Clear House Lending connects real estate investors and developers with the right lender from our network of 6,000+ private capital sources. Bridge, DSCR, SBA, hard money, and construction loans -- most borrowers get term sheets within 48 hours.
Key Takeaways
A fix and flip loan is short-term financing specifically designed for real estate investors who buy properties, renovate them, and sell for profit. Unlike traditional mortgages, these loans are structured for speed and flexibility, with terms typically ranging from 6 to 18 months. [1]
Fix and flip loans typically cover both the purchase price and renovation costs, with renovation funds disbursed in draws as work is completed. This allows investors to leverage capital efficiently across multiple projects. In 2024, house flipping accounted for roughly 8% of all home sales nationwide, generating an average gross profit of $66,000 to $72,000 per flip in active markets.[1]
The key advantage of fix and flip financing over conventional mortgages is speed. While a traditional bank loan takes 45-90 days to close, hard money and bridge lenders specializing in flips can fund in as little as 5-14 days. In competitive markets, this speed is the difference between winning and losing a deal.
3-7 days
fastest closing times for hard money loans
60-70%
typical LTV for hard money loans (asset-based lending)
10-15%
interest rate range for commercial hard money loans
Source: Clear House Lending Market Data
2-5 points
typical origination fees for hard money financing
The loan covers a percentage of the purchase price (typically 80-90% of acquisition cost). Many lenders base maximum loan amount on the After-Repair Value (ARV), allowing you to borrow based on what the property will be worth after renovations. This ARV-based approach means you can acquire properties with less cash out of pocket on deals where the spread between purchase price and ARV is large.
Renovation funds are held in reserve and released in "draws" as work is completed. After you finish each phase of renovation, the lender inspects and releases funds for completed work. This protects both you and the lender. Typical draw schedules include milestones like demolition complete, rough-in (plumbing, electrical, HVAC), drywall, and final finishes. [2]
Most fix and flip loans are interest-only during the loan term, minimizing monthly payments while you complete renovations. Some lenders even allow interest reserves so you don't make payments during construction. You only pay interest on funds drawn, not the full loan commitment, which keeps carrying costs manageable during the renovation period.
The loan is repaid when you sell the property (the flip) or refinance into permanent financing (the BRRRR strategy). Loan terms are designed to match typical flip timelines of 4-8 months for cosmetic renovations and 8-14 months for major rehabs.
| Term | Typical Range | Notes |
|---|---|---|
| Loan Term | 6-18 months | Extensions available for 0.5-1 point |
| Interest Rate | 10-14%+ | Lower for experienced flippers |
| Origination Fee | 1-3 points | Percentage of total loan amount |
| Purchase LTC | 80-90% of purchase price | Higher leverage for repeat borrowers |
| Renovation Financing | 100% of rehab budget | Released in draws upon inspection |
| Max LTV (ARV) | 65-75% of After-Repair Value | Overall cap regardless of LTC |
| Minimum Credit Score | 600-680 | Varies by lender; asset-based focus |
| Closing Time | 5-14 days | Hard money; bridge loans 2-3 weeks |
After-Repair Value (ARV) is what your property will be worth after renovations. Many lenders will loan up to 70-75% of ARV, which can cover 100% of your purchase plus renovation costs on the right deal. This is how experienced flippers minimize cash out of pocket. For example, if a property has an ARV of $340,000, a 70% ARV loan provides $238,000 in total financing.
| Purchase Price | $200,000 |
| Renovation Budget | $50,000 |
| Total Project Cost | $250,000 |
| After-Repair Value (ARV) | $340,000 |
| Max Loan (70% ARV) | $238,000 |
| Purchase Financing (90%) | $180,000 |
| Renovation Financing (100%) | $50,000 |
| Total Loan Amount | $230,000 |
| Carrying Costs (6 months at 12%) | ~$13,800 |
| Origination (2 points) | $4,600 |
| Cash Required | $20,000 + closing costs |
| Estimated Gross Profit | ~$71,600 |
*Example for illustration. Actual terms, costs, and profits vary by lender and deal specifics. Does not include selling costs (agent commissions, transfer taxes, title fees).
Asset-based loans from private lenders. Fastest closing (5-10 days), highest rates (10-14%+). Best for: deals requiring immediate closing, first-time flippers, credit-challenged borrowers. Hard money lenders focus primarily on the property value and your exit strategy rather than your personal financial profile. [2]
Learn more about Hard Money Loans
Similar to hard money but often from institutional lenders with slightly better terms. Closing in 2-3 weeks. Best for: experienced flippers, larger projects ($500K+), and borrowers with stronger credit profiles. Bridge lenders may offer lower rates (8-12%) and higher leverage for qualified borrowers.
Use fix-and-flip financing to buy and renovate, then refinance into a DSCR loan and hold as a rental. This "Buy, Rehab, Rent, Refinance, Repeat" strategy uses short-term debt for renovation and long-term debt for holding. It is the most capital-efficient approach for building a rental portfolio because you recycle your cash from project to project.
Learn about BRRRR Method Financing
| Feature | Hard Money | Bridge Loan |
|---|---|---|
| Closing Speed | 5-10 days | 2-3 weeks |
| Rate Range | 10-14% | 8-12% |
| Min Credit Score | 600-650 | 660-700 |
| Best For | Speed, first-time flippers | Lower rates, experienced investors |
| Typical LTV (ARV) | 65-70% | 70-75% |
[4] Terms vary by lender and borrower profile. Contact us for current rates.
Profitable flipping starts with disciplined deal analysis. The most widely used framework is the 70% Rule: never pay more than 70% of the After-Repair Value minus renovation costs. This provides a built-in profit margin and cushion for unexpected expenses.[3]
Maximum Purchase Price = (ARV x 70%) - Renovation Costs
For example, if a property has an ARV of $300,000 and needs $40,000 in renovations: $300,000 x 0.70 = $210,000 - $40,000 = $170,000 maximum purchase price. This formula accounts for your profit margin, carrying costs, and selling expenses in one simple calculation.
Successful flipping requires discipline in deal analysis, renovation management, and exit execution. Use this checklist before committing to your next project.[5]
Fix and flip returns are directly influenced by local and national market conditions. Understanding these factors helps you time your projects and select the right markets. [3]
Most fix and flip lenders require 10-20% of the purchase price as a down payment. However, since many lenders finance up to 100% of renovation costs, your total cash outlay relative to the entire project can be much lower. Experienced flippers with a strong track record may qualify for lower down payments.
Yes, first-time flippers can get financing, though terms may be slightly less favorable. Some lenders require at least one completed project, but many will fund first-time flippers with a higher equity requirement (15-20% vs 10%), a strong renovation plan, and an experienced general contractor.
Most fix and flip lenders require a minimum credit score of 600-680, though the exact requirement varies by lender. Higher credit scores qualify for better rates and higher leverage. Because these are asset-based loans, the property value and deal quality matter more than your credit score alone.
Hard money fix and flip loans can close in as little as 5-14 days from a complete application. Bridge loans from institutional lenders typically close in 2-3 weeks. This speed is critical for winning deals in competitive markets where sellers prioritize fast, certain closings.
ARV (After-Repair Value) is the estimated market value of the property after all renovations are complete. LTC (Loan-to-Cost) is the ratio of the loan amount to total project cost (purchase plus renovation). Most lenders use both metrics: they cap the total loan at 65-75% of ARV and separately cap purchase financing at 80-90% LTC.
Most fix and flip lenders offer extension options, typically in 3 or 6-month increments for an additional fee (usually 0.5-1 point). This is why building a realistic timeline with buffer is important from the start. If you anticipate delays, communicate early with your lender to arrange an extension before the loan matures.
Clear House Lending's network includes hard money lenders, bridge lenders, and fix-and-flip specialists who compete for your business. We match you with financing that fits your project timeline, experience level, and deal structure.
U.S. Home Flipping Report. ATTOM Data Solutions, 2025.
https://www.attomdata.com/news/market-trends/flipping/.
Industry Standards and Guidelines. American Association of Private Lenders, 2025.
https://www.aaplonline.com/.
Investment and Vacation Home Buyers Survey. National Association of Realtors, 2025.
https://www.nar.realtor/research-and-statistics.
Commercial/Multifamily Finance Report. Mortgage Bankers Association, 2025.
https://www.mba.org/.
House Flipping Statistics and Trends. RealtyTrac, 2025.
https://www.realtytrac.com/.
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