Investor guide
Fix and flip loan requirements, and how lenders size a flip.
A flip loan funds the purchase and the rehab, but the amount depends on two tests, your experience, and a draw schedule. Here is how it works and what you need to bring.
Two tests, and you get the lower one
Lenders size a fix-and-flip loan two ways. The first is loan-to-cost: up to 90% of the purchase price plus the rehab budget, for experienced investors. The second is loan-to-ARV: usually 70%, up to 75%, of the after-repair value. The loan is whichever number comes out lower.
That second test is why a realistic ARV matters so much. If the comparable sales don't support your number, the ARV test shrinks the loan and you bring more cash.
Have a flip under contract? We will run both tests.
Apply NowExperience
Lenders generally treat five or six completed projects as experienced. Experience buys better leverage and pricing. Newer investors can still get funded, usually with more cash in the deal. Bring a list of the flips you have completed and the properties you own.
Newer to flipping? You can still qualify with more cash in.
Apply NowCredit
Minimums start around 660. Some lenders go lower for the right deal and borrower.
See where your credit fits. No credit pull to start.
Apply NowHow the rehab money works
The renovation budget is not handed over at closing. It is held back and released in draws. When you finish a phase, you request a draw, an inspector confirms the work, and the funds are typically released within three to five days.
Fewer, cleaner draws go faster. Plan them around finished phases (demo and rough-ins, then mechanicals, then finishes) rather than individual line items, and keep enough cash on hand to fund each phase before it is reimbursed.
Rehab funded in draws as the work gets done. Start your flip loan.
Apply NowCash to close
Lenders verify cash for the gap between the loan and your total cost, plus closing costs and reserves. Two months of bank statements is the usual ask.
Find out the cash you will need to close on your deal.
Apply NowTerm and timeline
Terms run 6, 12, or 18 months, matched to the project. Our target is 15 days from a complete file to closing, and the biggest variable is how quickly the contract, scope of work, and bank statements come in.
Buying a wholesale deal? Bring the full contract chain, including the original contract and the assignment, so the lender can see the real purchase price.
Aiming for a 15-day close? Send us the deal.
Apply NowA worked example
Purchase $200,000, rehab $50,000, total cost $250,000, ARV $350,000.
Cost test: 90% of $250,000 = $225,000. ARV test: 70% of $350,000 = $245,000. The loan is the lower number, $225,000, and you bring the other $25,000 plus closing costs.
Now say the comps only support a $300,000 ARV. The ARV test drops to $210,000, which is now the lower number. You bring $40,000 plus closing costs instead.
Illustrative example only. Real terms depend on the lender, the property, and the borrower, and are not a commitment to lend.
Documents to have ready
- Fully executed purchase contract with all addenda, including any assignment
- Itemized scope of work with costs
- Contact for the person who will give the appraiser access
- Title company and insurance agent contacts
- Two months of bank statements
- Photo ID and entity documents with EIN
- Schedule of properties you own and flips you've completed
Questions
Common questions.
How much will a fix and flip lender fund?
Can I get a fix and flip loan with no experience?
When do I get the rehab money?
How fast can a flip loan close?
Ready to fund your next flip?
Apply NowKeep reading
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