Best Fix-and-Flip Loans

Looking to finance your next real estate flip? A fix-and-flip loan is not your average financing tool. It’s a specialized, short-term loan designed for investors looking to purchase, renovate, and quickly sell a property at a profit. 

With quick funding, lenient credit requirements, and higher loan-to-value ratios, fix-and-flip loans allow investors to quickly capitalize on time-sensitive opportunities, transform properties, and profit. A fix-and-flip loan can provide fast access if you want capital to fund repairs and upgrades. 

To help you narrow down your options, we’ve researched which lenders offer the best fix and flip loans. Read on to explore our top picks. Plus, compare benefits and risks and determine which alternatives to consider if a fix-and-flip loan isn’t for you.

Best fix-and-flip loans

Choosing the right loan is crucial for investors in the fix-and-flip real estate market. 

We’ve selected five lenders that excel in this area, evaluating them based on criteria such as interest rates, loan terms, speed of funding, and flexibility regarding property conditions. Each lender has unique features and terms that cater to different needs.

Lender	Best for
New Silver	Fast funding
Bluevine	Flexibility
Kapitus	Personalized service
OnDeck	Transparent terms
Funding Circle	Experienced investors

New Silver: Best for fast funding

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• Specializes in loans for real estate investors
• Quick approval and funding process
• Competitive rates for fix-and-flip projects

New Silver is a standout choice for real estate investors focusing on fix-and-flip projects. Known for its rapid approval and funding process, New Silver offers competitive rates and terms tailored to the needs of property investors. 

This lender is particularly beneficial for those seeking quick access to funds to capitalize on time-sensitive opportunities.

New Silver’s approach to lending is characterized by its understanding of the real estate market, providing flexible solutions for investors. Its loans are designed to support various renovation projects, making it a versatile choice for various fix-and-flip scenarios.

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Bluevine: Best for flexibility

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• Offers lines of credit for ongoing projects
• Flexible funding options with quick access to capital
• User-friendly online application process

Bluevine provides an innovative approach to financing fix-and-flip projects through its lines of credit. This flexibility is ideal for investors with ongoing or multiple projects requiring continuous funding access. 

The lender’s quick and efficient online application process allows for swift decision-making, essential in the fast-paced real estate market.

Bluevine’s emphasis on flexibility and convenience makes it a strong option for investors who need a reliable funding source. Its lines of credit offer the agility needed to effectively manage various stages of fix-and-flip projects.

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Kapitus: Best for personalized service

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• Tailored loan products for small to mid-sized businesses
• Competitive rates for short-term loans
• Personalized customer service

Kapitus caters to small and mid-sized businesses, including those in the real estate sector. Its loan products are designed to meet the unique needs of fix-and-flip projects, offering competitive rates for short-term loans. 

It stands out for its personalized customer service, ensuring borrowers have the support they need throughout the loan process.

Kapitus’s approach is suitable for investors who value a lender that understands the intricacies of small business operations. Its focus on tailored solutions provides the necessary financial backing for successful fix-and-flip ventures.

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OnDeck: Best for transparent terms

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• Quick funding, often within 24 hours
• Short-term loans with transparent terms
• Suitable for a range of business financing needs

OnDeck is renowned for its speed, offering quick funding that can be crucial for fix-and-flip investors. 

Its short-term loans come with transparent terms, making them a straightforward option for those who need funding without lengthy wait times. OnDeck’s loans are designed to cater to various business financing needs, including real estate investments.

OnDeck’s emphasis on speed and clarity makes it an excellent choice for investors who need prompt financial support for their fix-and-flip projects. Its efficient process helps to minimize delays, allowing investors to move quickly on property opportunities.

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Funding Circle: Best for experienced investors

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• Tailored loans for established businesses
• Competitive rates and flexible terms
• Focus on long-term financing solutions

Funding Circle offers tailored loan solutions for more established businesses, including those involved in fix-and-flip projects. Its competitive rates and flexible terms make it a viable option for investors seeking long-term financing solutions. 

The lender focuses on building lasting relationships with its borrowers, providing support and guidance throughout the loan process.

Funding Circle’s approach is particularly suitable for investors with established track records who require substantial financial backing for larger or more complex fix-and-flip projects. Its commitment to long-term financing solutions aligns with the needs of seasoned real estate investors.

If you’re new to fix-and-flip projects, Funding Circle may not be the best choice for you. In that case, check out our recommendations for the best fix-and-flip loans for beginners.

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Benefits of fix-and-flip loans

Fix-and-flip loans offer distinct advantages, especially compared to traditional real estate loans. Here’s a summary of their benefits:

• Quick funding. Unlike traditional loans that can take weeks or even months for approval, fix-and-flip loans often have a faster approval process. Most lenders aim to fund loans within 10 days so you can start projects quickly.
• High loan-to-value ratios. Fix-and-flip loans often offer higher loan-to-value (LTV) ratios than traditional loans. This means they cover more of the purchase and renovation costs, so you need less upfront capital as an investor.
• Focus on profit potential. While traditional real estate loans rely heavily on your credit history and income, fix-and-flip loans prioritize the property’s potential profitability. This makes them accessible to investors with lower credit scores. 
• Flexible property types. These loans can be used for many properties, including single-family homes, multi-units, and commercial properties.
• Perfect for flipping. Fix-and-flip loans have shorter repayment periods that align well with the business model of flipping properties. This is unlike traditional mortgages that are geared towards long-term property ownership.

Risks of fix-and-flip loans

Although fix-and-flip loans can get you the financing you need for your next rehab project, they come with their own set of risks to consider:

• Market risks. The real estate market fluctuates, so market downturns can lower the sale price or make it harder to sell flipped properties. If property values decline, you could lose money, especially if the market changes between buying and selling.
• Renovation cost overruns. Budgeting for renovations is tricky, and unexpected costs often pop up. Going over renovation budgets can drastically cut doesn’t cover the extra costs.
• Short payback periods. Fix-and-flip loans are designed to be repaid quickly once the renovated property is sold, usually within a year or two. These short repayment timelines can strain finances if flips hit snags.
• Risk of inaccurate property valuations. Overestimating the after-repair value (ARV) can get you a loan larger than the property’s actual worth. In turn, this can make it hard to sell at a profit.

Carefully consider the pros and cons of choosing a fix and flip loan and focus on the cons to ensure you have the risk tolerance and financial cushion to absorb the setbacks.

Erin Kinkade

CFP®

How to get a fix-and-flip loan

You’ll need a few key pieces of information to get a fix-and-flip loan:

• The property address
• Purchase price
• Scope of work
• Estimated resale value

Lenders will review the property through an appraisal and evaluate your renovation plan. They’ll also assess your experience flipping properties either through past projects or your business plan. This part will also determine what size of down payment you need. 

Many lenders will run a credit check, but it’s not the primary approval factor. They focus more on your past flipping experience and the projected profitability of the flip based on the purchase price and ARV value. 

Fix-and-flip loans usually have faster processing times than traditional loans. Many lenders aim to close within 10 days of approval so you can stay competitive with other buyers. 

Follow these steps to apply for a fix-and-flip loan: 

1. Choose a lender that specializes in fix-and-flip loans. 
2. Fill out a loan application and submit all required financial documentation. 
3. Wait for the lender to complete your appraisal and property inspection if required.
4. Sign your loan agreement, which outlines your loan’s interest rate, loan amount, fees, and repayment schedule. 
5. Wait for the lender to fund the loan into your account.
6. Start making renovations!

Read More

Fix-and-Flip Loans for Bad Credit

Alternatives to fix-and-flip loans

If you want to avoid fix-and-flip loans, you have a few alternative financing options to consider. Each option has different qualification requirements, rates, terms, borrowing limits and costs. Assess your financing needs to determine which one is right for your next real estate deal.

• Home equity loans. Home equity loans allow you to borrow against the equity in your primary residence or rental properties. The loan is disbursed as a lump sum with fixed monthly payments over a set repayment term.
• HELOCs. Home equity lines of credit (HELOCs) also tap home equity but work more like a credit card with an open line of credit and variable interest rate. You can draw as needed up to your limit.
• Cash-out refinancing. With cash-out refinancing, you replace your current mortgage with a new higher balance loan to access your home’s equity. You could use the extra money you receive to fund your flip.
• Hard money loans. A hard money loan is a type of investment property loan most commonly offered by private lenders and brokers. They’re asset-based loans with higher rates and short terms. Usually, approval depends more so on the property rather than your credit.

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Bridge Loans for Fix-and-Flip Properties

FAQ

What qualifies as a fix-and-flip project for these types of loans?

A “fix-and-flip project” typically refers to a real estate investment strategy where one purchases a property at a lower cost, renovates or “fixes” it, and then sells or “flips” it for a profit. 

The properties can be single-family homes, multifamily properties, or commercial real estate. These projects are often short-term in nature and intended to be completed within a year.

How do lenders determine the loan amount for a fix-and-flip loan?

Lenders examine several factors when determining the loan amount for a fix-and-flip project, including the ARV, which is the estimated property value after renovations. 

Other elements considered can involve the purchase price, the scope and cost of the renovation plan, and the borrower’s financial standing and experience with similar projects.

Is a fix-and-flip loan the same as a hard-money loan?

A hard-money loan is a type of financing often used for fix-and-flip projects, but it is not the same. Both loans share a common purpose—to finance property renovations—but hard-money loans often come from private investors or companies rather than traditional lenders. 

Hard-money loans tend to have shorter terms, and approval is based more on the property’s value than the borrower’s creditworthiness.

How fast can I get funding once approved for a fix-and-flip loan?

Once you’re approved for a fix-and-flip loan, the time to receive funding can vary. Most lenders aim to provide funds within a week or two, but factors such as the property’s condition and legal complexities can affect the timeline.

Do I need previous real estate investment experience to qualify for a fix-and-flip loan?

Past experience in real estate investment can improve your chances of securing a fix-and-flip loan, but it isn’t always mandatory. Some lenders may still consider borrowers with a clear, well-outlined plan and sufficient funds for a down payment.

Can I qualify for a fix-and-flip loan with a low credit score?

Getting a fix-and-flip loan with a low credit score is possible. Many fix-and-flip lenders focus more on the project’s potential profitability and the property’s value than the borrower’s credit score. However, a lower credit score might result in higher interest rates and stricter loan terms.