Fix-and-flip loans are one of the most accessible ways for new investors to start in real estate. These short-term, asset-based loans allow you to purchase distressed properties, renovate them, and resell for profit—all without needing perfect credit or traditional income documentation.
1. What Is a Fix-and-Flip Loan?
A fix-and-flip loan is a short-term loan designed for buying and renovating properties.
Key features:
- Fast closing
- Rehab funds included
- Based on ARV
- Flexible documentation
2. Why Lenders Focus On ARV
ARV—After-Repair Value—drives the entire loan.
Instead of lending based on the purchase price, lenders lend on what the property will be worth once renovated.
Most lenders offer 65–75% of ARV.
3. Basic Requirements for Beginners
You don’t need perfect credit or a long history, but lenders want:
- 620–660+ credit
- 10–20% down or skin in the game
- Liquidity for part of the rehab
- A realistic scope of work
- Comparable sales to support ARV
4. The Importance of a Rehab Budget
Your budget must be:
- Itemized
- Contractor-verified
- Logical for the property
- Matched to the comps
Lenders decline deals with unrealistic rehab numbers.
5. Step-By-Step: How to Get Approved
Step 1: Get Pre-Qualified
Know your loan limits before shopping.
Step 2: Run Your ARV Correctly
Use real comps—not wishful thinking.
Step 3: Get Contractor Bids
Two bids increase credibility.
Step 4: Submit a Complete Package
Include ID, bank statements, contract, budget, comps, and experience.
Step 5: Appraisal & Feasibility Review
The lender reviews the ARV and rehab scope.
Step 6: Sign closing documents and start draws.
Rehab funds are released in stages as work is completed.
6. Common Beginner Mistakes to Avoid
- Overestimating ARV
- Underestimating repair costs
- Using vague rehab numbers
- Responding slowly to lender requests
- Choosing the wrong contractor
These mistakes slow approvals and cut into profits.
Final Thoughts
Fix-and-flip loans give beginners the leverage needed to break into real estate—if the deal, budget, and documentation are strong.
Approach your flip like a business, not a gamble. With preparation and clear communication, even first-time investors can secure funding and complete profitable projects.
CONTACT;:whatapps no : +1-448-230-7488 & phone no : +1-201-680-0991
Email: annie@insightflending.com