Fix and Flip Loans: How to Fund Your Next Renovation

A great flip lives or dies on two things: buying right and closing fast. A 30-year mortgage helps with neither. Fix and flip loans are a completely different animal — short-term, project-based financing designed to get you in, funded through the renovation, and back out at a profit. If you’re moving from “I’d like to flip a house” to actually doing it, this is the financing that makes it work.

A traditional mortgage is built for someone who’ll live in and pay off a home over decades. A fix and flip loan assumes the opposite: you’ll own the property for months, not years, and you’ll pay it off in a lump sum when you sell or refinance. Everything about the structure — the term, the payments, the way it’s sized — reflects that short, fast lifecycle.

Fix and flip lenders don’t just look at what a property is worth today — they look at what it will be worth after your renovation, the After-Repair Value. Loans are commonly sized as a percentage of ARV, which lets you borrow against the value you’re about to create, not just the beat-up shell you’re buying. Many programs also finance a large portion of the renovation budget, released in draws as the work gets done.

• Short term — frequently 12 to 18 months.
• Interest-only payments to preserve cash during the project.
• Higher rates and points than a long-term mortgage — the cost of speed and flexibility.
• Fast closings, since deals move quickly and lenders in this space are built for it.

Because these are asset-based loans, the focus is on the project’s numbers and your experience more than your tax returns. Lenders weigh the purchase price, the renovation scope and budget, the ARV supported by comps, and your track record. Strong deals with a realistic budget and a clear exit get funded — often in an LLC.

The best flippers know their exit before they buy. Will you sell at completion, or refinance into a DSCR loan and keep it as a rental (the “BRRRR” strategy)? Both are valid, but they change how you should structure the initial loan. Deciding early keeps you from scrambling when the renovation wraps.

If you’ve got a project lined up — or you’re hunting for your first — let’s talk through the numbers and get you positioned to move fast when the right deal appears.