Fix and flip loans are short-term, business-purpose loans used to acquire, renovate, and reposition residential investment properties.
Unlike consumer mortgages designed for owner-occupied homes, fix and flip loans are structured around an investment project. The lender may evaluate the property’s purchase price, renovation scope, projected after-repair value, borrower experience, credit, liquidity, and proposed exit strategy.
The right financing structure depends on whether an investor is completing one renovation, managing multiple projects, acquiring a transitional rental, or planning to hold the finished property over the long term.
A fix and flip loan can help finance:
These loans are generally secured by the property and have shorter terms than permanent rental financing. The investor’s primary exit strategy is usually to:
Neither exit is guaranteed. Market conditions, construction delays, property value, rental income, financing costs, and lender requirements can affect the outcome.
A fix and flip loan may be appropriate when:
A fix and flip loan may be less appropriate when:
The investor evaluates the acquisition price, property condition, local market, comparable sales, renovation scope, and expected exit value.
Documentation may include:
Requirements vary by lender and transaction.
The lender may review:
Fix and flip loans are often described as asset-based, but that does not mean the borrower’s financial strength is irrelevant. Property value is only one part of the underwriting decision.
The lender funds the approved portion of the acquisition or refinance. The borrower contributes the required equity, closing costs, reserves, and any other amounts not covered by the loan.
Renovation proceeds are commonly held back and released after eligible work has been completed, documented, inspected, and approved.
This means the investor may need sufficient working capital to pay contractors and suppliers before receiving reimbursement. Draw timing and documentation requirements should be understood before closing.
After renovation, the investor may:
Extensions and refinancing are never automatic.
Loan-to-cost, or LTC, compares the loan amount with the project’s total cost:
Loan amount ÷ total project cost = LTC
Total project cost may include the purchase price and lender-approved renovation expenses. Treatment of other costs varies by lender.
Loan-to-value, or LTV, compares the loan amount with the property’s current or appraised value:
Loan amount ÷ property value = LTV
After-repair value, or ARV, is the estimated market value of the property after the planned renovations are completed.
ARV should be supported by relevant comparable sales and a realistic renovation scope. It is an estimate—not a guaranteed sale price.
These measurements may be more relevant when the exit involves holding the property as a rental. A lender evaluating permanent financing will consider the property’s qualifying income and ability to support the proposed debt.
Assume the following hypothetical project:
The LTC limit would be:
$575,000 × 90% = $517,500
The ARV-based limit would be:
$700,000 × 75% = $525,000
Because the LTC calculation produces the lower amount, the hypothetical maximum loan would be $517,500 before applying any additional lender limits.
The investor would need to contribute at least $57,500 toward total project cost, plus applicable closing costs, prepaid expenses, reserves, and working capital for renovation draws.
This is an illustration only and is not a CoreVest loan quote. Actual proceeds depend on the complete underwriting analysis and all applicable loan limits.
The interest rate is only one component of the cost.
Investors should account for:
Holding costs should be modeled for a longer period than the ideal project schedule.
A draw is a release of approved renovation funds after a defined portion of the project has been completed.
A typical process includes:
Required documentation may include:
Investors should ask whether draws are advanced or reimbursed, how frequently they can be requested, what fees apply, and how long approved funding typically takes.
A direct lender provides the loan rather than acting solely as an intermediary. Direct lenders may offer greater certainty around credit decisions, loan structure, closing, servicing, and construction draws.
“Hard money” generally describes short-term, real estate-secured financing. The term does not identify one standardized loan product.
Rates, leverage, documentation, borrower requirements, and servicing quality vary widely. Hard money lenders may still evaluate credit, liquidity, experience, and repayment capacity.
Some banks and credit unions provide renovation or construction financing. These programs may offer competitive pricing but can involve different underwriting, deposit-relationship, property-condition, experience, or timeline requirements.
Brokers and lending platforms may provide access to several lenders. Investors should confirm which entity controls underwriting, funds the loan, services construction draws, and makes decisions if the project changes.
A one-time loan may be sufficient for an investor completing a single project. Investors repeatedly acquiring and renovating properties may benefit from a revolving credit facility.
A real estate line of credit can provide access to pre-approved capital for eligible acquisitions and renovations. The investor can generally add and repay assets under the facility, subject to its borrowing, collateral, and underwriting requirements.
This structure may reduce the need to establish an entirely new lending relationship for every transaction, although each property still requires review and approval.
A sale is the traditional fix and flip exit. Investors should account for:
If the property can operate successfully as a rental, the investor may pursue long-term financing after renovation and stabilization.
The refinance will depend on:
The new loan amount may not be sufficient to repay the entire short-term loan or return all invested capital.
When a project or sale is delayed, the investor may request an extension or replacement bridge loan. Availability, pricing, and approval depend on the loan agreement, project performance, property value, and lender.
An extension should be treated as a contingency—not the original business plan.
CoreVest’s Fix and Flip Loan is designed for eligible residential acquisition and rehabilitation projects.
Current features include:
Eligible renovation costs are reimbursed after work is completed, inspected, and approved. Approved draws are typically funded within two to five business days.
Learn more about CoreVest Fix and Flip Loans.
CoreVest’s Line of Credit is designed for experienced investors acquiring, refinancing, renovating, or aggregating multiple properties.
Current features include:
The initial credit line generally requires a more extensive underwriting process. Once the facility is active, individual assets may be added more efficiently, subject to approval.
Learn more about CoreVest’s Line of Credit.
CoreVest’s Single-Asset Bridge Loan may fit eligible acquisitions or refinances that do not require a traditional DSCR qualification.
Current features include:
This program is not a substitute for a renovation loan when substantial construction funding is required.
Learn more about CoreVest’s Single-Asset Bridge Loan.
For an investor planning to hold a completed property as a rental, a CoreVest DSCR Loan may provide long-term financing after the property is eligible and stabilized.
The program evaluates qualification primarily using property rental income rather than traditional personal-income documentation. CoreVest also considers credit, liquidity, value, reserves, and other underwriting factors.
Learn more about CoreVest’s Single-Asset DSCR Loan.
Using cash eliminates loan interest but concentrates more of the investor’s capital in one project.
Partners may contribute capital, experience, or operational resources in exchange for ownership, control, income, or profit participation. The parties should document decision-making authority, contributions, distributions, losses, and exit rights.
Private financing should be documented carefully. Interest, repayment, collateral, securities, tax, and relationship considerations may apply.
Real estate crowdfunding may involve debt or equity securities and can trigger federal or state securities requirements. Investors and sponsors should obtain appropriate legal guidance.
Borrowing against a primary residence can expose the residence to investment-related loss. The financing terms, tax treatment, and consequences of default should be evaluated carefully.
Possibly. Experience is one underwriting factor, but requirements vary. A lender may also evaluate credit, liquidity, contractor experience, property condition, leverage, and the business plan.
Possibly, but approval should never be assumed. Property value alone does not replace credit and financial underwriting.
Some lenders may finance eligible auction acquisitions, but deposit requirements, limited inspections, title risk, and short closing deadlines can create challenges. Confirm financing before bidding.
Often not. Many lenders hold renovation proceeds and reimburse eligible costs after completed work has been inspected and approved.
It depends on the loan program. Investors should not assume that interest, taxes, insurance, utilities, or other holding expenses are financed.
Terms vary. Some loans impose prepayment penalties or minimum-interest requirements, while others do not. CoreVest’s current Fix and Flip program does not impose a prepayment penalty or minimum-interest requirement.
Terms vary by lender and project. CoreVest currently offers Fix and Flip terms ranging from six to 24 months, with extension options subject to applicable requirements.
Potentially. The completed property must meet the long-term lender’s eligibility, valuation, rental-income, DSCR, seasoning, and underwriting requirements.
No. Profit depends on acquisition price, renovation cost, financing expenses, holding period, property value, market demand, and selling costs.
Fix and flip loans can provide acquisition and renovation capital for eligible residential investment projects, but the loan must support a realistic budget, timeline, and exit strategy.
Investors should compare complete loan structures, understand the renovation draw process, maintain adequate liquidity, and prepare for the possibility that construction or disposition takes longer than expected.
CoreVest offers multiple financing options that can support investors as their strategies evolve—from a single renovation project to a revolving acquisition line and, when appropriate, long-term rental financing.
Disclaimer: This article is provided for informational purposes only and does not constitute investment, legal, tax, construction, or financial advice. Loan programs, terms, leverage, pricing, draw timing, and availability are subject to change and may vary by borrower, property, transaction, and jurisdiction. This is not a commitment to lend. All loans are subject to underwriting, credit approval, and applicable program requirements. Consult qualified professionals before making investment, financing, legal, tax, or construction decisions.
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