Fix-and-Flip Loans 101: What Lenders Look For
Why Fix-and-Flip Loans Matter
If you’re planning to buy, renovate, and resell a property, chances are you’ll need short-term financing. Traditional banks aren’t built for these kinds of deals, which is why private lenders and hard money lenders fill the gap. But here’s the thing: they don’t just look at your credit—they evaluate the whole package: you, the property, and your plan.
The Core Things Lenders Care About
Your credit profile
While fix-and-flip lenders aren’t as strict as traditional banks, they still look at your credit history to gauge responsibility. A strong score helps, but many lenders focus more on your repayment behavior and recent trends than on a perfect number.
Experience and track record
Have you done a flip before? Even one successful project makes you less risky. If you’re brand new, you can still qualify, but expect more questions about your plan and who’s on your team (contractors, agents, etc.).
The deal itself
The property is the real star of the show. Lenders evaluate:
After Repair Value (ARV)
Purchase price vs. ARV (loan-to-value)
Renovation scope and timeline
If the numbers make sense and the exit is realistic, they’ll be more comfortable funding you.
Collateral and down payment
Most fix-and-flip lenders want you to have some skin in the game—usually 10–20% down. The property itself serves as collateral, but lenders want to see you invested as well.
Exit strategy
Lenders ask: how are you paying us back? Whether it’s resale, refinance into a DSCR loan, or another path, they want to know the endgame.
The Loan Approval Process, Step by Step
It usually looks like this:
Application with basic borrower and property info
Lender review of credit, deal, and docs
Term sheet issued (rates, points, terms)
Appraisal/inspection of property
Final approval and funding
It can move quickly—some lenders fund in days—but only if your paperwork and plan are tight.
Common Mistakes Beginners Make
Underestimating costs: Forgetting permits, holding costs, or contractor overruns.
Weak timelines: Being vague about how long the rehab will actually take.
No exit plan: Hoping the market will “work itself out” instead of showing multiple scenarios.
How to Position Yourself as “Approval-Ready”
You don’t need a decade of experience to get approved—you just need to look prepared. That means:
Having a clean, realistic scope of work
Showing comparables to justify ARV
Having reserves for overruns
Partnering with reliable contractors
Even if it’s your first deal, showing lenders you’ve thought through the details goes a long way.
How Fuel My Deal Supports Fix-and-Flip Investors
At Fuel My Deal, we specialize in helping new and growing investors close confidently. We connect you with lenders, provide guides that break down the numbers, and even offer deal submission support so you’re not figuring it out alone.
FAQs
What credit score do I need for a fix-and-flip loan?
Most lenders want to see 620+, but they’ll weigh the deal itself more heavily.
Do I need experience to qualify?
No—but you’ll need to show a clear plan, contractors, and realistic numbers.
How much money do I need down?
Typically 10–20% of the purchase price, plus reserves for holding costs.
How fast can I get funded?
Many hard money lenders close in 7–14 days, some faster with complete docs.
What documents do I need?
Expect ID, entity docs, scope of work, contractor bids, and sometimes tax returns.
Can I refinance after the flip?
Yes—many investors transition into DSCR loans for longer-term rentals.
Next Steps
If you’re serious about flipping, start by tightening your plan. Get the numbers right, line up your team, and show lenders you’re organized.
This article is for educational purposes only and is not financial or legal advice. Always consult with licensed professionals and your title/escrow company.