Contractors have an edge on a flip: they can price the work, run the crew and spot problems before closing. Lenders see that edge, but they also look hard at how you pay yourself and how draws work when you are the one swinging the hammer.
In short: Yes, contractors and builders can finance their own flips, and construction experience often helps on leverage and pricing. LendingStreet finances up to 90% of the purchase price and up to 100% of the rehab budget, with rehab funds paid in draws after work is completed and inspected. Self-performing the work is allowed on many programs, but the budget has to show real costs, and you need cash to float labor and materials between draws. Rates start at 9.99% for qualified borrowers, and terms typically run 12 to 18 months.
Flip lenders care about two kinds of track record: buying and selling investment property, and completing renovations on budget. A licensed contractor or builder usually brings the second one in depth, even with few or no flips under their own name.
Some programs give real credit for completed construction jobs when setting leverage. Others count only properties you owned and sold. That difference can move your terms, so it is worth showing both sides of your history up front.
When an outside general contractor runs the job, the lender reviews that contractor's bid. When you are the contractor, the lender reviews your budget, and it needs to read like a real bid: line items, quantities and costs, not a lump sum.
Many programs will fund your materials, subcontractor invoices and a reasonable labor cost. Treatment of contractor profit or overhead on your own project varies by program. Some allow it within limits, and some expect your return to come from the sale, not from the draw. Ask before you build the budget so the numbers match the program.
Rehab money is held back at closing and released in draws after work is completed and inspected. You finish a phase, request a draw, an inspector confirms the work, and funds are released for that completed work.
That means you front the cost of each phase. A contractor with an established supplier account and crew has an advantage here, but you still need working cash. A common mistake is planning on the draw to pay for the work it is reimbursing.
| Draw stage (sample) | Work completed before request | Typical support |
|---|---|---|
| Draw 1 | Demo, rough framing changes | Photos, inspector visit |
| Draw 2 | Rough plumbing, electrical, HVAC | Permit sign-offs where required |
| Draw 3 | Drywall, windows, roof | Inspector visit, invoices |
| Draw 4 | Kitchen, baths, flooring, paint | Final inspection, lien waivers |
This example is illustrative and not a quote. A builder buys a dated three-bedroom house for $280,000 and plans a $120,000 renovation, most of it done by his own crew.
At 90% of purchase, the purchase portion of the loan is $252,000. At 100% of rehab, the rehab holdback is $120,000. Total loan: $372,000. Cash needed at closing before closing costs is the remaining 10% of the purchase price, $28,000.
The builder also plans enough cash to carry the first phase of work, monthly interest and a cushion for overruns, because the first draw is paid only after that phase is complete and inspected.
Construction skill solves a lot, but it does not solve everything a lender reviews. These are the issues that most often slow a contractor's file.
Builders often want to take on structural work, additions or tear-downs. A heavy rehab can still fit a fix and flip loan when the existing structure stays. When the plan is to demolish and build new, a ground-up construction loan is usually the right tool, priced from 10.00% with leverage up to 85% of total cost.
If you are not sure which side of that line a project falls on, send the scope. The financing team can review it and come back with 2–3 options.
A contractor file moves fastest when the construction side is as clean as the deal side. Have the purchase contract, a line-item budget with a timeline, your license and insurance certificates, your entity documents and recent bank statements showing cash for the down payment, closing costs and carry.
Add a short summary of completed jobs and any past flips. It helps underwriting give you credit for what you have actually built.
On many programs, yes. The lender reviews your license, insurance and a detailed line-item budget instead of an outside bid. Some programs require a licensed contractor on the job, so being licensed yourself helps.
It depends on the program. Some count completed construction jobs toward the experience that sets leverage and pricing. Others count only properties you bought and sold. Show both and let the financing team match you to the program that credits it.
Treatment varies by program. Materials, subcontractors and reasonable labor are commonly funded. Contractor profit or overhead on your own project may be limited or excluded, so confirm before you finalize the budget.
The same way they work for anyone: finish a phase, request a draw, pass an inspection and receive funds for the completed work. You need cash to cover each phase before it is reimbursed.
Permits follow local rules, not the lender. Structural, electrical, plumbing and mechanical work usually needs them, and lenders may ask to see them before releasing related draws.
Usually not. A tear-down and new build fits a ground-up construction loan better. A fix and flip loan is designed for renovating an existing structure.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.