What is a Fix and Flip Loan?

A fix and flip loan is a type of loan specifically designed for real estate investors who aim to purchase a distressed or run-down property, renovate (“fix”) and subsequently sell or “flip” it for a profit. These loans provide investors with the necessary funds to cover both the purchase price of the property and the renovation costs. These loans are short-term, usually up to a year. That is usually more than enough time to get your property purchased, fixed, and sold.

We also offer a Fix and Hold loan if you want to repair the home and keep it as a rental property. If you realize this idea is a great way to build equity, we also offer a few different renovation loans for homeowners.

Benefits of Fix and Flip Home Loans

Fix and flip home loans offer a range of benefits for real estate investors looking to renovate and resell properties. Since your down payment is based on the purchase price and all improvements, your total cash out of pocket may only be 20-25% of the entire project.

Some lenders offer interest-only payments during the renovation period, which can significantly reduce the financial burden on investors. Another important advantage of fix and flip loans is that they are underwritten based on the investment property itself rather than the borrower’s personal income. This loan type may also help investors minimize their personal liability and protect their assets by financing through a separate entity.