Fix and flip investing remains one of the most profitable strategies in real estate—when executed correctly. The difference between a successful flip and a financial disaster often comes down to one critical factor: how you finance the deal.
Having managed over $120M in real estate transactions and funded hundreds of rehab projects, we've seen every scenario imaginable. First-time flippers who doubled their money. Experienced investors who lost six figures on a single deal. The common thread in success stories? Understanding your financing inside and out before you make an offer.
This guide covers everything you need to know about fix and flip financing—from loan types and costs to timelines and exit strategies. Whether you're considering your first flip or scaling to multiple projects, this is the tactical playbook you need.
What is Fix and Flip Financing?
Fix and flip financing refers to short-term loans designed specifically for purchasing and renovating investment properties. Unlike traditional mortgages that span 15-30 years, fix and flip loans typically run 12-18 months—just long enough to buy the property, complete renovations, and sell for profit.
These loans differ from conventional financing in several fundamental ways:
Speed over process. Traditional mortgages can take 30-45 days to close. Fix and flip loans often close in 7-14 days, sometimes faster. When you're competing against cash buyers, speed matters.
Asset-based underwriting. Banks focus heavily on your personal income, credit history, and debt-to-income ratios. Fix and flip lenders focus primarily on the deal itself—the property's value, your renovation plan, and the projected after-repair value.
Interest-only payments. Most fix and flip loans require only interest payments during the loan term, preserving your cash for renovations. The principal is paid when you sell or refinance.
Higher rates, shorter terms. You'll pay more in interest—typically 9-13%—but you're only paying for 6-12 months, not 30 years. The total interest cost on a $300,000 flip loan held for 8 months is often less than a year of payments on a conventional mortgage.
Rehab funding included. The best fix and flip loans include not just acquisition funding but also the renovation budget, released in draws as work is completed.
Types of Fix and Flip Loans
Understanding your financing options is crucial for structuring profitable deals. Here are the primary loan types available for fix and flip projects:
Hard Money Loans
Hard money loans are asset-based loans from private lending companies. They're called "hard money" because they're secured by a hard asset—the property itself.
- Typical terms:
- Rates: 10-14%
- Points: 2-4 origination points
- LTV: 65-75% of purchase price
- ARV: Up to 70% of after-repair value
- Term: 6-18 months
Hard money is fast and flexible but comes at a premium. It's ideal for deals with significant equity cushion or investors who need to close quickly.
Bridge Loans
Bridge loans "bridge" the gap between buying a new property and selling or refinancing. In the fix and flip context, they function similarly to hard money but often come with better terms for qualified borrowers.
- Typical terms:
- Rates: 9-12%
- Points: 1-3 origination points
- LTV: Up to 85% of purchase price
- ARV: Up to 75% of after-repair value
- Term: 12-24 months
Bridge loans work well for investors with experience and strong track records who can negotiate better pricing.
Private Money Loans
Private money comes from individual investors rather than institutions. This might be a wealthy friend, family member, or private investor looking for better returns than traditional investments.
- Typical terms:
- Rates: 8-15% (highly negotiable)
- Points: 0-2
- Terms: Completely flexible
- Structure: Varies by agreement
Private money offers the most flexibility but requires building relationships. Many successful flippers fund their deals through a network of private lenders they've developed over years.
Construction Loans with Draws
Some fix and flip loans structure the renovation budget as a construction loan with scheduled draws. As you complete phases of the project, the lender releases additional funds.
- How draws typically work:
- Initial draw at closing (often 10-25% of rehab budget)
- Second draw after demo and rough work
- Third draw after major systems (electrical, plumbing, HVAC)
- Fourth draw after drywall and flooring
- Final draw after completion
Draw schedules protect both you and the lender. You're not sitting on unused borrowed money accruing interest, and the lender can verify work completion before releasing more funds.
Home Equity Lines of Credit (HELOCs)
If you have significant equity in your primary residence or other properties, a HELOC can provide cheap capital for flips.
- Typical terms:
- Rates: Prime + 0.5-2% (currently 8-10%)
- No points
- Revolving credit line
- 10-year draw period typical
HELOCs are the cheapest money available but come with risk—your home is collateral. Many experienced flippers use HELOCs strategically for down payments or carrying costs while using hard money for the bulk of project funding.
How Fix and Flip Loans Work
Let's walk through the mechanics of a typical fix and flip loan from application to payoff.
Step 1: Loan Application and Approval
- You'll submit basic information about yourself and the property:
- Purchase contract
- Renovation scope of work and budget
- Comparable sales supporting your ARV estimate
- Personal financial statement
- Track record (if you have prior flips)
Approval can happen in 24-72 hours with experienced lenders. At Arbitrust, we issue term sheets within 48 hours of receiving a complete application.
Step 2: Underwriting and Appraisal
- The lender orders an appraisal or BPO (broker price opinion) to verify:
- Current as-is value
- After-repair value based on your scope of work
- Feasibility of your renovation plan
They'll also verify your financial capacity to make payments and cover any cost overruns.
Step 3: Closing
- Closing typically happens at a title company. The lender funds:
- Purchase price (minus your down payment)
- Closing costs
- Initial renovation draw (if applicable)
- Interest reserve (funds to cover payments during the project)
Step 4: Renovation Period
- During renovation:
- You request draws as work is completed
- Lender sends an inspector to verify work
- Funds are released within 2-5 business days
- Interest accrues on funds disbursed
Step 5: Sale or Refinance
- When the property sells:
- Title company pays off your loan from sale proceeds
- Remaining funds (your profit) are distributed to you
Alternatively, you can refinance into a long-term loan (like a DSCR rental loan) if you decide to hold the property.
Typical Loan Terms
Here's what to expect from a competitive fix and flip loan in today's market:
| Term | Typical Range | |------|---------------| | Interest Rate | 9-13% | | Origination Points | 1-3% | | Loan Term | 12-18 months | | LTV (Purchase) | 80-90% | | LTC (Total Costs) | 85-90% | | ARV Maximum | 70-75% | | Minimum Credit Score | 620-680 | | Minimum Down Payment | 10-20% of purchase |
Fix and Flip Loan Requirements
Lenders evaluate fix and flip loans based on several key criteria. Understanding these helps you structure deals that get approved—and funded quickly.
Property Requirements
Location: Most lenders focus on specific markets. At Arbitrust, we lend nationally but have deep expertise in high-velocity markets where flips move quickly.
Property type: Single-family homes are easiest to finance. 2-4 unit properties work well too. Larger multifamily, commercial, and mixed-use properties require specialized lenders.
Condition: Properties can be in poor condition—that's the point of a flip—but they must be structurally sound. Major foundation issues, fire damage, or environmental contamination can make properties unfundable.
Borrower Requirements
Experience: First-time flippers can get funded, but you'll likely pay higher rates and need a larger down payment. As you build a track record, terms improve significantly.
Credit score: Most lenders require 620-680 minimum. Higher scores get better rates.
Liquidity: You'll need cash reserves beyond your down payment—typically 3-6 months of payments plus a contingency fund for rehab overruns.
Background: Criminal background checks and fraud screening are standard. Bankruptcies and foreclosures in the past 2-3 years can disqualify you.
Deal Requirements
Equity cushion: Lenders want to see room for error. If you're buying at 80% of as-is value with a solid ARV, you have cushion. Buying at 95% of value with a tight ARV? Much harder to fund.
Scope of work: Your renovation plan must be realistic and professionally prepared. Vague budgets like "kitchen and bath remodel - $30,000" won't cut it. Lenders want line-item budgets.
Exit strategy: You must demonstrate a clear path to repayment—usually sale or refinance—with realistic timelines.
Understanding LTV vs. ARV
Two acronyms dominate fix and flip financing: LTV (Loan-to-Value) and ARV (After-Repair Value). Understanding both is essential.
Loan-to-Value (LTV)
LTV measures your loan amount against the property's current value.
Formula: LTV = Loan Amount ÷ Current Property Value × 100
- Example: You're buying a property for $200,000 that appraises at $210,000. Your loan is $170,000.
- LTV = $170,000 ÷ $210,000 = 81%
Most lenders cap LTV at 80-90% of purchase price or appraised value, whichever is lower.
After-Repair Value (ARV)
ARV is what the property will be worth after your renovations are complete.
Formula: ARV = Current Value + Value Added by Renovations
- Example: Same property worth $210,000 as-is. After a $60,000 renovation, comparable sales support a value of $340,000.
- ARV = $340,000
Why ARV Matters for Flips
Here's where fix and flip financing gets interesting. Lenders don't just look at current value—they underwrite to ARV.
- ARV-based lending example:
- Purchase price: $200,000
- Renovation budget: $60,000
- Total project cost: $260,000
- ARV: $340,000
- Maximum loan at 75% ARV: $255,000
In this scenario, you could potentially finance nearly the entire project with only $5,000-10,000 down (plus closing costs and reserves). That's the power of ARV-based lending.
The 70% Rule
Many investors use the "70% rule" to evaluate flip deals:
Maximum Purchase Price = (ARV × 70%) - Renovation Costs
- Using our example:
- ARV: $340,000
- 70% of ARV: $238,000
- Minus renovation: $238,000 - $60,000 = $178,000 maximum purchase
This rule builds in profit margin and cushion for error. Properties meeting this threshold are typically easier to finance and more likely to be profitable.
Fix and Flip Costs Breakdown
Understanding your true costs is critical for projecting profits accurately. Too many investors focus on purchase price and renovation while underestimating holding and selling costs.
Acquisition Costs (2-5% of purchase price)
| Cost | Typical Amount | |------|----------------| | Origination points | 1-3% of loan amount | | Appraisal | $500-800 | | Title insurance | 0.5-1% of purchase price | | Closing fees | $1,000-2,000 | | Recording fees | $100-300 | | Inspection | $300-600 |
Holding Costs (Monthly)
These costs accumulate every month you own the property—time is literally money.
| Cost | Monthly Estimate | |------|------------------| | Interest payments | 0.75-1.1% of loan balance | | Property taxes | Varies by location | | Insurance | $150-400/month | | Utilities | $200-400/month | | Lawn/maintenance | $100-300/month | | Security/vacant property | $50-200/month |
- Example: On a $250,000 loan at 11% interest:
- Monthly interest: $2,292
- Taxes: $400
- Insurance: $250
- Utilities: $300
- Total monthly holding: $3,242
Over a 6-month project, that's $19,452 in holding costs alone.
Renovation Costs
Renovation costs vary wildly by market, property condition, and scope. Here are rough ranges:
| Project | Cost Range | |---------|------------| | Light cosmetic (paint, flooring, fixtures) | $15-30/sq ft | | Medium rehab (kitchen, baths, some systems) | $30-60/sq ft | | Heavy rehab (gut renovation) | $60-120/sq ft | | Addition/structural | $100-200+/sq ft |
- For a 1,500 sq ft house:
- Light cosmetic: $22,500-45,000
- Medium rehab: $45,000-90,000
- Heavy rehab: $90,000-180,000
Selling Costs (8-10% of sale price)
| Cost | Typical Amount | |------|----------------| | Real estate commission | 5-6% | | Seller concessions | 1-3% | | Transfer taxes | 0.5-2% (varies by state) | | Title and closing | 1% | | Staging | $2,000-5,000 | | Photography/marketing | $500-1,000 |
- Example on a $340,000 sale:
- Commission (5.5%): $18,700
- Concessions (2%): $6,800
- Transfer tax (1%): $3,400
- Closing costs: $3,400
- Staging/marketing: $3,000
- Total selling costs: $35,300
Total Cost Example
Let's put it all together for our example flip:
| Category | Amount | |----------|--------| | Purchase price | $200,000 | | Acquisition costs (3%) | $6,000 | | Renovation | $60,000 | | Holding costs (6 months) | $19,452 | | Selling costs (10%) | $34,000 | | Total Investment | $319,452 | | Sale price | $340,000 | | Gross Profit | $20,548 |
That's a 6.4% return on the $319,452 investment over 6 months—roughly 12.8% annualized. Profitable, but tight. This is why accurate cost estimation matters.
Creating a Rehab Budget
After funding hundreds of flips, we've learned that accurate budgeting separates profitable investors from those who lose money. Here's how to build a budget that holds up in reality.
Start with a Detailed Scope of Work
Walk the property with your contractor and document everything:
- Exterior:
- Roof (repair vs. replace)
- Siding and trim
- Windows and doors
- Landscaping
- Driveway/walkways
- Foundation (any cracks or issues?)
- Interior by room:
- Flooring (type and condition)
- Walls (drywall repair, paint)
- Ceilings (repair, texture, paint)
- Lighting and electrical
- Doors and hardware
- Built-ins and closets
- Systems:
- HVAC (age, condition, efficiency)
- Electrical panel (amperage, condition)
- Plumbing (galvanized? PEX? issues?)
- Water heater
- Kitchens and Baths:
- Cabinets
- Countertops
- Fixtures
- Tile work
- Appliances
Get Multiple Bids
- Never rely on a single contractor bid. Get at least three bids for major work. This:
- Validates pricing
- Reveals different approaches
- Gives you negotiating leverage
- Provides backup options
Build in Contingency
Things will go wrong. Hidden water damage. Termites behind walls. Electrical not up to code. Plan for it.
- Recommended contingency by project type:
- Light cosmetic: 10% contingency
- Medium rehab: 15% contingency
- Heavy rehab/older homes: 20-25% contingency
A $60,000 rehab budget should have $9,000-15,000 set aside for surprises.
Common Cost Overruns to Watch
Based on our experience, these items most frequently exceed budget:
Foundation issues: What looks like a minor crack can become a $15,000 problem.
Electrical upgrades: Older homes often need panel upgrades, rewiring, or bringing circuits up to code. Budget $3,000-10,000 if the electrical looks dated.
Plumbing surprises: Galvanized pipes, root intrusion, or improper venting can add $5,000-20,000.
HVAC replacement: That "working" HVAC system might fail inspection. Budget $5,000-12,000 if systems are 15+ years old.
Permit delays: Extended permit timelines mean more holding costs.
Scope creep: "While we're in there, we might as well..." adds up fast.
Timeline: From Purchase to Sale
Understanding realistic timelines helps you project holding costs accurately and set expectations.
Typical Fix and Flip Timeline
| Phase | Duration | |-------|----------| | Finding and analyzing deals | Ongoing | | Due diligence and inspection | 3-10 days | | Loan approval | 3-7 days | | Closing | 7-21 days from approval | | Permits (if needed) | 1-6 weeks | | Renovation | 4-16 weeks | | Final inspections | 1-2 weeks | | Listing and staging | 1-2 weeks | | Marketing/showings | 2-8 weeks | | Under contract to closing | 30-45 days | | Total Timeline | 4-9 months |
What Affects Timeline
Permit requirements: Some municipalities require permits for everything. Others are more flexible. Research local requirements before buying.
Contractor availability: In hot markets, good contractors are booked months out. Build relationships before you need them.
Scope of work: A cosmetic flip might take 4 weeks. A gut rehab could take 4 months.
Weather: Exterior work in winter markets can add weeks or months.
Inspection issues: Failed inspections require corrections and re-inspection.
Market conditions: Buyer demand affects how quickly properties sell.
How to Move Faster
Line up financing first. Get pre-approved before you find deals so you can close quickly.
Build contractor relationships. Have reliable contractors ready to start immediately.
Streamline decisions. Pick finishes and fixtures before closing. Create standard specifications for your flips.
Parallel path permits. Submit permit applications the day after closing while doing non-permitted prep work.
Price correctly. Properties priced right sell in days, not months. Don't overprice hoping for a unicorn buyer.
Exit Strategies
Every flip should have multiple exit strategies planned before you close. Markets change, surprises happen, and flexibility protects your capital.
Strategy 1: Sell for Profit (Primary Exit)
This is the standard flip exit—renovate and sell to an end buyer or another investor.
- Best when:
- Market conditions favor sellers
- ARV projections are accurate
- Renovation completed on budget
- You need to recycle capital quickly
Strategy 2: Refinance to Rental (BRRRR)
Convert your flip to a long-term rental by refinancing into a DSCR (Debt Service Coverage Ratio) loan.
- Best when:
- Sale prices are soft
- Property cash flows well as a rental
- You want to build a portfolio
- Rent growth projections are strong
- How it works:
- Complete renovation
- Rent the property
- Refinance based on rental income (DSCR loan)
- Pull out capital to reinvest
We'll cover this "flip to rental" strategy in more detail below.
Strategy 3: Wholesale the Contract
If you can't or don't want to complete the flip, assign or sell the contract to another investor.
- Best when:
- Personal circumstances change
- Project scope exceeded expectations
- You found a better deal
- You lack capital to complete
Downside: You'll typically leave significant profit on the table.
Strategy 4: Seller Financing
Sell the property but carry the financing yourself, earning interest on the note.
- Best when:
- Buyers can't qualify for traditional financing
- You want ongoing income
- Interest rates are high (you can offer better terms)
- You don't need immediate capital
Why Multiple Exits Matter
We've seen investors forced to sell at break-even or worse because they only planned for one exit. When the market shifted, they had no alternatives.
- Before funding any deal, ask yourself:
- What if it sells for 10% less than projected?
- What if it takes 6 months longer to sell?
- What if renovation costs 25% more than budgeted?
If you can't survive those scenarios, the deal is too risky.
Common Fix and Flip Mistakes
Having funded hundreds of flips and managed our own portfolio, we've seen every mistake in the book. Learn from others' expensive lessons.
Mistake #1: Underestimating Rehab Costs
This is the most common and most deadly mistake. Investors see a property, get excited, and estimate renovation costs based on best-case scenarios.
Reality check: Walk every property with a contractor before making an offer. Add 15-20% contingency. If the numbers only work with optimistic estimates, the deal doesn't work.
Mistake #2: Overestimating ARV
Cherry-picking the highest comp to justify a purchase is a recipe for disaster. That $400,000 sale was probably updated to a higher level than you're planning, had a better lot, or benefited from unusual circumstances.
Reality check: Use conservative comps. Adjust for differences honestly. If your ARV needs the perfect comp to work, find a different deal.
Mistake #3: Holding Too Long
Every month you hold a property costs thousands in interest, taxes, insurance, and utilities. Investors who wait for the "perfect" offer often end up making less than those who priced correctly from day one.
Reality check: Price to sell in 30 days. A quick sale at $340,000 usually nets more than a slow sale at $355,000 after 4 months of additional holding costs.
Mistake #4: Wrong Contractor
Bad contractors cause cost overruns, timeline extensions, and quality issues. They can turn a profitable flip into a money pit.
Reality check: Check references. Verify licensing and insurance. Start with a small project before trusting them with a major rehab. Pay in draws based on completed work, never upfront.
Mistake #5: Not Having a Backup Exit
Markets shift. Life happens. If your only option is selling at full ARV in a hot market, you're one recession away from serious trouble.
Reality check: Run numbers for rental income. Know your break-even sale price. Have cash reserves to weather extended timelines.
Mistake #6: Emotional Decision-Making
Falling in love with a property or getting caught in bidding wars leads to overpaying. Getting frustrated and cutting corners on renovation leads to quality issues that hurt resale.
Reality check: Stick to your numbers. Walk away from deals that don't meet your criteria. There will always be another property.
Mistake #7: Inadequate Due Diligence
Skipping inspections, not researching neighborhoods, or ignoring permit requirements can surface expensive surprises after closing.
Reality check: Inspect everything. Research the neighborhood thoroughly. Understand local permit requirements. Know what you're buying.
Flip to Rental: The Hybrid Strategy
One of the most powerful strategies in real estate combines fix and flip with long-term rental investing. This "flip to rental" or BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy provides flexibility and wealth-building potential.
How It Works
When to Flip to Rental
This strategy makes sense when:
Sale prices are soft: If you'd sell below projections, holding might be smarter.
Cash flow is strong: The property generates good rental income relative to value.
You want to build wealth: Long-term appreciation plus cash flow beats short-term profits for wealth building.
Market timing is poor: Selling into a down market locks in losses; holding lets you wait for recovery.
The Numbers Example
Let's revisit our example property:
- Fix and Flip Exit:
- Sale price: $340,000
- Total costs: $319,452
- Profit: $20,548
- Flip to Rental Exit:
- Property value after renovation: $340,000
- DSCR refinance at 75%: $255,000
- Original flip loan: $250,000
- Cash remaining after refinance: $5,000
- Monthly rent: $2,400
- Monthly PITI (estimated): $1,900
- Monthly cash flow: $500
In the rental scenario, you pull out almost all your capital, keep a property worth $340,000 (with $85,000 equity), and generate $6,000/year in cash flow. Over 5 years, with 3% appreciation and principal paydown, your equity could grow to $150,000+.
DSCR Loans Explained
DSCR (Debt Service Coverage Ratio) loans qualify based on property income rather than personal income. They're perfect for the flip-to-rental exit.
- How DSCR works:
- DSCR = Monthly Rent ÷ Monthly PITI
- Most lenders require 1.0-1.25 DSCR minimum
- Example: $2,400 rent ÷ $1,900 PITI = 1.26 DSCR (qualifies)
- Typical DSCR loan terms:
- Rate: 7-8.5%
- LTV: 75-80%
- Term: 30 years
- Prepayment penalty: 3-5 years (declining)
- Minimum DSCR: 1.0-1.25
At Arbitrust, we offer both fix and flip loans and DSCR refinances, making it easy to execute this strategy with a single lender relationship.
How Arbitrust Finances Fix and Flips
We built Arbitrust specifically to serve real estate investors with fast, flexible financing. Here's what makes our fix and flip program different.
Our Fix and Flip Program
Loan amounts: $75,000 - $3,000,000+
LTV: Up to 90% of purchase price
LTC: Up to 90% of total project cost
ARV: Up to 75% of after-repair value
Rates: Starting at 9.5%
Points: Starting at 1.5 origination
Terms: 12-18 months with extension options
Experience: We fund first-time flippers (with reasonable deals)
48-Hour Funding Process
We move fast because we understand that speed wins deals.
Day 1: Submit your deal. Include purchase contract, renovation scope of work, and supporting comps.
Day 1-2: We review and issue a term sheet within 48 hours.
Day 3-7: Underwriting and appraisal. We order a BPO or full appraisal depending on loan size.
Day 7-14: Clear to close. Title work and closing docs prepared.
Closing: Funds disbursed. You own the property.
For experienced investors with a track record, we can close even faster.
Our Draw Process
We release renovation funds efficiently:
No waiting weeks for inspections. No bureaucratic delays. We want your project moving as much as you do.
What We Look For
Strong deals: We focus first on the property and the numbers. Does the deal make sense? Is there adequate cushion for surprises?
Realistic projections: We've seen enough deals to spot inflated ARVs and underestimated rehab budgets. Bring us real numbers.
Capable borrowers: We work with first-time flippers, but you need to demonstrate you can execute—whether through construction experience, a strong contractor relationship, or a mentor who's done it before.
Clear exits: We want to fund loans that get repaid. Show us your sale strategy and backup plans.
Beyond the First Deal
Many of our borrowers started with a single flip and now do 10-20 deals per year with us. As your track record grows, your terms improve:
We're building long-term relationships with serious investors.
FAQ: Fix and Flip Financing
How much down payment do I need for a fix and flip loan?
Typically 10-20% of the purchase price, plus closing costs and reserves. The exact amount depends on your experience, the deal structure, and the lender. First-time flippers usually need more down payment; experienced investors with strong track records can often put less down.
Can I get a fix and flip loan with bad credit?
It's harder, but possible. Most lenders require 620-680 minimum credit scores. Below that, you'll need more down payment, a stronger deal, or a co-borrower with better credit. Focus on deals with more equity cushion if your credit is challenged.
How long does it take to get approved?
With Arbitrust, you'll have a term sheet within 48 hours of submitting a complete application. Full underwriting and closing typically takes 7-14 days. Some deals close even faster.
What if my renovation goes over budget?
This is why contingency reserves matter. If you exceed your approved renovation budget, you'll need to fund the difference yourself. For significant overruns, you may be able to modify your loan with additional funds, but this requires re-underwriting and appraisal.
Can I live in the property while renovating?
Typically no. Fix and flip loans are for investment properties, not owner-occupied homes. Living in the property would violate most loan agreements and could trigger default provisions.
What happens if I can't sell the property?
You have options: extend the loan term (most lenders allow extensions for a fee), refinance into a rental loan, sell at a lower price, or bring the property to market as a rental. Having backup exit strategies planned before you buy prevents panic decisions.
Do I need experience to get a fix and flip loan?
No, but it helps. First-time flippers can get funded with strong deals and reasonable terms. Having construction experience, a mentor, or a reliable general contractor strengthens your application.
How are renovation funds released?
Typically in draws as work is completed. You'll submit a draw request, the lender inspects the work (photos or in-person), and funds are released within a few business days. Initial draws at closing vary by lender—some release 10-25% upfront for materials.
What's the difference between hard money and bridge loans?
The terms are often used interchangeably, but generally: hard money focuses heavily on the asset with less emphasis on borrower qualification, while bridge loans may consider borrower strength more heavily and offer better terms to qualified investors. Both serve the same purpose—short-term financing for investment properties.
Can I use a fix and flip loan for rentals?
Fix and flip loans are designed for short-term holding (12-18 months), not long-term ownership. If you want to hold a property as a rental, you'll need to refinance into a DSCR or conventional rental loan after stabilization.
What properties qualify for fix and flip loans?
Most residential properties qualify: single-family homes, condos, townhomes, and 2-4 unit properties. Some lenders also finance small multifamily (5-20 units) and mixed-use properties. Vacant land, ground-up construction, and large commercial properties typically require different loan products.
How do I find good fix and flip deals?
Successful flippers use multiple channels: MLS (with an investor-friendly agent), wholesalers, direct mail marketing, driving for dollars, foreclosure auctions, and networking. Building a deal pipeline is as important as knowing how to renovate.
Getting Started with Your First Flip
If you're ready to pursue fix and flip investing, here's your action plan:
The investors who build sustainable, profitable fix and flip businesses approach it systematically. They treat it as a business, not a get-rich-quick scheme. They build relationships with lenders, contractors, and agents who help them succeed deal after deal.
Ready to fund your next fix and flip? Contact Arbitrust today for a 48-hour term sheet on your deal.
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Arbitrust Lending provides financing for fix and flip projects nationwide. We offer competitive rates, fast closings, and experienced support from a team that understands real estate investing from the operator's perspective.
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Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Real estate investing involves risk, including the potential loss of capital. Past performance is not indicative of future results. Loan terms, rates, and availability vary based on borrower qualifications, property characteristics, and market conditions. Consult with qualified professionals before making investment decisions. Arbitrust Lending is a private lender; we are not a bank or credit union. All loans are subject to underwriting approval.
