If you’ve ever watched a great deal slip through your fingers because your bank wanted 60 days to underwrite a fix and flip, this guide is for you. Fix and flip loans are short-term, asset-based loans designed for real estate investors who buy distressed properties, renovate them, and resell for profit. Unlike traditional mortgages, they’re built for speed, leverage, and the realities of how flippers actually work.
What Is a Fix & Flip Loan?
A fix and flip loan is a short-term real estate loan — typically 6 to 18 months — that finances both the purchase and rehab of an investment property. Lenders qualify the deal more than the borrower: they look at the property’s after-repair value (ARV), the rehab budget, and the investor’s track record. Most fix and flip loans are interest-only with a balloon payment at the end, which keeps monthly carrying costs low while you renovate and resell.
Because these loans are private (sometimes called “hard money”), the underwriting is dramatically faster than a conventional bank. Approvals often happen in 24 to 48 hours, and closings can wrap in 7 to 14 days — fast enough to compete with cash buyers in hot markets.
Who Qualifies for a Fix & Flip Loan?
Fix and flip lenders care about the deal first, the borrower second. Common requirements:
- Credit score of 620 or higher (some programs go as low as 600)
- Some liquid reserves to cover carrying costs and overruns
- Either prior flip experience or a strong project plan with realistic numbers
- A deal that pencils — meaning the ARV minus rehab and acquisition leaves real margin
First-time flippers can absolutely qualify. The key is bringing a clean scope of work, accurate ARV comps, and a contractor bid that holds up to scrutiny. Lenders fund deals, not dreams — show them the math.
How Much Can You Borrow?
Most fix and flip programs offer two leverage levers:
- Loan-to-Cost (LTC): up to 90% of purchase price plus 100% of rehab budget
- Loan-to-ARV: typically capped at 70-75% of after-repair value
Whichever is lower controls the deal. On a $200K purchase with $50K in rehab and a $325K ARV, a 90% LTC / 70% ARV program would likely fund $180K toward purchase and the full $50K rehab — meaning you’d bring roughly $20K plus closing costs to the table. Loan amounts at 24HourLoanApproval.com run from $50K all the way up to $5M+ on a single property.
Pros and Cons of Fix & Flip Financing
Pros:
- Speed — close in 7-14 days vs. 45-60 days for a conventional loan
- High leverage — finance 90%+ of total project costs
- Asset-based underwriting — no W-2s or tax returns required on most programs
- Rehab funds escrowed and released in draws as work completes
Cons:
- Higher interest rates than conventional mortgages
- Origination points (usually 1-3%) at closing
- Short term — you need a clear exit plan (sell or refinance) within 12-18 months
Common Mistakes That Kill Fix & Flip Deals
Even seasoned flippers get tripped up by avoidable mistakes. The five we see most often:
- Optimistic ARVs — using comps that aren’t truly comparable. Lenders pull their own appraisals, and a soft ARV is the fastest way to a re-trade.
- Underestimating rehab — every project has surprises. Build in a 10-15% contingency or you’ll bleed cash mid-project.
- Ignoring carrying costs — interest, taxes, insurance, and utilities while the property is vacant. On a 6-month flip, this is real money.
- No exit plan B — what happens if the resale market softens? Smart investors model both a sale and a refinance-to-rental exit.
- Choosing the cheapest lender instead of the right one — a slightly lower rate is meaningless if the lender misses your closing date.
Real Numbers from a Recent Fix & Flip
To make this concrete, here’s a deal funded recently through our network: a $1.2M fix and flip in Atlanta. Purchase price $850K, rehab $200K, projected ARV $1.45M. The investor came in with $90K cash plus closing costs; the lender funded $760K toward purchase and the full $200K rehab in scheduled draws. Closed in 9 days from clean application. That speed is the entire point — a 30-day bank close would have lost the deal to a cash buyer.
How to Get Started
Before you call a lender, pull together: the address, purchase price, rehab budget, expected ARV with three comparable sales, and a basic timeline. The cleaner your package, the faster the term sheet. At 24 Hour Loan Approval, Jeff personally reviews every fix and flip submission and routes it to the lender most likely to fund the deal — based on property type, state, leverage, and timeline. No call centers, no junior analysts.
Ready to Get Funded?
Jeff LaVigne and the 24 Hour Loan Approval team have built a network of 15+ direct lenders who fund deals other brokers walk away from. Submit your scenario and get a real answer — fast.
- Phone: 678-770-5046
- Email: jeff@upto100million.com
- Apply online: 24HourLoanApproval.com
