Master Fix-and-Flip Financing: Hard Money Guide for 2026

Fix-and-flip investing rewards operators who move fast on distressed inventory, control rehab spend, and exit before carry erodes margin. Hard money is the default acquisition-and-rehab tool because banks will not underwrite gut jobs on a 10-day auction timeline.

This 2026 master guide walks the full financing arc — from deal math through draw releases and sale payoff — with links to our fix and flip calculator, scope-of-work guide, and funded case studies.

The fix-and-flip financing stack

Layer	What it funds	Typical product
Acquisition	Purchase price + closing	Hard money (LTC-based)
Rehab	Line-item renovation	Draw holdback in same loan
Carry	Interest-only payments	Built into pro forma
Exit	Sale or refi payoff	Retail sale or DSCR refi

Most operators run one hard money fix-and-flip loan covering purchase + rehab. Bridge or gap financing enters only when you need a second lien or short hold between acquisition and permanent debt.

2026 leverage and rate benchmarks

Qualified investor files in 2026 typically see:

Metric	Typical range
LTC (loan-to-cost)	85%–90% purchase + rehab
ARV cap	70%–75% of after-repair value
Interest rate	9%–13% interest-only
Term	6–12 months (extensions available)
Points	1.5–3 origination
Close	7–14 business days on complete files

These bands are not universal — heavy cosmetic vs structural scope, rural comps, and first-deal experience can shift caps. Model every bid in the fix and flip calculator before you write an LOI.

For product-level detail, see what is a hard money loan and fix and flip loans explained.

Step 1: Underwrite the deal like a lender

Lenders weight four inputs:

1. ARV — sold comps within 0.5–1 mile, adjusted for size/condition
2. Rehab budget — line-item scope tied to contractor bids
3. LTC math — total cost vs ARV cap (both must work)
4. Exit — realistic DOM, sale costs (7%–9%), backup refi path

Use our SOW guide to format scope for faster approval. Proof of execution: Fountain Square Indianapolis case study.

Step 2: Compare lender offers

Do not shop on rate alone. Evaluate the full term sheet:

Factor	Why it matters
LTC vs ARV cap	Lower of the two limits your check size
Draw schedule	Milestone vs percentage — affects cash flow
Extension policy	Cost and notice if project slips
Prepayment	Penalty-free payoff at sale is ideal
In-house processing	Faster conditions clearance

Read checklist for evaluating hard money proposals and red flags to avoid. Compare execution in Jaken vs Kiavi fix-and-flip.

Step 3: Submit a complete file

A strong application shortens approval. Gather:

• Purchase contract or LOI
• Comp pack (sold + active) supporting ARV
• Line-item scope with contractor quote
• Entity docs (LLC operating agreement, EIN)
• Bank statements showing liquidity for down payment + carry
• Track record summary (prior flips, GC relationships)

Walk the timeline in hard money loan application process and approval criteria.

Step 4: Manage draws and budget

After close, rehab funds release on inspection-approved draws — not upfront lump sums. Best practices:

• Stick to the approved scope; change orders need lender sign-off
• Order long-lead items early (windows, cabinets, HVAC)
• Document every draw with photos and invoices
• Track budget vs actual weekly

See draw process guide for milestone expectations.

Step 5: Execute exit and payoff

Your hard money note matures on a clock. Plan exit before you close:

Exit	When it fits
Retail sale	ARV comps support list price within 60–90 DOM
DSCR refi	BRRRR pivot — property leased at stabilization
Bridge extension	Market slow but deal still profitable
Wholesale assignment	Spread too thin for retail — rare but valid

Avoid common hard money mistakes — especially underestimating carry and sale friction.

Who this guide is for

• New investors — start at solutions for new investors and download the fix-and-flip financing ebook
• Experienced operators — high-volume solutions and Investor Pulse for market context
• Regional focus — Chicago flip market mid-year, Greenville economics, top 10 flip cities 2026

Next steps

1. Pre-qualify — 24-hour response on complete files
2. Run the deal in the fix and flip calculator
3. Review loan process and FAQs

Pre-Qualify for Fix-and-Flip Financing · What is a hard money loan · (833) 264-7776

Rates, terms and conditions offered only to qualified borrowers. Jaken Finance Group only finances non-owner occupied investment properties.