A fix and flip loan is short-term, asset-based financing designed specifically for real estate investors who purchase distressed or undervalued properties, renovate them, and sell them at a profit. Unlike long-term rental mortgages, fix and flip loans are typically 6 to 18 months in duration and are structured to fund both the acquisition cost and the renovation budget.
Most fix and flip loans are structured as a combination of acquisition financing plus a rehab holdback. The lender advances the purchase amount at closing, and the renovation funds are released in draws as work is completed and verified by an inspector. This draw schedule ensures funds are deployed only as value is added to the property, reducing lender risk and keeping the borrower accountable to the project timeline.
Fix and flip lenders evaluate two critical metrics: Loan-to-Cost (LTC) and Loan-to-ARV (after-repair value). LTC measures total loan amount relative to the total project cost (purchase + rehab). Most lenders cap LTC at 85–90%. ARV is the estimated market value of the property after all renovations are complete. Lenders typically cap total exposure at 65–75% of ARV to ensure there's enough equity cushion at sale to cover principal repayment and closing costs.
Fix and flip loans serve experienced real estate flippers, real estate wholesalers who want to take properties through the renovation cycle themselves, and newer investors with strong net worth or equity partners. Lenders evaluate borrower experience (number of flips completed), the property's market location, and the projected ARV. Some lenders — including Riverside Park Capital — have programs for first-time flippers when the loan request metrics are sufficiently conservative.
One of the biggest advantages of fix and flip financing is speed. Because these are asset-based loans — meaning the property secures the loan rather than the borrower's income — approvals can happen in 24–48 hours and closings in as few as 7–10 business days. This speed is critical when competing for off-market loan requests or REO properties where cash buyers are common. Qualification focuses primarily on the loan request itself: purchase price, rehab budget, comparable sales (comps), and the borrower's track record.
Related Loan Program
Learn more about how Riverside Park Capital structures this loan type, rates, terms, and eligibility.
View Program