How to Find the Right Fix and Flip Lenders for You: A Guide

Nothing is more exciting than funding your fix and flip project, especially when you found the perfect piece of property to rehab. You may have already planned what you need to fix, who to contract, and your project timeline.

The only thing missing is the financing to take care of the project. So who are you to reach out to? A reputable fix and flip lender. Finding the right lender for you and your business needs can be tricky if you do not do your research.

There is no need to fret, though; we have you covered. In this brief fix and flip guide, we will go over how to vet the right fix and flip lender for you and who you can reach out to for more questions. 

What Are Fix and Flip Loans?

A fix and flip loan, also known as a hard money loan, is a short-term loan that most real estate investors use to purchase and renovate a piece of property.

Some investors use lines of credit or conventional loans to fund their projects, but most investors use fix and flip loans. To obtain a hard money loan, you will need to reach out to a private fix and flip lender or individual, as most traditional banks do not offer hard money loans.

Pros of Fix and Flip Loans

There are many significant advantages of partnering with a fix and flip lender for your hard money loan, such as fast funding. Quick funding is a substantial perk that most investors enjoy, especially if they are bidding on auctioned properties or foreclosures.

Once the home sells in the auction, they need to be able to pay for the property in full at the close of the sale.

Traditional loans take months to approve, whereas most hard money loan lenders provide the funds within days, if not a couple of weeks. Some lenders can provide you with capital within 24 hours after approval.

Flexible Terms

Unlike traditional lending, hard money loans are not backed by the government, which means these types of loans do not have the same rules and regulations. This allows hard money lenders to create their own underwriting criteria that their borrowers must meet before releasing the loan. 

Less Risk

When you obtain a conventional loan for a home, your creditworthiness is the only thing backing the loan. This is considered “soft money.” The funds are backed by a “hard asset,” such as the property you wish to purchase with a hard money loan.

This means that if you default on your hard money loan, the lender will take possession of the house and sell it to recoup their losses. With soft money loans, because there is no real property backing the loan, the borrower must repay the loan in its entirety. 

Cons of Fix and Flip Loans

Although these short-term loans come with significant advantages, there are a few cons that you should consider. For example, hard money loans have high-interest rates and down payment amounts.

The main reason why the rate and the down payment are so high is because of the risk the lender takes on. On your end, the only risk you have is losing the home to the lender.

The lender takes on the risk of lending you a large amount of money with the intention that you will pay them back timely. They only recoup the losses from whatever they sell the home for if you don’t. 

Poor Planning

Another time that this loan may be at a borrower’s disadvantage if you poorly plan the project. As mentioned earlier, these loans are short-term solutions meant for you to obtain capital quickly, fix a house, and turn a profit.

If you do not plan out the timeline of your project, you will delay your project. This will leave you with unexpected additional costs on top of an already expensive loan. 

How to Find Fix and Flip Lenders

Let’s now get into finding the right fix and flip lender for you and your investment needs. The biggest marketplace for fix and flip lenders is online. There are many different private institutions and investors you can reach out to for a hard money loan.

You can also find lenders in your local community. It is imperative that you do your necessary research before picking a lender.

Compile a list of questions that you may have for a potential lender and ask them. If they are hesitant to provide information, look for a different company.

Ask Other Investors

If you are a part of a real estate investor group, you can ask other investors about who they used to fund their fix and flip projects. Make sure to ask them questions about how the application process was and how quick the turnaround time was. 

Other questions to ask:

  • What was their interest rate?
  • How responsive was the lender?
  • How was the overall experience?

Keep in mind the interest rate will vary depending on the property you wish to purchase and other terms and conditions set by the lender. You may also want to ask about any fees the investor paid for the loan. Reviewing the lender’s website for their reviews can also help you gauge how other customers liked the lender. 

Vetting the Right Lender

Even if you find a lender you like to work with, make sure to read the terms and conditions thoroughly. As mentioned earlier, hard money loans do not have the same regulations as conventional and other government-backed loans like FHA or VA loans.

This means that hard money lenders can set the terms and interest rates for whatever they wish. Make that you review your contract before you agree to anything to make sure that you do not fall prey to predatory lending.

Comparing Fix and Flip Lender Terms

As mentioned throughout this article, it is best to review the terms and conditions of your loan before you commit to any lender. This protects you and your business interest. The last thing you want is to fall prey to predatory lending and get caught in a web of payments you cannot afford. 

Loan Amounts

Most fix and flip lenders offer loans between $50,000 to 4 million dollars. Occasionally, a few lenders will provide larger loans over 4 million dollars to experiences real estate investors to purchase multiple properties.

Depending on your experience with fixing and flipping homes, how much money you need, and where you buy properties determines how much money a lender will release to you. 

Loan to Value Ratios

Loan to value ratios, also known as LTV, is a number that fix and flip lenders use to base the minimum amount they will loan to you. Most lenders state that they will lend you 100% of the cost to buy a property up to 60% to 80% of its LTV.

This means that most hard money lenders will only lend you 80% of the loan amount, and you will need to put down 20% of the home’s purchase price. The lower the LTV, the more money you will need to put down to secure funding. 


Some fix and flip lenders charge points, which are expressed as percentages, on the money lent to you. These points relate to the closing costs and other fees associated with processing your hard money loan.

You can pay these fees once upfront, or you have the option to have these points rolled into the monthly payment of your loan. These points are calculated using the LTV for the property in question. This can be as low as 1% or 2% of the loan, but it can also be as high as 10%. 

Not all fix and flip lenders assign points. Some other lenders ask for a flat-rate fee, while others assign points based on the borrower’s experience. To keep your costs as low as possible, you will want to pay as few points as you can. 

Fund Your Fix and Flip Project

Finding the right property for your fix and flip loan should be the only major obstacle in the way of your real estate investment dreams. Partnering with a reputable fix and flip lender ensures that you will receive the funds you need for your project and ensures that you are dealing with the right lender.

Contact us now if you are ready to partner with a reputable lender with years of experience lending fix and flip loans. Our team is ready to assist you with any questions or concerns you have about the fix and flip loan process.

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