Fix and flip · NMLS #1707407

Fix and Flip Loans for Real Estate Investors

A fix and flip loan is a short-term loan that covers the purchase of a property and the cost to renovate it. You pay interest only while you work, then repay the loan when you sell or refinance. Approval is based on the deal and your experience, not your tax returns.

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85–95%of the purchase price

100%of the rehab budget

70–80%max of after-repair value

No tax returnsqualify on the deal

The basics

How fix and flip loans work

We shop your flip with multiple private and wholesale lenders, so you get leverage and pricing that fit your experience level. First flip or fiftieth, there's a lender for the project.

The lender funds most of the purchase at closing and holds your renovation budget in reserve. As each phase of work is finished, an inspector confirms it and the lender releases that portion, called a draw. Interest is usually charged only on the money drawn so far.

Most loans run 12–24 months, with extensions available. You pay off the loan when you sell, or you refinance into a long-term DSCR loan and keep the property as a rental.

Requirements

Fix and flip loan requirements

These are typical 2026 market ranges across the lenders we work with.

Requirement	Typical range
Credit score	650–660 minimum at most lenders
Experience	Not required; experienced flippers get more leverage and lower rates
Purchase financed	85–95% of the purchase price
Rehab financed	Up to 100% of the renovation budget
Maximum of after-repair value (ARV)	Usually 70–80%
Loan amount	$75,000 to $2.5 million+
Term	12–24 months, interest-only
Liquidity	Cash for the down payment and closing costs, plus reserves (often several months of interest)
Borrower	Usually an LLC with a personal guarantee; non-owner-occupied only

Leverage

How much can you borrow?

The loan is capped by two numbers: a share of your total project cost (purchase plus rehab), and a share of the after-repair value. You get whichever is lower.

Example: you buy a house for $250,000 with a $60,000 rehab, and the ARV is $425,000.

Total cost is $310,000. At 90% of purchase and 100% of rehab, the loan is $225,000 + $60,000 = $285,000.
At 75% of ARV, the cap is $425,000 × 0.75 = $318,750.
The lower figure, $285,000, applies. You bring about $25,000 plus closing costs.

First-time flippers usually see lower limits, often around 85% of cost and 70% of ARV. Heavy renovations, additions and changes of use can reduce leverage further. Check your projected values against local sales, and use the FHFA House Price Index to see how prices are trending in your area.

Rates and costs

Fix and flip rates and costs

Fix and flip loans cost more than long-term mortgages because they're short and higher-risk. Here's what goes into the cost:

Interest rate: depends mainly on your flipping experience, how much of the cost you finance and the deal itself. Rates are usually fixed and interest-only, and we'll quote your actual rate once we see the deal.
Points: usually 1–2 points (1–2% of the loan) at closing. Some lenders defer part of it to payoff.
Other fees: appraisal or valuation, draw inspections (often about $200 each), title and legal.
Prepayment: most fix and flip loans have no prepayment penalty, so you can sell early.

The process

Draws, timelines and closing

Closing: purchases often close in 5–10 business days, faster with clean title.
Draws: you submit photos or an inspection after each phase; funds typically release in 1–2 business days.
Budget: a detailed scope of work with line-item costs speeds approval and draws.
Extensions: if the project runs long, most lenders offer 3–6 month extensions for a fee.

From the broker

3 fix and flip mistakes that cost investors the most

"Most flips don't go wrong during the rehab. They go wrong at the exit. The ARV was built on bad comps, the refinance runs into a seasoning rule nobody mentioned, or a price cut on the listing quietly shrinks the cash-out you were counting on. I ask about your exit on day one, before you close on the flip loan."

— Trevor Gravink, Mortgage Broker, ReBroker Buddy (NMLS #1707407)

1. Planning a refinance without checking seasoning. This is where I see flips get stuck most. You finish the rehab, the house is worth far more, and you plan to refinance into a DSCR loan and pull your cash back out. Then you learn about seasoning: how long you must own the property before a lender will use the new appraised value. Many DSCR lenders want around 6 months of ownership for a cash-out refinance at full appraised value. Before that, some will only lend against what you paid plus documented rehab costs, and some won't do cash-out at all. Meanwhile, your flip loan may come due first. What to do: map the timeline before you buy. Know your flip loan's term and extension cost, keep every rehab receipt and invoice, and ask which lenders allow shorter seasoning. Some do, and finding them is part of what I shop for.

2. Trusting the ARV without doing your own homework. Your whole loan is sized off the after-repair value, so a bad ARV hurts twice: the appraisal comes in low, the loan shrinks, and you bring more cash at closing and again at the refinance. Realtors are a great resource, but I regularly get comps that would never hold up with an appraiser: houses miles away, homes that are listed but haven't sold, or sales in a completely different subdivision. Appraisers lean on closed sales, usually from the last several months, as close as possible, in the same neighborhood, and similar in size, age, beds, baths and finish level. What to do: pull your own sold comps, throw out anything that's only listed, and build your ARV from the conservative end of the range. If the deal only works at the top comp, it's a thin deal.

3. Cutting the list price without running the refinance numbers. A lot of investors list the finished house as plan A and keep a cash-out refinance as plan B. If the house sits and you drop the price, that cut can follow you. On a cash-out refinance, many lenders want the property off the market for a period of time (often 6 months), and some will cap the value at the most recent list price. That means each price cut can lower the value a refinance lender will use, and lower the cash you can pull out. What to do: before you drop the price, call me. I'll run the refinance at the new number so you can see exactly what the cut costs you if you end up holding the property instead of selling it.

Weigh it up

Pros and cons of fix and flip loans

Pros	Cons
Finance most of the purchase and 100% of rehab	Higher rates and points than long-term loans
Approval based on the deal, not your income	Short terms create pressure to finish on time
Fast closings help you win deals	Draws release after work is done, so you front each phase
Interest only on drawn funds	Personal guarantee usually required
First-time flippers can qualify	Lower leverage until you have experience

Rates and costs

Exit strategies: sell or refinance

Sell (flip): list the finished property and repay the loan from the sale.
Refinance and hold (BRRRR): refinance into a 30-year DSCR loan based on the new rent and value, then pull out cash for the next deal. See using a DSCR loan for BRRRR and run the numbers with our BRRRR calculator.
Bridge to rental: if you're not renovating, a bridge loan can buy the property fast and a DSCR loan takes it out later. DSCR vs hard money.

Planning ground-up construction instead? Ask about new-construction loans, which typically finance 85–90% of total cost. See DSCR construction loans.

What clients say

Reviews from our clients

FAQ

Fix and flip loan FAQ

Can I get a fix and flip loan with no experience?

Yes. Many lenders fund first-time flippers, usually at lower leverage, around 85% of cost and 70% of ARV, and at a slightly higher rate.

What credit score do I need?

Most lenders want 650–660 or higher. A higher score and more completed flips get you better terms.

How fast can I close?

Often in 5–10 business days on a purchase, sometimes faster.

Do fix and flip loans require income verification?

Usually not. Lenders focus on the property, the ARV, your budget, your experience and your liquidity.

What is ARV?

After-repair value: the appraiser's estimate of what the property will be worth once the renovation is complete. Most lenders cap the total loan at 70–80% of ARV.

Is there a prepayment penalty?

Most fix and flip loans have none, so you can sell as soon as the project is done.

Can I live in the property?

No. Fix and flip loans are business-purpose loans for investment properties only.

How soon can I refinance a flip into a DSCR loan?

It depends on the lender's seasoning rules. Many want about 6 months of ownership before they'll use the new appraised value for a cash-out refinance. Before that, some limit the loan to your purchase price plus documented rehab costs. Plan this before you buy so your flip loan doesn't come due first.

Will dropping my list price affect a refinance?

It can. Some lenders cap the value at the most recent list price and want the property off the market before a cash-out refinance. Run the refinance numbers before you cut the price.

Keep exploring

More investor loans

Get started

Get your fix and flip loan quote

Answer a few quick questions about the property and your plans. There's no credit check to see your options, and we'll shop your scenario across our lenders.

Prefer to talk first? Call (619) 404-6637 or book a free consultation.

Business-purpose loans for non-owner-occupied investment properties. Programs, guidelines and ranges shown are typical of the wholesale lenders we work with and can change at any time. Not a commitment to lend. Broker Buddy LLC, Trevor Gravink NMLS #1707407.