Fix & Flip Financing is a specialized loan product designed for real estate investors who purchase distressed properties, renovate them, and sell them for a profit. These short-term loans typically range from 6-24 months and offer unique features tailored to renovation projects.

Key Features:

• Quick closing timelines (often 5-15 business days)
• Funding for both purchase and renovation costs
• Interest-only payments during the renovation period
• Loan amounts based primarily on the property’s ARV (After Repair Value)
• Less emphasis on borrower income verification compared to traditional loans
• Higher interest rates than conventional mortgages due to increased risk and shorter terms

Loan Structure:

• Purchase Financing: Usually 75-100% of the purchase price
• Renovation Financing: Typically 75-100% of renovation costs
• Interest rates: Generally range from 8.99 – 12% (rates as of early 2025)
• Points: 1-3 points depending on borrower experience and project scope
• Reserve Requirements: Usually 6-12 months of carrying costs

Qualification Requirements:

• Credit score requirements (typically 660+)
• Previous flip experience (can be zero, but many fix & flip lenders require 1-3 completed projects)
• Detailed scope of work for renovations
• Exit strategy documentation
• Proof of funds for down payment and reserves

Best Practices for Borrowers:

• Have contingency funds beyond minimum requirements
• Work with experienced contractors who understand flip timelines
• Maintain detailed project timelines and budgets
• Stay in regular communication with the lender about project progress
• Consider pre-approval to strengthen purchase offers

Risk Mitigation:

• Thorough property inspection before purchase
• Conservative renovation budget estimates
• Multiple exit strategy options
• Clear understanding of local market conditions
• Strong contractor relationships and backup options

Summary:

Fix & Flip Financing provides short-term loans (6-24 months) for real estate investors to purchase, renovate, and resell properties. These loans fund up to 100% of purchase price and 100% of renovation costs, with rates from 8.99% – 12%. Quick closings, minimal income verification, and interest-only payments during renovation make them ideal for investors needing fast, flexible funding for property flips.