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 24-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 can cover up to 90% of the property's purchase price and can cover up to 100% of the property's renovation budget.  This allows buyers to come up with a relatively small amount of money and also allows them to flip multiple properties at once if need be.

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 make interest-only payments to keep costs low during the renovation, with the entire principal balance repaid once the home is sold.