Fix and Flip Loans

Fix and flip loans are short-term, asset-based financing solutions designed for real estate investors who purchase properties, renovate them, and resell them for a profit within a 6- to 12-month timeframe. Unlike traditional mortgages, lenders focus primarily on the after-repair value (ARV) of the property rather than the borrower’s personal income or credit score. These loans generally cover both the purchase price and renovation costs, frequently offering up to 90% of the project's loan-to-cost (LTC) ratio, making them a popular choice for buyers.

The fix and flip loan process involves an initial advance to secure the property, followed by "draws"—funds released in stages as renovations are completed. Borrowers usually make interest-only payments to keep costs low during the renovation, with the entire principal balance repaid through a balloon payment once the home is sold.