Fix & Flip Loans: The 6 Best Fix & Flip Financing Options

Fix-and-flip loans are used by short-term real estate investors to purchase and renovate a property before flipping it for a profit. This type of funding for flipping houses offers investors fast closings for properties in any condition. The most popular type of fix-and-flip loans are hard money loans.

LendingHome offers fix-and-flip loans to investors with competitive rates for prime borrowers. You can get prequalified online in minutes, see your exact rates, and receive funding in as little as 15 days. Additionally, there is no prepayment penalty for early repayment.

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Types of Fix & Flip Loans

1. Fix & Flip Hard Money Loan

A hard money loan is a short-term loan secured by real estate and used by fix-and-flip investors to purchase and renovate a property. Investors will use hard money loans to purchase, renovate, and sell a property within one year. These loans are ideal for funding a fix-and-flip project since they finance properties in poor condition.

Hard money loans, also referred to as rehab loans, have lower qualifications for approval, helping fix-and-flip investors receive approval and funding in as little as 15 days. Hard money lenders are more focused on the property and its potential value than the borrower’s background.

LendingHome is a national hard money lender that helps experienced and inexperienced investors secure funding for flipping. Rates are competitive for prime borrowers and prequalification takes minutes. You can fill out their brief online application to find your rate and prequalify in as quickly as three minutes.

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Fix & Flip Hard Money Loans at a Glance

Who Fix & Flip Hard Money Loans Are Right For

These house-flipping loans let experienced investors manage their own renovations while allowing novice flippers to use a licensed contractor. Regardless of expertise, the funding of a hard money loan can happen in as little as 15 days.

Hard money rehab loans are right for the following investors:

• Experienced fix-and-flip investors with two to three past rehab projects
• First-time investors who will have help from a licensed contractor
• Fix-and-flippers who need to compete with all-cash buyers

Fix & Flip Hard Money Loan Rates, Terms & Qualifications

Hard money loans generally have lower approval qualifications than conforming loans, helping fix-and-flip investors receive approval and funding in as little as 15 days. Hard money loan rates are typically higher than conforming loan rates, starting at 7.5%, and have shorter loan terms of one to three years.

Fix & Flip Hard Money Loan Rates & Terms

Hard money loans have high interest rates, but they offer shorter terms and can be used to finance renovations. Lender fees are taken directly out of the loan and closing costs are either paid out of pocket or taken directly out of the loan. When you consider the cost and fees along with the rates, it’s obvious that hard money loans are expensive.

Hard money loan rates and terms are:

• Term: One to three years
• Time to funding: 15 days
• Rates: 7.5% to 12%
• Lender fees: 1.5% to 3%
• Closing costs: 2% to 5%

With no prepayment penalty, you can reduce the overall financing costs by paying the loan back early. Monthly interest-only payments are made during the loan and the principal is repaid at the end of the loan term. Hard money loans generally finance 90% of a property’s loan-to-value (LTV) and 75% of a property’s after repair value (ARV).

If you want to find out how much a hard money loan will cost you, check out our free hard money loan calculator.

While the loan is costly, you’re not paying interest on a hard money loan for very long since you can generally flip a home in less than six months. To help speed up the process, hard money lenders such as LendingHome offer prequalification in as little as three minutes and funding within 15 days.

Fix & Flip Hard Money Loan Qualifications

Hard money loans often carry these minimum qualifications:

• Credit score: 620 or higher (check your credit score for free here)
• Debt-to-income ratio: 35% to 45%
• Experience: Two to three past rehab projects for DIY projects, or licensed contractor help for inexperienced fix-and-flippers

Hard money loans offer easier qualifications compared to other options. However, a credit score of 640 or above is preferred. Borrowers with better credit scores and a longer history of successful fix-and-flip projects are considered safer and likely qualify for lower rates and fees as well as higher borrowing limits.

Where to Find a Fix & Flip Hard Money Loan

Hard money loans are issued by hard money lenders. These lenders can either be found online or in person. Traditional hard money lenders are found offline through industry relationships. Online hard money lenders, on the other hand, conduct their business completely over the internet. With online lenders, prequalification takes less than a day and funding can be received in as little as 15 days.

For more information on the best local hard money lenders in your area, check out our hard money lender directory that offers a list of lenders in all 50 states.

LendingHome is an online hard money lender that offers competitive rates for prime borrowers, interest-only monthly payments, and no prepayment penalties. They can fund loans in as little as 15 days, and prequalification takes just a few minutes.

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2. Cash Out Refinance for Fix & Flip Investments

A fix-and-flip cash out refinance is a strategy where fix-and-flip investors refinance an existing property to finance the purchase of a new investment property. A cash out refinance helps fix-and-flip investors extract equity from an existing property by issuing a new loan and paying off the existing mortgage.

The new loan issued on a cash out refinance is considered a “first lien.” This means that any existing liens (such as the original mortgage) must be paid first before being able to use the balance of equity. The difference between the amount of the new loan and the amount of the old mortgage is the cash that fix-and-flip investors can use to finance other investments.

There are no restrictions on how fix-and-flip investors spend the cash received from a cash out refinance. Fix-and-flip investors can use a cash out refinance, also known as a “cash out refi,” on an owner-occupied home as well as a non-owner-occupied investment property (up to four units).

Visio Lending offers real estate investors a way to refinance an existing property or portfolio of properties. Their cash out refi offers range from 24-month bridge loans to 30-year rental loans with competitive rates for prime borrowers. You can prequalify online in just a few minutes.

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Fix & Flip Cash Out Refinance at a Glance

Who a Fix & Flip Cash Out Refinance Is Right For

Cash out refinances are used by real estate investors who already have an existing property with 30% to 40% equity and want to compete with all cash buyers without turning to hard money. A cash out refi can only finance up to 75% of the existing property’s loan-to-value (LTV) ratio.

Cash out refinances are best for the following types of investors:

• Fix-and-flip investors with an existing owner-occupied primary residence
• Fix-and-flip investors with an existing non-owner-occupied investment property
• Fix-and-flip investors with at least 30% to 40% of equity in an existing property

A cash out refi is perfect for portfolio investors who own at least one existing property with enough equity to execute a cash out refinance. These portfolio investors use a cash out refi as a down payment on a blanket mortgage or a portfolio loan. Blanket mortgages can finance four or more properties under a single loan and are perfect for investors with multiple houses.

Fix & Flip Cash Out Refinance Rates, Terms & Qualifications

Cash out refinancing provides funding for flipping homes and offers competitive rates and longer loan terms ranging from 15 to 30 years. Fix-and-flip cash out refinance qualifications are generally more stringent than hard money loan qualifications because the lender wants to make sure the borrower can afford a new, higher loan amount.

Fix-and-Flip Cash Out Refinance Rates & Terms

The interest rates on a cash out refi are usually lower than a traditional mortgage. This is because the borrower already has a track record of good payments. However, since a cash out refinance is more complicated than a regular bank loan, lenders charge higher fees.

The rates and terms on a cash out refinance are as follows:

• Term: 15 to 30 years
• Time to approval: 30 to 45 days
• Rates: 5.45% to 5.75%
• Loan origination fees: Up to 5%
• Closing costs: 2% to 5%

Lenders offer cash out refinances with 80% LTV on a one-unit property and 70% LTV on two- to four-unit properties. This means you’ll need 30% to 40% equity in an existing property. You might have to use a cash out refinance for a down payment and then use a hard money loan to cover the remainder. With 40% equity, you only have access to 15% of your available equity to draw from.

Since a cash out refinance is a first lien, borrowers are required to cover closing costs between 2% and 5% of the existing property’s fair market value (FMV). Closing costs are either drawn directly from the loan or paid out of pocket by the borrower. Once the loan is issued, the lump sum amount is used to pay off the existing loan and the remainder is wired directly to a borrower’s bank account.

Fix & Flip Cash Out Refinance Qualifications

The qualifications on a cash out refinance are more stringent than with other types of fix-and-flip loans. This is because a cash out refinance is usually issued by a traditional bank or mortgage lender rather than an online or hard money lender.

A fix-and-flip investor should expect the following cash out refinance qualifications:

• Credit score: 640 or higher (check your credit score for free here)
• Debt-to-income ratio: 45% or less
• Cash reserves: Zero to six months
• Debt service coverage ratio (DSCR): 1.25 (if refinancing an existing rental property)
• Personal tax returns: Two years

Finally, all fix-and-flip investors, whether they’re refinancing an investment property or their primary home, should have at least 30% to 40% equity in the existing property.

Where to Find a Fix & Flip Cash Out Refinance

You can find a cash out refinance at any Fannie Mae-approved mortgage lender. They can also be issued by lenders specifically catering to real estate investors. Lenders that focus on investors tend to have more flexibility, and their familiarity with the investing world allows them to get their clients funded more quickly than traditional mortgage companies.

For more information on cash out refinances, check out our in-depth guide on cash out refinancing.

Visio Lending offers real estate investors cash out refinance options that range from 24-month bridge loans to portfolio loans to 30-year rental loans. Rates are competitive for prime borrowers. You can get prequalified online in just a few minutes.

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3. Fix & Flip Home Equity Line of Credit

A home equity line of credit (HELOC) can be another source of fix-and-flip funding for investors. The HELOC works like a credit card. Fix-and-flip investors are issued a line of credit based on the value of their existing home and available equity, and can draw from that credit line over the HELOC term. Just like a credit card, interest rates are only charged on the amount borrowed until it is repaid.

Unlike a cash out refinance, a home equity line of credit (HELOC) can be both a first or second lien, meaning that it can be taken out in addition to an existing mortgage. A HELOC can only be issued on an owner-occupied primary residence. There are no restrictions on what a fix-and-flip investor does with the capital, but the HELOC is taken out on a primary residence, not an investment property.

If you’re shopping for a home equity line of credit, you can reach out to one lender at a time hoping you find a good deal. Or, you can visit an online marketplace, like LendingTree, and review offers from multiple lenders at once. Save time, shop smart, and find a HELOC that fits.

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Fix & Flip Home Equity Line of Credit at a Glance

Who Fix & Flip Home Equity Lines of Credit Are Right For

Home equity lines of credit (HELOCs) are only issued on an owner-occupied primary residence. HELOCs usually can’t be taken out on an investment property. Further, the combined loan-to-value ratio (CLTV) cannot exceed 85% of the home.

Once a home equity line of credit (HELOC) is issued, fix-and-flip investors can use it to finance any investment purchase. Investors will then use the cash from a HELOC to purchase and renovate an investment using all cash or as a down payment on a hard money loan.

The real value in a HELOC is in its credit structure. Since it’s not a loan, fix-and-flip investors who are approved for a home equity line of credit (HELOC) can take their time looking for an opportunity. Interest doesn’t start accruing until an actual draw is made. HELOCs allow fix-and-flip investors to set a maximum budget and wait for the right opportunity, such as a foreclosure property.

Therefore, HELOCs are best for the following investors:

• Fix-and-flip investors with an owner-occupied primary residence
• Fix-and-flip investors with more than 15% home equity
• Fix-and-flip investors without a specific project in mind

For more information on HELOC rates, terms, and if they’re right for you, check out our guide on home equity lines of credit.

Fix & Flip Home Equity Line of Credit Rates, Terms & Qualifications

A home equity line of credit offers competitive rates starting at 3.5% and are long term, from 25 to 30 years. The qualifications for this type of fix-and-flip funding tend to be standardized, a minimum FICO score of 640 is generally needed, and the HELOC can only be used on an owner-occupied property.

Fix & Flip Home Equity Line of Credit Rates & Terms

The overall term of a HELOC is broken down into two phases. The first five to 10 years is known as the draw period, while the following 20 years is known as the repayment period. During the draw period, borrowers are free to borrow up to their maximum line of credit and pay interest-only monthly payments. During the repayment period, fix-and-flip investors stop borrowing and start repaying the principal.

A home equity line of credit (HELOC) has rates and terms of:

• Term: 25 to 30 years
• Time to approval: 30 to 45 days
• Rates: 3.5% to 9.5%
• Loan origination fees: 2%
• Repayment: Monthly, interest-only for the first 5 to 10 years; interest and principle for the remaining 15 to 20 years

The maximum loan amount is equal to 85% of a property’s combined LTV, which means the first mortgage and second HELOC combined cannot exceed 85% of a property’s current fair market value. Since a HELOC is considered a second mortgage, borrowers aren’t required to pay closing costs.

Fix & Flip Home Equity Line of Credit Qualifications

A home equity line of credit (HELOC) has standard qualifications regardless of where you obtain it. A borrower needs to meet the minimum FICO score and debt-to-income ratio. The borrower will also need to show equity in their existing property.

Borrowers should expect to meet the following qualifications prior to applying for a HELOC:

• Credit score: 640 or higher (check your credit score for free here)
• Debt-to-income ratio: 45% or less
• Minimum equity: 30% in existing property

HELOCs are only allowed on an owner-occupied primary residence. However, lenders aren’t concerned with what an investor does with the money after funds are distributed. If you’re looking for a line of credit on your investment property instead of your primary residence, you can read about an investment property line of credit below.

Where to Find a Fix & Flip Home Equity Line of Credit

Investing in real estate requires having access to the right capital. For investors with equity in an existing primary residence, a HELOC can be a great choice. Home equity lines of credit (HELOC) are available through most national banks and mortgage lenders.

If you’re shopping for a home equity line of credit, you can reach out to one lender at a time or visit an online marketplace like LendingTree and review offers from multiple lenders at once. Save time, shop smart, and find a HELOC that fits.

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4. Fix & Flip Investment Property Line of Credit

An investment property line of credit (LOC) is a line of credit similar to a home equity line of credit (HELOC), only the equity is from investment properties. It works like a credit card where you only pay interest on the money that you use. This LOC is for short-term cash needs and can be used for both purchases and renovations of fix and flips.

An investment property LOC can only be drawn from non-owner-occupied properties. However, it’s possible to get either a single asset investment property LOC or a portfolio investment property line of credit. While you will need to outline how you will use the LOC in the application, you can usually use it for whatever you want once it’s funded.

CoreVest offers an investment property line of credit starting at $1 million for single assets or portfolios. Their lines of credit are up to 80% of a property’s cost with terms between 18 and 24 months. The line of credit offers experienced flippers with significant equity in an existing portfolio a high degree of flexibility and speed.

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Fix & Flip Investment Property Line of Credit at a Glance

Who Fix & Flip Investment Property Lines of Credit Are Right For

Investment property lines of credit are right for fix-and-flip investors who want a short-term loan in order to purchase or rehab a property and then flip it and pay off the line of credit. Long-term investors with substantial equity in their property and a high credit score who may be short on cash may also benefit from an investment property LOC.

An investment property line of credit (LOC) is right for the following investors:

• Fix-and-flip investors with at least 30% to 40% equity in an existing non-owner-occupied property
• Fix-and-flip investors with a portfolio of rental properties who want to purchase or renovate a fix and flip
• Fix-and-flip investors who want access to financing but might not have an immediate use for it

To find out more about an investment property line of credit and if it’s right for you, check out our in-depth guide on investment property lines of credit.

Fix & Flip Investment Property Line of Credit Rates, Terms & Qualifications

An investment property line of credit provides fix-and-flip funding to investors. These products’ rates are generally higher than HELOC rates because the loan is on an investment property and not a primary residence, and the bank looks at this as riskier. Terms are typically shorter and qualifications are based on the amount of equity in the property plus the borrower’s financial history, including the credit score.

Fix & Flip Investment Property Line of Credit Rates & Terms

The rates for an investment property line of credit are based on the borrower’s credit score and credit history as well as on the investment property itself. The terms are set by the bank offering the line of credit. The rates and terms vary from single asset to portfolio LOCs.

The single asset investment property line of credit rates and terms include:

• Term: 18 to 24 months
• Time to approval: Up to 30 days
• Rates: 6.99% and higher
• Loan origination fees: 1% to 2%
• Closing costs: 1 to 5%

There are sometimes annual service fees of around $75. Minimum lines of credit on single assets are as low as $25,000, while minimum lines of credit on a portfolio of properties are approximately $1 million. Investment property lines of credit are usually capped at 75% LTV or at 90% of cost.

Fix & Flip Investment Property Line of Credit Qualifications

An investment property line of credit for a single asset has certain qualifications that a borrower and their property must meet in order to be approved. A portfolio LOC has stricter qualifications and looks closely at the borrower’s overall financial standing. Generally, all LOCs require a certain amount of equity in the property.

Typical investment property lines of credit qualifications include:

• Credit score: 660 or higher (check your score for free here)
• Debt-to-income ratio: 45% or less
• Existing equity: 30% to 40%
• Type of property: A single-family home or a property with one to five or more units

Where to Find a Fix & Flip Investment Property Line of Credit

Investors can find a fix-and-flip investment property line of credit at their bank, credit union, or with an online lender. A portfolio LOC is a specialty loan product and isn’t usually offered by banks. Instead, only certain financial institutions offer investment property lines of credit for a portfolio.

CoreVest offers investment property LOCs for one or more assets. Their lines of credit start at $1,000,000 with competitive interest rates for prime borrowers. You can apply online and will be assigned a personal representative to work with you.

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5. Fix & Flip Bridge Loans

A fix-and-flip bridge loan is a temporary loan used to cover the time between two real estate transactions. It’s often used to purchase one property before selling another property. It allows you to purchase a fix-and-flip property without having a contingency to sell your other property first. Unlike a hard money loan, you can’t finance rehabs with fix-and-flip bridge loans.

Fix & Flip Bridge Loans at a Glance

Who Fix & Flip Bridge Loans Are Right For

A bridge loan can be right for a real estate investor who finds a great deal on a property that will no longer be available by the time they have the cash or financing in place to purchase it. Investors often use a bridge loan to purchase a property before refinancing it or flipping the property to pay off the bridge loan.

Fix & Flip Bridge Loan Rates, Terms & Qualifications

A bridge loan offers investors funding for flipping homes with higher rates starting at over 6% and terms of a few weeks to a year. Bridge loans generally have different qualifications based on the lender, and these vary because it’s a specialty loan product. Lenders base their approval decision on the strength of the investment and the borrower’s overall financial picture.

Fix & Flip Bridge Loan Rates & Terms

Bridge loans are short-term, temporary loan products that provide interim or quick financing for a certain window of time. They are specialty loan products used to bridge the gap when selling one property and buying another, and guidelines therefore vary widely. Interest rates are generally lower than hard money loans but higher than permanent bank loans.

Fix-and-flip bridge loans have the following rates and terms:

• Term: 12-month and 18-month loans
• Loan amount: $50,000 to $2.5 million
• Minimum property value: $75,000
• Rates: Starting at 7.99%
• LTV for purchase: Up to 85%
• LTV for refinance: Up to 70%
• LTV for cash out: Up to 65%
• Property types: Residential one to four units; condos; townhomes; five-unit or more apartments; mixed-use properties
• Occupancy: Non-owner occupied
• Minimum FICO: 600

Fix & Flip Bridge Loan Qualifications

The qualifications for a bridge loan vary due to being a specialty loan product. However, lenders generally look less at the borrower’s credit and financial history and more at the strength and profitability of the investment.

The qualifications of a bridge loan include:

• Investor’s financial profile: Must be able to pay two concurrent mortgages
• Minimum equity: 20%+ in existing property
• Exit strategy: The lender will require a detailed exit strategy for the project

Where to Find Fix & Flip Bridge Loans

Bridge loans are a specialty loan product and aren’t as popular as other private loans, so they aren’t offered at all banks or credit unions. Instead, look for private lenders who offer nontraditional loan programs. These programs are sometimes referred to as cross collateralized loans or blanket loans by lenders, so be sure to ask your lender if they offer any alternative bridge products.

A reputable provider of fix-and-flip bridge loans is RCN Capital. It’s a national, online hard money lender that offers competitive rates to prime borrowers. You can receive a bridge loan up to $2.5 million or more in as quickly as 10 days. Apply online in minutes.

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6. Permanent Bank Loan & Online Mortgage for Fix & Flip Funding

Permanent bank loans and online mortgages are characterized by 15- to 30-year terms and are used to purchase long-term, owner-occupied primary residences or non-owner-occupied investment properties in good condition. Therefore, permanent bank loans and online mortgages are not suitable for fix-and-flip investors purchasing distressed properties.

However, there are a few permanent bank loans and online mortgages that benefit longer-term rehabbers. The FHA 203(k) loan, for example, allows for the owner-occupied purchase and renovations of a primary residence. The Fannie Mae HomeStyle loan, in addition to financing the owner-occupied purchase and renovations of a primary residence, also finances the purchase and renovations of a one-unit investment property.

Fix & Flip Permanent Loan & Online Mortgages at a Glance

Who Fix & Flip Permanent Bank Loan & Online Mortgages Are Right For

Permanent bank loans and online mortgages are best used by long-term, buy-and-hold investors. However, fix-and-flippers might find them beneficial for a property that doesn’t need that much work or a property that they want to rehab, rent out, and then flip later on.

Further, most of these permanent bank loans and online mortgages can’t finance properties in poor condition, with the exception of Homestyle Renovation Loans and 203(k) loans. Still, these aren’t right for short-term fix-and-flippers.

Fix & Flip Permanent Loan & Online Mortgage Rates, Terms & Qualifications

Permanent loans and online mortgages are a conservative type of funding for flipping houses over a long period of time. They usually offer low rates starting at 4.6% and terms from 15 to 30 years. Their qualifications are based on the property and the borrower, and are stricter than hard money loan qualifications.

Fix & Flip Permanent Bank Loan & Online Mortgage Rates & Terms

A permanent investment property loan and online mortgage generally have a term of 15 to 30 years. The approval time and time to receive funding are usually 30 to 45 days, and the lender fees and interest rates are lower than some of the other fix-and-flip loans in this article.

Permanent bank loans and online mortgages often have the following rates and terms:

• Term: 15 to 30 years
• Time to funding: 30 to 45 days
• Rates: 5% to 7%
• Lender fees: 0% to 1%
• Closing costs: 2% to 5%
• Repayment: Monthly amortized payments

You can finance between 80% and 96.5% of a property’s purchase price, but the specific amount of financing depends on whether or not the lender is FHA-approved. FHA loans often require 3.5% as a down payment. Fannie Mae loans require up to 20% as a down payment. Permanent bank loans and online mortgages can only finance properties in good condition.

Fix & Flip Permanent Loan & Online Mortgage Qualifications

The qualifications for long-term permanent bank loans and online mortgages are standard in many cases due to being issued by FHA or Fannie Mae-approved lenders, but not always. They can also be nonconforming portfolio loans.

Specifically, permanent bank loans and online mortgages require the following:

• Credit score: 640 or higher (check your credit score for free here)
• Debt-to-income ratio: 45% or less

To verify income, lenders ask for proof of income or recent pay stubs, a list of debts, as well as two to six months’ of bank statements. Further, permanent bank loans and online mortgages can only finance a property in good condition, limiting the effectiveness of the fix-and-flip loan.

Where to Find Fix & Flip Permanent Bank Loan & Online Mortgages

There are many great long-term permanent mortgage providers. In fact, the U.S. Department of Housing has a list of both FHA-approved lenders and Fannie Mae-approved lenders. LendingTree is another option—it’s an online loan marketplace with one of the largest lender networks, so you can compare lender rates.

However, fix-and-flippers should consider LendingHome. They’re a national hard money lender that offers short-term rehab loans with interest-only payments. Rates are competitive for prime borrowers and prequalification takes as little as three minutes.

Visit LendingHome

More Funding for Flipping Options

We discussed the six main types of fix-and-flip loans. Let’s briefly examine some additional options of financing for flipping houses. These can be used in addition to fix-and-flip loans, or as an alternative to them. Things like cryptocurrency may be part of the future of fix-and-flip funding.

A few additional methods of financing for flipping houses include:

• Self-directed solo 401(k): This is a retirement incentive plan for self-employed individuals or small business owners without any full-time employees other than a spouse. You can invest in real estate with similar tax advantages to normal plans.
• Business credit card: A business credit card gives you a revolving line of credit based on your credit score and income. It typically has a high interest rate, and gives you 30 days to make a minimum payment or pay off the balance. Fix and flippers can use it to purchase building supplies and appliances.
• Real estate crowdfunding: This alternative funding source pools investors’ money together to fund projects or portfolios of projects. You can invest in the debt or equity and receive a proportionate stake in the project. Investors would invest in crowdfunding as a way to get involved with real estate without being hands-on.

You can use multiple sources of financing for flipping houses together. For example, a home improvement store credit card can be used with a small loan to fund the items needed to renovate a property, such as building materials and appliances. In some cases, you need to think creatively to get fix-and-flip projects financed.

Tips for Flip Funding

Now that we have gone through six common types of fix-and-flip loans, we’re going to see what the pros have to say about funding for flipping. They offer some helpful insights into funding for flipping that will help you when you start a house flipping business.

Here are five tips from the pros on financing for flipping houses:

Fix & Flip Loans Frequently Asked Questions (FAQs)

In this article, we have done our best to detail your options for finding the best fix-and-flip financing for your project. However, as with any type of financing, some questions are asked more frequently than others, and we have tried to address those here.

How much cash do you need to flip a house?

How much cash is required to flip a house depends on the type of financing, your credit score, personal financial statement, the price of the property and its after repair value (ARV), your fix-and-flip experience, and how much cash you have available. You will need money for the down payment, closing costs, and fees.

What is the 70 Rule in house flipping?

The 70 Rule, also known as the 70% Rule, is a term used by fix-and-flip investors to determine what to pay for an investment property for it to be profitable. The 70 Rule states that an investor should pay no more than 70% of the property’s after repair value (ARV) minus the repairs.

Do I need good credit to flip a house?

The credit score needed to flip a house depends on how you intend to fund your fix-and-flip project. If you’re paying all cash, your credit score will likely be irrelevant. If you need to finance buying and rehabbing the property, depending on the type of financing, credit scores can range from 500 to 600 and higher.

Bottom Line

Investors know that in order to make money flipping houses, they need the best fix-and-flip funding. Here we’ve reviewed six types of funding for rehabilitating and flipping houses. The best option is generally a hard money loan because it can close fast, offers lenient qualifications, and funds the acquisition and rehab of the fix-and-flip project.

For fix-and-flippers, we recommend checking out LendingHome. They’re a hard money lender that issues rehab loans up to 75% of a property’s after repair value (ARV). Rates are competitive for prime borrowers and monthly payments are interest-only. Prequalification takes a few minutes and funding can happen in as quickly as 15 days.

Visit LendingHome