Learn About Fix and Flip Loans

Are you interested in flipping a residential property but don't have the upfront cash to do so? Our company provides fix and flip loans specifically designed for individuals like you. In this page, we will explain what a residential fix and flip loan is, how it works, the qualifications needed to get one, and what types of properties you can purchase with it.

Residential building construction

What is a Residential Fix and Flip Loan?

A fix and flip loan are short-term loans used to purchase a property with the intent to renovate and sell it for profit. A residential fix and flip loan specifically refer to a loan used to purchase and flip a residential property. These loans are typically offered by private lenders, as traditional lending institutions tend to avoid high-risk, short-term loans.

How Does a Fix and Flip Loan Work?

The process of getting a fix and flip loan is straightforward. First, the borrower finds a property they want to buy and determines the renovation costs. They then apply for the loan with a private lender like ours. The lender will evaluate the borrower's creditworthiness and the property's potential value after renovation. Once approved, the lender will provide the funds directly to the borrower, who will use the money to purchase and renovate the property. The borrower will then sell the property for a profit and pay back the loan plus interest.

What Are the Qualifications for a Fix and Flip Loan?

Qualifications for a fix and flip loan are typically less strict than those for a traditional mortgage. However, they do vary from lender to lender. Some common qualifications include having a credit score of at least 600, a minimum down payment of 10-20%, and a demonstrated ability to complete the renovation and sell the property. The borrower will also need to provide a detailed renovation plan and demonstrate that the property has good potential to sell for a profit.

What Types of Properties Can I Purchase with a Fix and Flip Loan?

A fix and flip loan can be used for a variety of residential properties, such as single-family homes, townhouses, and condos. The condition of the property does not matter, as the loan is specifically designed to pay for renovations. However, the potential for profit is what matters most to lenders, so borrowers should keep that in mind when choosing a property to flip.