How to Finance a Fix-and-Flip Property: Complete Guide for 2026

Fix-and-flip investing — buying distressed properties, renovating them, and selling for a profit — has a very different financing profile than buy-and-hold investing. The speed, short hold period, and distressed property condition that create profit opportunity also require specialized financing that traditional mortgages cannot provide.

Why Traditional Mortgages Do Not Work for Flips

Conventional and FHA loans require properties to be in habitable condition, take 30 to 45 days to close, and are structured for long-term holds. Flips need fast closings, financing that works on distressed properties, and short terms aligned with the renovation-and-sale timeline. Hard money and bridge loans are built specifically for this.

Hard Money Loans

Hard money lenders are private lenders or funds that originate short-term loans based primarily on asset value rather than borrower income. Typical terms: 6 to 18 month duration, rates ranging from 9 to 13%, origination fees of 1 to 3 points, and loan amounts up to 70 to 80% of After Repair Value (ARV).

ARV — After Repair Value — is the projected value of the property once renovations are complete. Hard money lenders lend against what the property will be worth, not what it is worth today in distressed condition.

What Hard Money Lenders Evaluate

Experience level — first-time flippers face more scrutiny and often lower LTV. Quality of the scope of work and renovation budget. Exit strategy — is the sale plan realistic given market comps? ARV justification through comparable sold properties.

Draw-Based Renovation Funding

Construction funds are typically held in reserve and disbursed in draws as work is completed and inspected. Understand the draw process before closing — it affects your cash flow during the renovation.

Transitioning from Flip to DSCR

If you decide to hold a completed flip as a rental instead of selling, a DSCR refinance at stabilized value is the standard exit from hard money into long-term financing.

At East Coast Mortgage, we connect investors with hard money and bridge lending options for fix-and-flip projects. Submit your scenario and we will match your project to the right program.