Fix & Flip Financing — The Complete Guide

What Is a Fix & Flip Loan?

A fix and flip loan is a short-term real estate loan used to purchase and renovate investment properties. Unlike a traditional mortgage, a fix and flip loan is designed to fund both the purchase price AND the cost of repairs — so you can acquire, renovate, and sell (or refinance into a rental) without tying up your own capital.

LTC vs LTV — Know the Difference

These are the two most important ratios in fix and flip lending:

Most lenders cap their total loan at 65–75% of ARV regardless of LTC. So even if your LTC looks good, the ARV cap is what limits the loan. Always run both calculations before submitting a deal.

What Is a Rehab Draw Schedule?

When you take a fix and flip loan, the rehab funds aren't released all at once. They're released in draws as work is completed. Here's how a typical draw schedule works:

1. Draw 1 (at close): First portion released — usually covers demo, framing, rough plumbing/electrical
2. Draw 2 (at inspection): Lender or inspector verifies completed work, next tranche released
3. Draw 3: Continued releases tied to construction milestones
4. Final Draw: Released when work is substantially complete

At LendingStreet we fund 100% of rehab costs through the draw schedule — you don't need to cover rehab out of pocket and get reimbursed later.

Fix & Flip Loan Requirements

Flip vs. Hold — Choosing Your Exit Strategy

Before you take a fix and flip loan, decide your exit strategy. This determines which product makes sense:

• Flip and sell: Fix & Flip loan → renovate → sell → pay off loan at closing
• Rehab and hold: Bridge loan → renovate → tenant in place → refinance into DSCR rental loan
• BRRRR: Bridge → rehab → rent → DSCR cash-out → repeat

Many investors come to us expecting one product and leave with a better structure. Tell us your goal and we'll design the right financing around it.

What Lenders Actually Look For

Fix and flip lenders evaluate deals — not borrowers. Here's what matters:

• ARV: After Repair Value — the most important number. Must support the loan amount.
• Rehab scope: Detailed scope of work with contractor estimates. Vague rehab numbers get declined.
• Purchase price: Is it below market? Overpaying kills margins and loan approval.
• Your experience: First-time flippers can still qualify — but expect lower LTC and slightly higher rates.
• Exit strategy: Clear plan to sell or refinance. Lenders want to know how they get paid back.

How to Close in 10 Days

Speed is your competitive edge. Here's what you need ready before you submit:

1. Purchase and sale agreement (or LOI)
2. Scope of work with contractor estimates
3. Photos of the property (inside and out)
4. Comparable sales (comps) supporting your ARV
5. Entity documents if closing in LLC

Submit all five at once and we can have a term sheet to you within 24 hours and close within 10 business days.

Ready to Submit Your Deal?

Tell us the purchase price, ARV, and rehab scope. We review every deal within 24 hours. No upfront fees.