What Is a Fix & Flip Loan?

HomeBlogWhat Is a Fix & Flip Loan?

A fix & flip loan is a type of short-term financing designed specifically for real estate investors who purchase distressed or undervalued properties, renovate them, and then sell them for a profit. These loans provide investors with the necessary capital to purchase, repair, and resell properties quickly, allowing them to take advantage of profitable opportunities in the real estate market.

What Is a Fix & Flip Loan?

How a Fix & Flip Loan Differs from Other Financing

Fix & flip loans differ from traditional loans because they have shorter repayment terms—repayment periods range from six months to two years. These loans also have higher interest rates and fees than conventional loans. Fix & flip loans are primarily based on the property’s value after it has been renovated rather than its current value. This means that investors can borrow a percentage of the property’s expected value after renovations, known as the after-repair value, or ARV.

Advantages of a Fix & Flip Loan

In addition to providing the necessary capital to purchase and renovate properties, fix & flip loans offer real estate investors several advantages. These quick loans allow the investor to take advantage of profitable investment opportunities. Traditional loans take much longer to secure, so the deal may disappear when you have the money. Fix & flip loans also allow you to tailor their loan terms to align with investment timelines.

We Can Provide the Capital You Need

At Investor Loans Express, we can help you with a fix & flip loan. Contact us today to discuss your funding options if you want to flip a home.