A fix and flip loan is a short-term, interest-only loan that pays for most of the purchase of an investment house and the renovation, and is paid off when you sell. For beginners, the right loan funds the rehab through draws, so your own cash goes into the down payment and closing costs instead of every contractor invoice. Most lenders size the loan off three numbers: the purchase price, the total project cost and the after-repair value (ARV).
We make these loans through our fix and flip loan program, and Requity Group also owns and operates real estate, so we look at a flip the way an operator does. Our lending platform has originated more than 100 bridge loans. First flip? That is fine. Our Balance Sheet program is built for first-time and newer flippers, with no minimum credit score. This guide covers how fix and flip loans work, the requirements, a full worked example, and the steps from offer to sale.
What is a fix and flip loan?
A fix and flip loan is a type of bridge loan for buying a house that needs work, renovating it and selling it. It differs from a regular mortgage in a few ways that matter to you:
- It is short. The term is usually 12 months, long enough to buy, renovate and sell.
- It is interest only. Your monthly payment is interest, not principal, so more of your cash stays in the project.
- It funds the renovation. The rehab budget is part of the loan and is released in stages (draws) as the work gets done.
- It is based on the deal. The property, the budget and the after-repair value carry as much weight as your income.
- It is a business-purpose loan. It is for investment property held in an LLC or corporation, not a home you will live in.
People also call these hard money loans, rehab loans or residential bridge loans. If you are comparing terms, our post on bridge loans vs hard money loans explains the differences.
How fix and flip loans work
The loan amount is the lowest of three limits. Knowing them before you make an offer tells you how much cash you need.
- Percent of purchase price. The part of the loan that buys the house. We lend up to 90% of the purchase price in our Premier program and up to 85% in our Balance Sheet program.
- Percent of total project cost. Purchase plus rehab. We lend up to 85% of total cost in both programs.
- Percent of after-repair value (ARV). What the house should sell for once the work is done, based on comparable sales. We lend up to 70% of ARV.
On top of the purchase money, we fund 100% of the rehab budget through draws. You pay for a stage of work, send a draw request with photos through the borrower portal, a third-party inspector confirms the work (usually within one to two business days) and the funds are wired within two to three business days after the inspection. You pay interest only on the money you have drawn, not on the full loan from day one.
When the house sells, the loan is paid off from the sale proceeds at closing. There is no exit fee, so you can sell as soon as the house is ready. For a deeper look at the mechanics, read how a bridge loan works.
Fix and flip loan requirements
These are the requirements for our fix and flip loans. Other lenders vary, but most ask for something close to this.
- An LLC or corporation. The loan is made to your business entity, not to you personally. If you do not have one yet, you can form it before closing.
- An investment property. Single-family homes, 2-4 unit properties, townhomes and warrantable condos. No owner-occupied homes.
- A loan size of $100,000 to $2,000,000.
- A property in a state we lend in. We lend in every state except California, Alaska and Hawaii. If you invest in Florida, see our Florida fix and flip loans page.
- Cash for your share. The difference between the loan and the purchase price, plus origination points and closing costs. The worked example below shows how to figure it.
- A scope of work and budget. A line-item list of the work and what it costs. A contractor bid is ideal, but your own estimate is a fine place to start.
- Credit and experience that match the program. See the two programs below.
Two programs: Premier and Balance Sheet
| Premier | Balance Sheet | |
|---|---|---|
| Who it fits | 3 or more flips in the last 24 months and a 650+ credit score | First-time and newer flippers |
| Minimum credit score | 650 | None |
| Rate | 10% fixed, interest only | From 12% fixed, interest only |
| Purchase price | Up to 90% | Up to 85% |
| Total project cost | Up to 85% | Up to 85% |
| After-repair value | Up to 70% | Up to 70% |
| Rehab budget | 100% through draws | 100% through draws |
| Residency | US residents | Foreign nationals considered |
Both programs have a 12-month term, 2 origination points with a $4,000 minimum, no exit fee and a 4-month minimum interest. If you are a beginner, Balance Sheet is where you start. Once you have three flips in 24 months and a 650 score, you move to Premier pricing.
Example: financing a $250,000 flip
Here is a full example so you can see how the limits, the cash and the profit fit together. It is illustrative, not a specific loan. You can run your own numbers in our fix and flip calculator, which gives the same results for these inputs.
The deal
| Item | Amount |
|---|---|
| Purchase price | $250,000 |
| Rehab budget | $60,000 |
| Total project cost | $310,000 |
| After-repair value (ARV), if comps support it | $430,000 |
| Program | Premier (10%) |
Which limit sets the loan
| Limit | Math | Maximum loan |
|---|---|---|
| 90% of purchase, plus 100% of rehab | $225,000 + $60,000 | $285,000 |
| 85% of total project cost | 85% x $310,000 | $263,500 |
| 70% of ARV | 70% x $430,000 | $301,000 |
The lowest is the cost limit, so the loan is $263,500.
How it is paid for
| Item | Amount |
|---|---|
| Loan advanced at closing (toward the purchase) | $203,500 |
| Rehab funded through draws | $60,000 |
| Your down payment ($250,000 less $203,500) | $46,500 |
| Origination points (2% of $263,500) | $5,270 |
| Your cash at closing | $51,770 plus closing costs |
If you sell in month 6
| Item | Amount |
|---|---|
| Sale price | $430,000 |
| Selling costs (6%) | ($25,800) |
| Purchase and rehab | ($310,000) |
| Origination points | ($5,270) |
| Interest at 10% on the drawn balance, draws spread evenly | ($11,675) |
| Profit before closing costs and taxes | $77,255 |
Figures are rounded to the dollar.
Things to notice
- You do not pay for the rehab out of pocket. The full $60,000 comes from draws, so the $51,770 you bring to closing is the most cash you put in, apart from closing costs and monthly interest.
- Interest follows the work. Because you pay interest only on what you have drawn, six months of interest is $11,675 instead of the roughly $13,200 it would be on the full $263,500.
- The cost limit is often the one that sets your loan. On this deal, a lower purchase price would lower both the loan and your cash at closing.
- A beginner gets the same loan here. In the Balance Sheet program, 85% of the purchase plus the rehab is $272,500, so the cost limit still sets the loan at $263,500. The difference is the rate: at 12%, interest on the same schedule is about $2,340 more.
- Selling early is not penalized. There is no exit fee. If you sell before month 4, the 4-month minimum interest applies.
The 70% rule, applied to this deal
Many flippers use the 70% rule as a quick check on an offer: pay no more than 70% of ARV, minus the rehab. For this house that is $430,000 x 70% less $60,000, or $241,000. The example pays $250,000, about $9,000 more than the rule allows.
That does not make it a bad deal. The profit is still about $76,000 before closing costs and taxes. But it leaves a smaller cushion if the rehab runs over or the house sells for less. The 70% rule is a screen, not the answer. Run the full numbers, and if a deal is close, call us before you make the offer.
What to check before you make an offer
1. The after-repair value
Pull three to five sales of similar renovated homes nearby from the last six months: same bedrooms and bathrooms, similar size, similar finishes. Your ARV should come from sales that closed, not from list prices. The appraisal will test it, so a conservative number protects you.
2. The rehab budget
Walk the house with a contractor and write the scope room by room. Add a contingency of 10% or more for what you find behind the walls. An honest budget is the biggest single protection a first-time flipper has.
3. The timeline
Count the weeks for permits, materials and each trade, then add time to list and close the sale. Every month costs interest, insurance, taxes and utilities. A 12-month term gives room, but plan to be done well inside it.
4. Your cash
Add your down payment, points, closing costs and interest for the full hold, then keep a reserve on top for overruns. In the example, that is the $51,770 at closing plus about $11,675 of interest paid monthly.
5. Your exit
Know what you will do if the house does not sell quickly. Many flippers keep a rental plan as a backup, which leads to the next section.
How to get a fix and flip loan, step by step
- Find the deal and run the numbers. Use the calculator to see your loan amount, cash to close and profit.
- Request a quote. Send us the property, purchase price, rehab budget and your ARV estimate. You get a term sheet within 24 hours, with no credit pull to get it.
- Sign the term sheet and send documents. We send a short list, such as your entity documents, the purchase contract and the scope of work.
- Close. We can close in as fast as 72 hours from a signed term sheet. Most residential bridge loans close in 72 hours to 14 business days.
- Renovate and draw. Complete a stage of work, submit a draw request with photos in the portal, and get funds wired after a quick inspection.
- Sell or refinance. The loan is paid off at the sale closing, or by a long-term refinance.
Exit options: sell or refinance
Sell. This is the plan for most flips. The title company pays off the loan from the sale proceeds, and the rest goes to you.
Refinance and rent. If rents are strong or the sale market slows, you can keep the house as a rental and refinance into a long-term DSCR loan, which qualifies on the property’s rent rather than your income. This is the BRRRR approach (buy, rehab, rent, refinance, repeat). Knowing this option exists before you buy gives you a second way out of every flip.
What to send us for a quote
- Property address and type (single-family, 2-4 units, townhome or condo)
- Purchase price and the purchase contract, if you have one
- Rehab budget or scope of work
- Your ARV estimate and the comps behind it
- Your experience: number of flips in the last 24 months, if any
- Your entity name, or a note that you are forming one
- Your timeline to close
You do not need every item to start. Send what you have, and we will tell you what else we need.
Frequently asked questions
Can I get a fix and flip loan with no experience?
Yes. Our Balance Sheet program is for first-time and newer flippers, with no minimum credit score. Plan on bringing your share of the purchase, points and closing costs, and a solid rehab budget.
Can I get a fix and flip loan with no money down?
Not with us. Every fix and flip loan we make has the borrower bring some cash: the gap between the loan and the purchase price, plus points and closing costs. The trade-off is that we fund 100% of the rehab, so your cash goes in once at closing rather than with every invoice.
What credit score do I need for a fix and flip loan?
Our Premier program needs a 650 score and three flips in the last 24 months. Our Balance Sheet program has no minimum credit score. We do not pull credit to give you a term sheet.
How much do I need to put down on a fix and flip?
It depends on which limit sets your loan. In the example above, a $250,000 purchase with a $60,000 rehab needed $46,500 down plus $5,270 in points and closing costs. The fix and flip calculator works it out for your deal.
How fast can a fix and flip loan close?
We send a term sheet within 24 hours and can close in as fast as 72 hours from a signed term sheet. Most residential deals close in 72 hours to 14 business days.
Do I need an LLC to get a fix and flip loan?
Yes. We lend to an LLC or corporation. You can form one before closing, and we will tell you which documents we need from it.
What is the 70% rule in house flipping?
It is a quick screen: pay no more than 70% of the after-repair value, minus the rehab cost. On a $430,000 ARV with a $60,000 rehab, that is $241,000. Use it to filter deals, then run the full numbers.
Ready to finance your first flip?
Send us the deal and you will have a term sheet within 24 hours, with no credit pull. See the full terms on our fix and flip loans page, or call us at 813.338.1000.
Request a fix and flip quote →
Requity Lending makes business-purpose loans secured by non-owner-occupied investment property. The example above is illustrative and is not a specific loan. Rates, terms, fees and leverage are set deal by deal and subject to underwriting and a valuation. A term sheet is not a commitment to lend.