You found a distressed property with real upside. The numbers work. There's just one problem: you don't have $300,000 in cash sitting around, and a 30-day bank mortgage won't beat the three other offers on the table.
This is exactly why fix and flip loans exist. We built ours for investors who move fast, buy properties banks won't touch, and need capital that matches the pace of real estate, not the pace of a loan committee.
If you're about to do your first flip, this guide walks you through exactly how the financing works, what you'll need to qualify, what a real deal looks like on paper, and how to pick a lender who won't slow you down.
A fix and flip loan is a short-term loan you use to buy a distressed property, renovate it, and sell it for a profit, usually within 12 to 18 months. You're not living in the property, and you're not holding it long-term. You're in and out, and the loan is structured around that timeline.
Here's what makes it different from a regular mortgage:
For most investors, this type of financing falls under the broader hard money umbrella. "Hard money" simply means the loan is secured by the property itself, not your personal creditworthiness. So when you hear someone talk about hard money fix and flip loans, they're describing the same asset-based, fast-closing structure we use every day.
In a competitive market, the property you want probably has three or four other offers on it. A seller comparing a 45-day conventional close against a 10-day close will often take the faster, more certain deal, even at a slightly lower price. Speed isn't just convenience here. It's leverage in the negotiation itself, and it's one of the biggest reasons investors move away from banks entirely once they've done a deal or two.
Understanding the mechanics up front will save you a lot of confusion once you're under contract. Here's the process you can expect when you work with us:
You find a deal and run the numbers. Purchase price, estimated rehab budget, and projected ARV all matter here. Most experienced flippers use the 70% rule as a starting point: don't pay more than 70% of ARV minus repair costs.
You submit your application and property details. Because our loans are asset-based, you'll spend far less time gathering income documentation than you would for a conventional loan.
We evaluate the deal, not just you. Our team looks at the property's current condition, your renovation scope, and the ARV to decide how much we can fund.
You get an approval and terms. This includes your loan amount, how much of your total project cost is covered, your interest rate, and your term length.
You close and get funded. Purchase funds typically disburse at closing, and rehab funds are released in draws as work is completed and verified.
You renovate, sell (or refinance), and pay off the loan. Once the property sells, the loan is paid off from proceeds, and you keep the profit
A few line items to watch closely when you're comparing offers:
Every deal is priced individually, but a few factors move the needle more than others:
None of this means you need a finance degree to get started. It just means two deals with the same purchase price can come back with different terms, and understanding why helps you negotiate and plan your budget with more confidence.
You don't need a perfect financial history to get approved with us. Most hard money fix and flip loans share similar underwriting DNA, and because our financing is collateral-based, we care most about the deal itself. That said, here's what typically factors into your approval:
Here's the part that surprises a lot of first-timers: you don't need years of flipping experience to qualify. We evaluate your deal quality and your plan, not your resume. A well-researched property with a realistic budget can get funded even on your very first flip.
This type of financing typically covers single-family homes, condos, townhomes, and small multifamily properties up to four units. Distressed, foreclosure, and off-market properties are all common candidates, since these are usually the deals with the most room between purchase price and ARV. If you're eyeing a property outside these categories, it's worth asking your lender directly before you write an offer.
A pre-approval tells you your realistic budget, your likely leverage, and roughly what your terms will look like before you ever put in an offer. In a market where sellers favor certainty, walking into negotiations with pre-approval in hand strengthens your offer and gives sellers greater confidence. It costs you nothing to get one, and it saves you from wasting time chasing deals that were never going to pencil out.
Not all lenders are built the same, and the wrong choice can cost you a deal. Here's what separates a strong fix and flip lender from one that'll slow you down:
If you're comparing multiple offers, it's worth talking to a few private lenders for fix and flip financing rather than accepting the first term sheet you receive. Rates, leverage, and draw processes vary more than most first-time investors expect, and those differences directly affect your bottom line on every deal.
That's the gap we built InstaLend to close: up to 95% of total project cost, no income verification, and a close time that keeps pace with the deal, not the other way around.
If you're scaling past your first flip or two, the lender relationship starts to matter as much as any single loan's terms. Consistent draw turnaround, a responsive underwriting team, and a lender who understands your local market can shave real days off every project going forward, which compounds fast if you're running multiple flips at once.
A little vocabulary goes a long way when you're talking to a lender for the first time. Here are the terms you'll run into most often:
Knowing these terms before your first call with a lender makes the conversation faster and helps you compare offers apples-to-apples instead of getting lost in unfamiliar language.
Do I need real estate investing experience to get approved? No. Our approval is based on the deal and your renovation plan, not your track record. We fund first-time investors regularly when the numbers make sense, and many private lenders for fix and flip deals are set up specifically to work with newer investors.
How fast can I actually close? We typically close in 10 to 14 business days, compared to 30 to 60 days for a conventional mortgage. That speed is often the difference between winning and losing a competitive deal.
Will rehab costs be covered too, or just the purchase? It depends on the lender. We finance both purchase and rehab in a single loan, up to 95% of your total project cost.
What's the difference between this and a traditional mortgage? Traditional mortgages are income-based and take weeks longer to close. Our financing is asset-based, evaluated on the property and the deal, and built for short hold periods instead of 30-year terms.
How do I estimate ARV accurately? Pull recent comparable sales of renovated properties within a half-mile to a mile of your target, adjusted for square footage, condition, and finishes. A local appraiser or experienced agent can sanity-check your number before you submit your application to us.
What happens if my renovation takes longer than expected? Talk to your lender as early as possible. Many offer extension options for a fee rather than forcing a default, but terms vary, so ask about this before you close, not after you're behind schedule.
Can I use this financing for a rental property instead of a flip? This type of financing is built for short-term projects ending in a sale or refinance. If your plan is to hold and rent, a long-term rental loan is typically the better fit once renovations are complete.
Your first flip doesn't need to start with months of saving cash or navigating a 45-day bank mortgage. When you work with us, you can move on distressed properties as fast as cash buyers do, fund your renovation alongside your purchase, and keep more of your own capital on the sidelines for the next deal.
Run your numbers, know your ARV, and line up financing before you're under contract, not after. Get pre-approved with us today and see what you qualify for before your next offer goes in.