Frequently Asked Questions

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A fix and flip loan is a short-term investment loan used to purchase and renovate a property with the intention of selling it or refinancing it after improvements are complete. These loans are structured around the property’s value and project scope rather than traditional income documentation. 

Fix and flip loans typically finance a portion, if not all, of the purchase price and renovation costs. Rehab funds are released in stages of draws as work is completed, and the loan is repaid when the property is sold or refinanced. 

Many fix and flip loans can close significantly faster than traditional mortgages, depending on the project details, borrower experience, and documentation readiness.  Typically we close fix and flip loans between 10-15 days, and sometimes in as little as 5 days.  These timelines are heavily reliant on borrower and 3rd party response times.  In other words, the lenders can only move as quickly as you and your team can.

Most fix and flip loans focus on the deal itself rather than personal income or debt.  Traditional tax returns are often not required, making these loans attractive to self-employed investors. 

ARV stands for After Repair Value — the estimated market value of the property once renovations are completed. Fix and flip loan amounts are often based in part on ARV rather than just the purchase price. 

Yes. Fix and flip loans can be used to refinance an existing investment property, either to complete renovations or to access capital before selling or transitioning to long-term financing.  Mid-Construction refinancing is also possible where a "cash out" portion of existing equity may be accessed in addition to obtaining rehab funds hold back within the same loan.

Yes. Many investors use fix and flip loans for the Buy, Rehab, Rent, Refinance, Repeat (BRRRR) strategy, refinancing into long-term rental financing or to be sold once renovations are completed.

Experience requirements vary by loan program. Some lenders require previous projects, while others offer options for newer investors with strong deals.  Typically, the more experience a borrower has, the better loan terms that will be available such as lower rates and fees.

Fix and flip loans are commonly used for single-family homes, townhomes, 2-4 unit multi-family properties, and other residential investment properties needing renovation.  Several of our capital resources also allow 5+ unit multifamily properties but do require proven experience with this collateral type.  All properties must be non-owner occupied.  Fix and flip lenders lend on investment properties only.  

Yes. Most all fix and flip loans include 100% of the renovation or rehab funds, which are disbursed in stages as work is completed and inspected. 

Fix and flip loans and hard money loans share similarities, but fix and flip loans are specifically structured for renovation projects and investor exit strategies. The best option depends on project scope, timeline, and financing goals. 

Credit score requirements vary by program and lender. Approval is often based on the overall strength of the deal rather than credit alone.   Generally speaking, most lenders require a mid-FICO of 660-680 or higher to qualify.  However, some programs have no FICO requirements at all.

Most of the time, yes.  Reserves are important as they show a borrower has means to not only close the loan, but also begin renovations with cash available to them.  This ensures the borrower can complete some work in order to request their first draw for reimbursement.  There are some exceptions to needing reserves, but most of the time the requirement involves a percentage of the rehab budget, 3-6 months of interest only payments, in addition to enough funds for down payment and closing costs/fees.  This detailed information will be provided on each quote that is issued to you.

Yes, however, there are very strict rules to maintain your IRS tax shelter when using 1031 exchange funds.  We will work closely with the borrower and their 1031 intermediary to ensure the property and lender's note meet the IRS requirements.  Only a few additional documents will be needed from the borrower to ensure these requirements are met.

Yes, but very few lenders will allow funds from and SDIRA to ensure all tax laws are maintained.  Using SDIRA funds means that no personal guarantee can be included in the lender's loan terms and that the loan is non-recourse.  Lenders will usually limit max purchase Loan to Value (LTV) to 65% when using SDIRA funds.  Additionally, all funds for down payment and closing costs/fees MUST come from the SDIRA.  No personal funds can be mixed.  We will work closely with your SDIRA custodian to ensure we maintain the IRS requirements.

Yes. Fix and flip loans are commonly issued to LLCs or business entities used for real estate investing.  In fact, most lenders prefer an entity on title.  Most lenders are happy to lend to LLC, S-Corps, C-Corps, and even a few Trust structures such as an SDIRA Trust or Revocable Living Trust.

Fix and flip loans are short-term loans, often structured for several months to a year, depending on the project and exit plan.   Common terms are 6, 12, 18, or 24 months.

The first step is completing our loan intake form. Once submitted, we’ll review your project details and contact you directly to discuss financing options. 

Basic information about the property, purchase price, renovation budget, and exit strategy is typically enough to begin the review process.