What is a fix and flip loan?
Fix and flip loans are short-term financing used by real estate investors to purchase and renovate a property, then sell it for a profit. They are designed exclusively for investment properties — not primary residences — and are typically provided by private, non-bank lenders.
In plain terms, a fix and flip loan gives you capital to buy a distressed or undervalued home, fund the rehab, and exit within months by selling the finished product. Approval hinges primarily on the property and its projected after-repair value (ARV), rather than only your W-2s or tax returns. You repay the loan when you sell, or refinance into a long-term rental loan if you decide to hold.
The best fix and flip financing feels like a working partnership: quick to close, flexible on scope, and realistic about timelines. That's what we aim for at Grand Financial — even when a project gets messy for a minute.
How fix and flip loans work
Approval is asset-based
We underwrite to the ARV and a realistic scope of work, weighing purchase price, rehab budget, timeline and resale comps to estimate exit value. Your experience and liquidity still matter, but the property's potential carries most of the weight.
Speed gets you to the closing table
Time kills deals at auction and on distressed listings. With complete docs and an appraisal or desktop valuation in hand, private lenders can close in about 5 to 15 days.
Lending limits keep risk sensible
Proceeds are capped using the lower of a few guardrails — percentage of ARV, of purchase price, and of total cost. This keeps the capital stack balanced, so the deal still makes sense if the market wobbles or the rehab runs long.
Draws for rehab costs
Rehab funds are held back and released in stages. An inspector verifies completed work against the scope, then funds are wired. Planning materials and labor around the draw schedule matters more than it seems on day one.
Short terms, clear exits
Terms usually run 6 to 24 months. Most investors exit by selling; others refinance into a DSCR or rental loan if the numbers still pencil after rehab.
Advantages
- Fast funding — often within one to two weeks with a complete file.
- Accessible qualification — the asset and ARV matter more than perfect credit.
- Flexible terms — we can fund properties that would fail conventional guidelines.
- Leverage — keep more of your cash for multiple projects, or for the overrun you'll probably meet at least once.
Typical terms at a glance
Guidance only — final terms depend on deal profile.
| Feature | Typical range | Notes |
|---|---|---|
| Term length | 6 to 24 months | Short term, interest-only in most programs |
| Leverage | Up to 80–95% LTC Up to 65–80% ARV | Lower of constraints usually applies |
| Interest rate | Market-based | Price reflects speed and project risk |
| Points & fees | ~1.5–5% origination | Plus customary closing costs |
| Minimum credit | 620–660 for best pricing | Lower considered with compensating factors |
| Close time | ~5–15 days | Clean file and fast valuation help a lot |
| Rehab funding | Released in draws after inspection | Plan milestones around the draw schedule |
How we structure your deal
1. Discovery call
We review the target property, scope, timeline, exit and your experience. Quick and candid.
2. Term sheet within 24 hours of complete info
Rates and leverage depend on ARV, budget and risk. You get a few clear options rather than noise.
3. Valuation and underwriting
Appraisal or desktop valuation, comps that make sense, contractor bid review, and proof of liquidity for reserves.
4. Close and first draw
We fund the acquisition and, if applicable, an initial rehab reserve. Draws follow progress with predictable inspections so you can plan crews.
5. Exit support
Need a rental takeout or a bridge to listing season? We help you map the path. And if there's an ugly surprise behind the plaster, we stay calm, revisit the scope, and adjust the budget and timeline together.
Fix and flip vs. other options
Use as orientation, not as a commitment to terms.
| Criteria | Fix & flip (hard money) | Conventional mortgage | HELOC |
|---|---|---|---|
| Speed to close | About 5–15 days | 30–60 days | 2–4 weeks |
| Property condition | Any condition, heavy rehab allowed | Must meet habitability standards | Not tied to subject property |
| Underwriting focus | ARV, scope, experience, liquidity, exit | Income, DTI, credit, condition | Home equity, CLTV, income, credit |
| Term | 6–24 months, often interest-only | 15–30 years, amortizing | Revolving, variable |
| Cost of funds | Higher — reflects speed and flexibility | Lower, with tighter guidelines | Lower, variable-rate risk |
| Best use | Quick flips, value-add, auctions, distressed purchases | Move-in ready, owner-occupied | Supplement rehab cash flow |
Why investors choose Grand Financial
- Speed with discipline — streamlined underwriting and predictable draws.
- Straight talk — if a comp is off, we'll say so.
- National reach — programs for most markets in the United States.
- Creative structures — interest-only, cross-collateralization, and rental takeouts for holds.