What are Fix & Flip Loans?

There are specialized loans that are short-term loans specifically intended to cover the purchase and renovation of a property that will be resold on the market shortly after repairs are complete. Private investors are the primary sources for these short-term loans.

House-flipping loan programs don’t rely on verified income or other standard loan factors, so they are more available to people entering the house-flipping market. Instead, lenders evaluate the property, the likelihood of a successful renovation, and the comparative advantages of properties in the surrounding neighborhood.

House-flip loans are designed to be exactly what house flippers need to arrange profitable deals and move quickly in favorable real estate situations. Some of the advantages of applying for house-flip loans over other short-term business loans include the following:

Comprehensiveness: House-flipping loans encompass the purchase price of the investment property and enough credit for anticipated repairs and related expenses. This is a far more streamlined arrangement than having to take out separate loans for the purchase of the property and for improvement projects.

Speediness: The loan process can be completed in under a week, especially if borrowers have all the documentation ready and know what they need to close on the property. This helps house flippers quickly entice sellers with an offer and start remodeling projects quickly instead of having to wait through lengthy approval periods and face competition from traditional buyers. Cash flow: Real estate investors who are flipping multiple properties over the course of a year or who manage several different types of real estate investing rely on ample cash flow to make repairs, pay property management companies, and more. Even house flippers with potential access to their own funds to make a cash offer on a house or pay for improvements themselves need that cash to remain liquid for other projects. A house-flipping loan allows established or profitable house-flipping entities to acquire new properties without tying down their own assets.