Financing Fix and Flip Projects
Fix & Flip Loans — Fast, Flexible Financing for Your Next Real Estate Investment
Fix-and-flip loans are short-term, equity-driven loans made to buy, renovate, and resell properties quickly for profit. This guide breaks down how fix-and-flip financing works, the key loan mechanics investors need to know (LTV, ARV, draw schedules), and practical timelines so you can close time-sensitive deals and manage carrying costs. You’ll find program overviews, underwriting priorities, a document checklist for rapid approvals, and step-by-step timelines built to support funding in days rather than weeks. We also include sample programs, a lender workflow that highlights equity-based underwriting versus traditional bank lending, a program comparison, 24-hour pre-approval checklists, quantified benefits for investment decisions, 2025 California market insights, and clear next steps to submit a deal or contact our lending team. Keywords like fix and flip loans, rehab loans, hard money loans, LTV, and ARV are used throughout to help you evaluate leverage and risk on your next flip.
What Are Fix and Flip Loans and How Do They Work?
Fix-and-flip loans are short-term loans that cover both the purchase and renovation of an investment property. Lenders underwrite primarily to the property’s current equity and projected after-repair value (ARV), which speeds approvals compared with traditional mortgage underwriting. Typical financing starts with a purchase advance and includes staged rehab draws tied to inspections so funds match contractor milestones and preserve investor cash flow. Successful flips depend on realistic ARV estimates, disciplined rehab budgets, and a clear exit plan—usually a resale or refinance—so underwriters can model repayment from expected sale proceeds. Understanding these mechanics helps you calculate required down payment, leverage, and holding-cost exposure before you bid.
What Defines a Hard Money Loan for Real Estate Investors?
A hard money loan is a short-term, asset-backed loan where the property value and projected ARV carry the most weight in approval decisions, rather than extensive reliance on credit scores or tax returns. Hard money lenders focus on speed and flexibility, offering terms and draw schedules aligned with flip timelines. Typical borrowers include experienced flippers, investors with under-collateralized opportunities, and owners needing rescue financing. Underwriting centers on deal geometry—purchase price, ARV, and rehab scope—so fewer traditional bank documents are required, provided you supply clear scope-of-work and valuation evidence. In exchange for faster closings and flexibility, borrowers typically accept higher interest and fees. That trade-off makes hard money well-suited for competitive, time-sensitive acquisitions.
How Do Loan-to-Value and After-Repair Value Impact Fix and Flip Financing?
Loan-to-value (LTV) and after-repair value (ARV) determine how much a lender will fund and therefore define investor leverage and down-payment needs. LTV expresses the loan as a percentage of current value or purchase price; ARV-based underwriting compares the loan to the expected post-rehab sale value. Many equity-focused lenders underwrite to ARV (for example, 70% of ARV), then advance rehab funds through inspection-based draws. Accurate ARV estimates and conservative contingency holdbacks affect required borrower equity, rehab reserves, and the cushion for cost overruns. Investors who manage scope tightly and verify local comps reduce valuation risk and improve approval odds.
Which Fix and Flip Loan Programs Does Fidelity Funding Offer?
Fix-and-flip lenders typically offer several programs to match different deal scenarios—from purchase-and-rehab to foreclosure bailouts, second-trust financing, and rental-focused DSCR or commercial bridge loans. Programs differ by allowable leverage (LTV/ARV), term, rehab funding percentage, funding speed, and fees—factors investors weigh when selecting a lender. The table below summarizes typical attributes you should expect from an equity-focused hard money partner so you can quickly compare tradeoffs and choose the product that matches your exit plan and property type.
| Loan Program | Typical LTV / ARV | Term | Rehab Funding Percent | Funding Speed | Fees |
|---|---|---|---|---|---|
| Purchase & Rehab | Up to 70% LTV; 85–90% ARV | 12 months | Up to 100% of documented rehab | 5–7 days | Origination & inspection fees |
| Foreclosure Bailout | Up to 70% LTV (deal dependent) | 6–12 months | Rehab funding as needed | 5–7 days | Accelerated fees possible |
| Second Trust Deed | Subordinate to first lien; % varies | Short-term bridge | Cash-out for rehab | 3–7 days | Subordination and origination fees |
| DSCR / Commercial Bridge | Up to ~65% LTV (rental focus) | 12 months+ | Program-dependent | 5–10 days | Program-specific fees |
Use this comparison to match deal geometry with the program that best supports your exit strategy and equity position.
What Are the Features of Fidelity Funding’s Purchase and Rehab Loans?
Purchase-and-rehab loans combine acquisition financing with structured rehab draws so renovations can proceed without interrupting cash flow. Fidelity Funding’s fix-and-flip products are commonly underwritten to ARV, with rehab funds released on an inspection-driven draw schedule that lets investors pay contractors as work is completed while maintaining oversight. Typical features include short terms aligned with flip timelines, quick funding windows, and the ability to allocate the full documented rehab budget when the scope and bids are provided. Prepare a clear scope of work, contractor bids, and contingency plans to support draws and protect margin—this product is built to accelerate deal execution for buyers who need both acquisition and rehab capital to scale flips.
How Do Foreclosure Bailout and Second Trust Deed Loans Support Investors?
Foreclosure bailout loans provide immediate liquidity to stop foreclosure actions and stabilize title, while second trust deed loans supply subordinate capital for rehab or bridge needs without replacing the first lien. Bailout loans are arranged quickly to cover delinquent liens and essential repairs; second trust deeds let investors access additional cash when an existing first lien remains. Both require clear lien documentation, payoff figures, and a credible exit strategy—lenders evaluate urgency, equity, and the exit plan to ensure the bailout or second lien preserves the deal’s economics. These options add flexibility when primary financing is insufficient or time is critical.
How Can Investors Qualify and Apply for Fix and Flip Loans?
Qualification for fix-and-flip loans centers on deal equity, property condition, and the exit strategy—less on personal credit or tax returns—so lenders can make faster decisions on strong projects. Underwriting evaluates purchase price versus ARV, required rehab budget, and the borrower’s experience or contractor plan to set risk and structure. A streamlined application highlights asset documentation—comps, scope, and budget—followed by quick title and valuation checks to support a rapid pre-approval.
Below is a targeted document checklist to speed underwriting and meet accelerated-approval standards.
| Document / Requirement | Who Provides / Purpose | Typical Examples |
|---|---|---|
| Purchase Contract | Borrower / Verifies terms | Fully executed offer showing price and contingencies |
| Photos & Property Info | Borrower / Condition assessment | Interior/exterior photos, square footage, bed/bath |
| Rehab Scope & Budget | Borrower/Contractor / Underwrites draws | Line-item estimate, contractor bids, timeline |
| Title Report or Vesting | Title/Title Company / Encumbrance check | Preliminary title showing liens |
| Proof of Funds / Reserves | Borrower / Ability to close | Bank statements or investor statements |
| Government ID & Entity Docs | Borrower / Legal verification | ID, LLC operating agreement if applicable |
This checklist prioritizes asset- and deal-level documents that let underwriters confirm collateral and rehab needs quickly so valuation and title steps can follow without delay.
- Submit core deal documents and a concise summary for an immediate property review and soft approval.
- Complete underwriting with a valuation and title check while preparing closing logistics.
- Sign loan documents, close, fund the initial purchase, and begin rehab draws per the agreed schedule.
These steps create a practical timeline lenders use to target 24-hour pre-approvals and 5–7 day closings when the submission is complete and the asset fits program criteria.
What Documents and Requirements Are Needed for Fast Loan Approval?
Fast approvals require concise, deal-focused documentation that demonstrates the property’s condition, the rehab plan, and a credible exit. Essentials include a signed purchase contract, up-to-date photos, a detailed rehab scope with contractor bids, a preliminary title report, and proof of any required reserves. Extra materials that speed approval include comps used for ARV, permits or a permit strategy, and contractor licensing—these reduce valuation questions and shorten underwriting. Submit organized files in a single package and use standard formats (line-item budgets, clear photos, labeled documents) to help lenders deliver pre-approvals in hours instead of days. From there, valuation and title work lead straight to closing.
What Are the Steps to Get Approved and Funded Within 5 to 7 Days?
Closing in five to seven days depends on tight coordination across submission, underwriting, valuation, title, and signing. Start by submitting the checklist and purchase contract for an immediate review and soft approval—often within 24 hours if files are complete. Next, the lender orders or completes valuation and coordinates title work while confirming the rehab budget and draw schedule; underwriting typically finishes in 1–3 days depending on complexity. Once conditions are cleared, loan documents are prepared and closing is scheduled; funding follows title vesting and signed documents, with acquisition funds wired at closing and rehab draws released after inspections. Clear responsibilities—borrower providing docs and contractor access, lender managing valuation and title—are essential to meet compressed timelines.
What Are the Key Benefits of Using Fidelity Funding for Fix and Flip Financing?
An equity-focused, fast-funding lender helps investors shorten time-to-close, underwrite to property economics, and offer program variety that supports different exit strategies. With Fidelity Funding, investors gain rapid pre-approvals, inspection-driven rehab funding, and flexible products for bailouts, second liens, or DSCR-backed rental transitions.
The table below quantifies typical benefits so you can model the impact on returns and holding costs.
| Benefit | Measured By | Example / Impact |
|---|---|---|
| Speed | Approval & Closing Time | Pre-approvals in 24 hours; closings in 5–7 days |
| Leverage | LTV/ARV Ratios | Up to 70% LTV or 85–90% ARV increases purchasing power |
| Rehab Flexibility | Rehab % & Draws | Up to 100% rehab funding with inspection-based draws |
| Underwriting Focus | Collateral vs. Credit | Equity-based underwriting lets borrowers with lower credit qualify on strong deals |
This table shows how speed and equity-focused criteria translate into tangible investor advantages—helping you win competitive offers and reduce carrying costs.
- Fidelity Funding’s equity-based approach helps you close quickly on competitive offers and execute rehab plans without bank delays.
- Faster approvals reduce acquisition days on market, lowering interest and holding costs versus traditional financing timelines.
- A range of programs gives investors flexibility to choose purchase-and-rehab, bailout, subordinate financing, or rental/DSCR solutions that match their exit plan.
How Does Fast Approval and Flexible Terms Help Real Estate Investors?
Fast approval and flexible terms let investors act quickly on undervalued or off-market opportunities—where timing often determines profit—and minimize carrying costs during renovation. Quick pre-approval strengthens your negotiating position because sellers and brokers favor buyers who can close fast. Flexible terms—like rehab funding up to documented needs and draw-based inspections—help you deploy capital efficiently without tying up unnecessary equity. Together, speed and flexibility shorten time-to-exit and let you recycle capital into the next deal faster.
Why Is Equity-Based Lending Better Than Traditional Credit Checks?
Equity-based underwriting weighs the collateral and deal economics first, which can produce approvals when bank lending stalls over strict credit or tax-return rules. This approach evaluates projected ARV, rehab feasibility, and the exit plan—so investors with strong property equity or a reliable contractor can qualify even if personal documentation is imperfect. Equity-focused lenders reduce paperwork friction and shorten decision timelines by concentrating on verifiable, property-level data rather than prolonged personal verification. For many flippers, that means access to capital when speed and asset merit matter most.
What Are the 2025 Market Trends and Profit Opportunities for Fix and Flip Projects in California?
In 2025, California fix-and-flip markets face higher rates, tight resale inventory, and rising renovation costs—conditions that compress margins but preserve opportunities for investors who focus on value-driven renovations and accurate ARV forecasting. Demand for updated, move-in-ready homes remains strong in many local markets; investors who control rehab costs and choose high-ROI upgrades can still protect profit. Geographic selection, conservative ARV assumptions, and tight contractor management are critical—prioritize buyer preferences, energy-efficient upgrades, and fast sale prep to shorten days on market. Align program choice with your exit timeline to pursue profitable flips even amid cost pressures.
Which California Markets Are Hot for Fix and Flip Investments in 2025?
Top California flip markets in 2025 combine buyer demand, achievable acquisition pricing, and renovation ROI potential. Evaluate markets by sale-to-list ratios, renovation demand trends, and local employment or migration patterns that sustain buyers. Consider commute patterns, school districts, and buyer preferences—updated kitchens and energy-efficient features often deliver the strongest resale premiums. Local underwriting must reflect neighborhood comps and realistic timelines to avoid valuation mismatches that erode returns.
- Selected Los Angeles County submarkets with high renovation demand and buyer depth can deliver reliable flip turnarounds.
- Targeted Orange County corridors with buyer appetite for updated housing remain attractive for value-add projects.
- Inland and coastal pockets across San Diego and Riverside offer varied price bands that support different flip strategies.
How Can Investors Maximize Profit Despite Rising Renovation Costs?
To protect profit when renovation costs rise, prioritize upgrades that deliver the highest resale premium, negotiate fixed-price contracts with proven contractors, and keep strict contingency reserves. Focus on kitchen and bath improvements with durable finishes, fix deferred maintenance that deters buyers, and add modest energy-efficient upgrades that broaden buyer appeal. Solicit multiple contractor bids, stage cash flow with draw schedules, and confirm material costs before purchase to reduce overruns. Finally, choose a funding program that supports the rehab—draw-based funding reduces out-of-pocket exposure and preserves capital for your next acquisition.
- Prioritize high-ROI renovations and limit luxury scope.
- Lock material prices where possible and budget realistic contingencies.
- Use draw schedules and inspection-based funding to align payments with completed work.
These tactics help preserve gross margins and keep flips profitable despite cost pressures.
How Do I Get Started with Financing My Fix and Flip Project at Fidelity Funding?
Getting started with an equity-focused lender means preparing a concise deal summary and core documents, submitting the package for rapid review, and coordinating valuation and title to meet the lender’s target timeline. Fidelity Funding is a hard-money lender offering fix-and-flip products designed for quick approvals and flexible rehab funding across California. We operate from Glendale, California, and serve Los Angeles, Orange County, San Diego, Riverside, San Bernardino, Ventura, and surrounding markets. Licensing details: NMLS: 340265 and California BRE License: 01885027—use these as trust signals when evaluating a lending partner.
How Can I Submit a Deal or Contact Fidelity Funding’s Lending Team?
To submit a deal for rapid review, assemble the purchase contract, photos, rehab scope and contractor bids, property details, and preliminary title information before contacting the lending team to request a pre-approval. We accept deal submissions through standard channels and respond to initial inquiries with an asset-focused review; include clear ARV comps and a line-item rehab budget to speed underwriting. For direct inquiries, call our lending office at (877) 300-3007 to discuss program fit and timelines—mention if you need fast funding. Expect the lender to outline next steps for valuation, title, and document delivery as part of a coordinated path to closing.
What FAQs Should I Know About Fix and Flip Loans Before Applying?
Common investor questions focus on rates, terms, credit, eligibility, and speed. Short answers set expectations and reduce back-and-forth during underwriting: approvals can be asset-driven with less emphasis on personal credit; typical LTV/ARV ranges for purchase-and-rehab cluster around 65–70% LTV or 85–90% of ARV; required documents include purchase contracts, photos, rehab budgets, and title reports; and funding speed is often marketed as pre-approval in 24 hours with closings targeted in 5–7 days when the submission is complete. Fees vary by program and deal complexity—discuss origination and inspection fees up front so you can model total transaction costs and protect projected profit margins.
- What if my credit isn’t perfect? Many equity-focused lenders emphasize collateral and ARV over credit scores, improving approval chances for strong deals.
- How quickly can I expect a pre-approval? With a complete submission, lenders commonly deliver soft approvals within 24 hours so you can bid competitively.
- What documentation speeds closing? Organized, labeled files for the purchase contract, rehab scope, photos, and title accelerate underwriting and valuation.
These quick answers help you prepare a submission that supports expedited underwriting and reduces friction on time-sensitive flips.
Frequently Asked Questions
What are the typical interest rates for fix and flip loans?
Rates vary by lender, borrower experience, and deal specifics. Typical ranges are roughly 8% to 12%, with some hard-money lenders charging more due to short terms and elevated risk. Compare multiple offers to find terms that fit your strategy and timeline.
Can I use a fix and flip loan for properties that need extensive renovations?
Yes. Fix-and-flip loans are designed for properties needing substantial work. Lenders fund based on current condition and projected ARV, so with a clear rehab plan and budget you can get financing for both purchase and renovation.
What is the difference between a fix and flip loan and a traditional mortgage?
Fix-and-flip loans are short-term, investor-focused loans for buying, renovating, and reselling properties quickly. Traditional mortgages are long-term loans intended for owner-occupancy. Fix-and-flip underwriting typically emphasizes property value and ARV over borrower income or tax returns, enabling faster approvals.
How can I improve my chances of getting approved for a fix and flip loan?
Present a solid investment plan: a detailed scope of work, realistic ARV estimates, and a clear budget. Demonstrate investing experience or provide a reliable contractor, and submit organized documentation that meets lender requirements to speed approval.
What are the risks associated with fix and flip loans?
Risks include market fluctuations, unexpected renovation costs, and delayed sales. If a property takes longer to sell, carrying costs can erode profit. Inaccurate ARV estimates can also leave funding gaps. Mitigate risks with market research and a contingency budget.
Are there any prepayment penalties with fix and flip loans?
Prepayment penalties vary by lender and program. Some loans include penalties; others do not. Review loan terms carefully and ask your lender about any early-payoff fees before signing.
What should I do if my project goes over budget?
If costs exceed the budget, act quickly: identify the causes, discuss scope adjustments with your contractor, and explore options with your lender—some programs allow additional funding or flexible terms to get you back on track.
Conclusion
Fix-and-flip loans give investors quick access to capital and flexible terms tailored to renovation timelines. Knowing how LTV and ARV drive underwriting lets you make smarter decisions that protect returns and manage risk. Fidelity Funding delivers rapid approvals and structured rehab funding designed to support your timelines—if you’re ready to move fast, start by preparing your deal package and contacting our team to get a rapid review.
