Hard Money Specialists · Nationwide
Fix and Flip Loans for Real Estate Investors
Buying a property that needs work, fixing it up and selling it on takes fast, flexible money. Fix and flip loans are built for exactly that. We give free specialist help to investors across the US and help you explore financing with hard money lenders who fund purchase and renovation projects.
Planning a fix-and-flip project? Tell us about your property, purchase price and renovation plans to explore specialist financing options.
What Are Fix and Flip Loans?
A fix and flip loan is short-term financing for an investment property you plan to buy, renovate and sell. Terms tend to run for months rather than years, and the loan is secured against the property itself.
Banks often struggle with homes in poor condition or deals that need to close quickly. Hard money fix and flip loans fill that gap. The lender looks closely at the property, the renovation plan and what the home should be worth once finished, alongside your own finances and experience.
Some investors use the same structure to renovate and then keep the property as a rental, refinancing onto a longer-term loan. If you want a broader grounding first, our guide to how hard money loans work covers the basics.
How Do Hard Money Fix and Flip Loans Work?
Every lender has its own process, but most fix and flip financing follows a similar path from first conversation to final repayment.
Step 1
Find the property
You identify a home that needs work and agree a price. The numbers should work before you approach a lender, not after.
Step 2
Share the deal
You send the purchase price, a renovation budget, your ARV estimate, your available cash and how you plan to exit.
Step 3
Underwriting
The lender reviews the property, orders a valuation, checks title and insurance and looks at your experience and finances.
Step 4
Closing
If the lender is satisfied, it issues terms, you sign and the purchase completes. Renovation funds are usually held back for later.
Step 5
Renovation and draws
As each stage of work is finished, an inspector checks it and the lender releases the agreed portion of the budget.
Step 6
Repayment
You sell the property, or refinance it, and the loan is repaid in full along with interest and any exit costs.
Financing the Purchase and Renovation
Most fix and flip loans have two parts: money toward buying the property and money toward the work. Lenders size each part using a few simple ratios.
Loan-to-cost (LTC) compares the loan with the total cost of the project, meaning purchase price plus renovation budget. It shows how much of the project you are funding yourself.
Loan-to-value (LTV) compares the loan with the property's current value. On a flip, that is the "as-is" value before any work.
After-repair value (ARV) is what the home should be worth once renovated. Many lenders cap the total loan at a share of ARV so there is room for costs and a sale.
Your equity is the cash you put in. Lenders want to see you have something at stake, and enough left over to cover closing costs and keep the project moving.
Draw schedules control how renovation money is released. Rather than paying the full budget at closing, the lender pays in stages after each phase of work is inspected. Build that rhythm into your contractor agreement so nobody is left waiting for payment.
The exact percentages vary between lenders and deals, so treat any figure you see online as a starting point for conversation rather than a promise.
Planning a fix-and-flip project? Tell us about your property, purchase price and renovation plans to explore specialist financing options.
Example Fix and Flip Financing Scenario
Hypothetical scenario
- Purchase price
- $200,000
- Renovation budget
- $60,000
- Estimated after-repair value
- $350,000
Say an investor agrees to buy a dated three-bedroom house for $200,000 and plans $60,000 of work, bringing the total project cost to $260,000. Their research suggests the finished home could sell for around $350,000.
A lender would start by testing those numbers. It would want its own view of the as-is value and ARV, usually through an appraisal, and would check the renovation budget line by line against the scope of work. It would then decide how much of the purchase and how much of the renovation it is prepared to fund, based on its own LTC and ARV limits.
Whatever the lender does not cover becomes the investor's contribution, along with closing costs, interest during the project and a contingency. The renovation portion would most likely be released in draws as work is completed.
Finally, the lender would look at the exit. Here the plan is a resale, so it would ask whether comparable homes have sold near that price recently and how long they took. A sensible investor also checks what happens if the sale takes longer or the price comes in lower.
Actual loan amounts, pricing and contribution would depend entirely on the lender, the property and the borrower.
What Do Fix and Flip Lenders Look For?
Property condition
What state the home is in today and whether the planned work fixes the problems that matter to buyers.
Renovation scope
A line-by-line budget, contractor bids where possible, and a sensible contingency for things you find once walls come down.
Investor experience
Previous projects help, but a clear plan and a capable contractor can carry weight for newer investors.
Realistic ARV
Recent comparable sales of similar finished homes nearby. Lenders tend to discount optimistic estimates.
Available funds
Cash for your contribution, closing costs, interest payments and overruns, with something left in reserve.
Exit strategy
A credible sale plan, or a refinance option you have actually checked, with time to spare before the loan matures.
Fix and Flip Loan Costs and Considerations
Hard money is usually more expensive than a long-term mortgage, so the real question is whether the project still makes money once every cost is counted. Rates and fees differ between lenders and deals, so get them confirmed in writing.
Interest
Usually charged monthly and often interest-only. On some loans it accrues only on funds drawn so far.
Origination fees
Many lenders charge a fee based on the loan amount, typically paid at closing.
Closing costs
Appraisal, title, legal, recording and insurance costs add up and need to be in your budget from day one.
Holding costs
Taxes, insurance, utilities and loan interest keep running every month the property is not sold.
Draw and inspection fees
Some lenders charge for each inspection or draw request. Ask how many draws you are allowed.
Contingency
Older homes hide surprises. A buffer protects the project when the budget or timeline slips.
Before you sign, run the deal on a pessimistic case: a few extra months of holding costs, a budget overrun and a lower sale price. If the numbers still work, you have a project worth financing.
How to Finance a Fix & Flip With a Hard Money Loan
A short walk-through of how investors put fix and flip financing together, from first numbers to final sale.
How to Finance a Fix & Flip With a Hard Money Loan
Video coming soon
How to Apply for Fix and Flip Financing
Having this ready makes the first conversation faster and helps a specialist point you toward the right lender.
- Property address and purchase contract, or the price you expect to pay
- Detailed renovation budget and scope of work, with contractor bids if you have them
- Your ARV estimate and the comparable sales behind it
- Proof of funds for your contribution and reserves
- A summary of any previous projects you have completed
- Your planned exit: resale timeline or refinance plan
- The entity you will buy in, such as an LLC, if applicable
Investing in a particular market? See our guides for Dallas, Atlanta and Jacksonville, or read about how our process works.
Frequently Asked Questions About Fix and Flip Loans
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Planning a fix-and-flip project? Tell us about your property, purchase price and renovation plans to explore specialist financing options.
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Share the basics and a specialist will review your options with you. All credit considered.