Business Funding Questions • 23 • realestate
What is fix-and-flip financing?
Direct answer: Fix-and-flip financing is generally short-term real estate capital used to acquire, renovate, stabilize, and resell or refinance an investment property. Underwriting commonly considers purchase price, current and projected value, renovation scope, borrower experience, credit, liquidity, timeline, and exit strategy.
What determines the answer?
- Acquisition price and verified property value
- Detailed rehabilitation budget and scope
- After-repair value assumptions and comparable support
- Borrower experience, credit, liquidity, and reserves
- Timeline, permits, contractor plan, and exit strategy
Common scenarios
An investor may finance acquisition and part of a controlled renovation, with construction draws released under the provider’s process.
A project intended for rental may transition from short-term rehabilitation financing to longer-term investor financing after stabilization.
Important considerations
Projected after-repair value is not guaranteed. Cost overruns, delays, market changes, permits, and carrying costs can materially affect the result.
Understand draw procedures, required equity, interest, fees, extension risk, guarantees, and the backup exit.
How to prepare
- Create a line-item rehab scope and timeline.
- Obtain contractor bids and comparable value support.
- Document experience and liquidity.
- Submit the complete property scenario for review.