A Fix and Flip loan is a short-term real estate investment loan designed for investors who purchase properties below market value, renovate them, and resell them for a profit.

These loans provide fast access to capital for both the purchase price and renovation costs, allowing investors to move quickly in competitive markets.

If you are buying distressed, outdated, or undervalued properties to improve and resell, a fix and flip mortgage may be the right solution.

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What Is a Fix and Flip Loan?

A fix and flip loan (sometimes called a hard money loan or bridge loan) is:

• Short-term financing (typically 6–18 months)

• Designed for investment properties only

• Based primarily on the property’s value, not just borrower income

• Structured around the property’s After-Repair Value (ARV)

Unlike traditional mortgages, these loans focus heavily on:

• The property’s renovation potential

• The projected resale value

• The investor’s exit strategy

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How Fix and Flip Loans Work

Most fix and flip loans include:

• Funding for the purchase price

• Financing for renovation costs (draw-based)

• Interest-only monthly payments during the renovation period

• Balloon payoff at sale or refinance

Loan approval is often based on:

• Loan-to-Value (LTV)

• Loan-to-After-Repair-Value (LTARV)

• Project feasibility

Because these are investment-focused loans, funding can occur much faster than traditional financing — often within days.

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Benefits of a Fix and Flip Loan

1. Fast Funding

Investors can often close within 7–10 days, allowing them to compete with cash buyers.

2. Financing for Renovations

Many programs fund both:

• Purchase price

• Rehab costs

Renovation funds are typically disbursed in draws as work is completed.

3. Interest-Only Payments

Monthly payments are often interest-only during the project, helping preserve cash flow.

4. Short-Term Structure

Loan terms typically range from 6 to 18 months — ideal for quick turnaround projects.

5. Scalable for Investors

Investors can leverage fix and flip loans repeatedly to grow their real estate portfolio.

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Who Qualifies for a Fix and Flip Loan?

While requirements vary, most lenders look at:

Real Estate Experience

• Previous flipping experience can strengthen approval

• First-time flippers may still qualify with strong project plans

Credit Score

• Often 620+

• Some lenders focus more on the deal than the borrower

Down Payment

• Typically 10%–20% of purchase price

• May vary depending on experience and credit

Detailed Project Plan

• Scope of work

• Budget breakdown

• Timeline

• Exit strategy (sale or refinance)

Financial Reserves

• Proof of funds for closing costs and contingencies

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Documentation Required for a Fix and Flip Loan

When applying, borrowers generally provide:

• Property purchase contract

• Renovation budget and contractor bids

• Property appraisal (including After-Repair Value / ARV)

• Credit report authorization

• Proof of available funds

• Entity documents (if purchasing under LLC or corporation)

Lenders analyze both the borrower and the strength of the deal.

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What Is After-Repair Value (ARV)?

ARV stands for After-Repair Value — the projected market value of the property after renovations are completed.

Fix and flip lenders commonly base approval on a percentage of ARV, such as:

• 70%–75% of ARV

Example:
If the ARV is $400,000, a lender may finance up to $280,000–$300,000 total project cost.

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Fix and Flip Loan vs. Traditional Mortgage

Fix and flip loans are designed for speed and flexibility — not long-term occupancy.

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Why Investors Choose Fix and Flip Loans

A fix and flip loan may be ideal if you:

• Are purchasing distressed or undervalued properties

• Need fast funding

• Plan to renovate and resell quickly

• Want leverage instead of using all cash

• Are building a real estate investment business

These loans provide the capital and flexibility investors need to maximize returns.

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Frequently Asked Questions About Fix and Flip Loans

1. How Long Is the Loan Term?

Most terms range from 6 to 18 months.

2. Do I Need Flipping Experience?

Experience helps but is not always required. Strong project planning improves approval chances.

3. Are Interest Rates Higher?

Yes, rates are typically higher than traditional mortgages due to short-term structure and investment risk.

4. Can I Buy in an LLC?

Yes. Many fix and flip loans are structured under an LLC or business entity.

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Ready to Fund Your Next Investment?

If you’re looking to purchase, renovate, and resell an investment property, we can help structure a fast and flexible financing solution.

Contact MORTGAGEinc today:
📧 info@mortgage-inc.com

Let’s fund your next profitable deal.