If you’ve ever wanted to profit from buying, renovating, and reselling real estate, you’ve likely heard of fix and flip loans. These short-term financing tools are specifically designed for investors who want to acquire distressed or undervalued properties, rehab them, and sell for a profit—all without using traditional bank loans.
Whether you’re flipping your first home or funding your tenth project, this guide will walk you through exactly how fix and flip loans work, who they’re for, and how to use them to fuel a successful value-add investment strategy.
What Is a Fix and Flip Loan?
A fix and flip loan is a short-term, interest-only loan used to finance the purchase and renovation of a property with the intent to sell it quickly for profit.
These loans are typically issued by private lenders or hard money lenders and are based on the after-repair value (ARV) of the property—not just the current condition.
What Fix and Flip Loans Typically Cover
- Property purchase price
- Renovation and construction costs
- Closing and holding costs
- Interest-only payments during the project term
Some lenders will fund up to 90% of the purchase price and 100% of the rehab budget, depending on your experience and the property’s ARV.
