Fix n' Flip
Fix-and-flip loans are short-term, specialized financing designed for real estate investors who purchase, renovate, and quickly resell a property for a profit. These loans are also known as hard money loans and are typically funded by private lenders or investment groups rather than traditional banks.
How fix-and-flip loans work
The process for a fix-and-flip loan is much faster and more streamlined than a conventional mortgage, allowing investors to close on deals that banks would pass on due to the property's condition.
- Approval based on property: The loan is primarily secured by the property's value, or "collateral," rather than the investor's personal credit history. The lender will evaluate the home's after-repair value (ARV)—its potential market value after renovations are complete—to determine the loan amount.
- Purchase and renovation funds: The loan typically covers both the purchase price and the renovation costs. The renovation funds are usually released in draws as the project progresses, after an inspection confirms that each phase of work is complete.
- Short loan term: These loans have a much shorter term than a traditional mortgage, typically ranging from 6 to 24 months.
- Repayment through sale: Once the renovation is finished, the investor sells the property. The proceeds from the sale are used to pay back the loan, with the remaining funds representing the investor's profit.
Click here for our terms (PDF attachment) »
Thank You,
915-920-7223
