend William Guyett and Rain City Capital for your next investment project. Working with him was a fantastic experience, and I look forward to future opportunities to collaborate again."
"Carolina is the most professional, knowledgeable, positive, supportive, responsive, and proactive lender you will find! She makes other lenders look like amateurs. I would highly recommend Carolina for all of your lending needs and now that I have found her, will not be going with anyone else!"
"I had the pleasure of working with Carolina on my recent real estate purchase, and I couldn't be happier with the experience. From start to finish, she was amazing—extremely responsive, knowledgeable, and always available to answer my questions. Carolina made the loan process smooth and stress-free, keeping me updated every step of the way. Her professionalism and dedication truly stood out, and I felt supported throughout the entire transaction. I highly recommend Carolina to anyone in need of a reliable and attentive lender."
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Important Compliance Information
Disclaimer: This information is for educational purposes only. AnotherLender.com is not a lender and does not make loans. We connect borrowers with licensed mortgage professionals. All loan approvals are subject to lender underwriting guidelines and individual qualification. Rates and terms may vary. Consult with a qualified mortgage professional for personalized advice.