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Real Estate Agent's Guide to Fix-and-Flip Loans
By Jason Taken · Founder, Jaken Finance Group
A real estate agent's guide to fix-and-flip loans: serve flipper clients, move as-is listings, and close renovation deals conventional can't touch.
You’ve got a listing that won’t sell and a buyer who wants it — and the deal keeps dying anyway. The property is a gutted three-bed with no working kitchen, priced to move. A flipper client of yours loves it, has cash for the down payment, and is ready to write. Then his lender comes back with a no: the house won’t pass a conventional appraisal in its current condition, and no bank is financing a renovation project in your contract’s timeline. Two clients, one great deal, and it’s about to collapse over financing.
That deal isn’t dead — it was never a conventional deal. Fix-and-flip loans are how it closes, on both sides. This guide explains what flip financing does from an agent’s seat, which of your buyers and listings it rescues, and how connecting your client to the right lender protects the transaction. It builds on our hard money guide for agents and links to current terms on our fix-and-flip requirements page.
What a fix-and-flip loan is — from an agent’s perspective
You don’t underwrite loans. You need to know what a fix-and-flip loan does for a deal: it funds both the purchase and the renovation of a property your client intends to buy, fix, and resell for profit — the kind of property a conventional lender won’t finance because it isn’t finished.
It’s a specific, purpose-built flavor of hard money, and everything about it is engineered around one question your conventional deals can’t survive: how do you lend against a house that isn’t done yet? The answers are what make it close your deals:
- It funds purchase + rehab — one loan covers the acquisition and the renovation budget.
- It’s sized on the finished value — underwritten on what the property is worth after repairs, not its gutted current state.
- Rehab releases in draws — the renovation money funds in stages as the work is done and inspected.
- It closes fast — 7–10 business days, often inside your inspection period.
- It ignores DTI and works for LLC buyers — the investor profile, not the conventional-borrower profile.
Think of it as the tool for every deal where the property condition — not your buyer’s ability to pay — is what kills a conventional loan.
The buyers and listings that need a fix-and-flip loan
Sort the deals that fall apart, and the listings that sit, by why. These aren’t lost — they’re flip deals:
| The situation… | Fix-and-flip answer |
|---|---|
| Your flipper client wants a gutted / distressed property | Funded on after-repair value, not condition |
| Your as-is listing won’t pass a conventional appraisal | Investor buyers finance it as a flip |
| Buyer needs to close in 10–14 days | 7–10 business day close beats the clock |
| Buyer is purchasing in an LLC | Standard for flip loans |
| Self-employed investor stalls in conventional underwriting | Underwritten on the deal, not DTI |
| A renovation project no bank will finance | Rehab draws are the core feature |
If the buyer and the price are solid and only the property condition or the timeline is the obstacle, that’s a flip deal — and a commission you can still earn on one or both sides. Send the scenario over and get a same-day read on whether it closes.
The numbers that decide the deal — so you can set expectations
You won’t underwrite these, but knowing two numbers lets you write a realistic offer and coach your buyer.
After-Repair Value (ARV) is what the property will be worth once the rehab is done. The loan is capped at a percentage of ARV — commonly 70–75% — so there’s equity cushion at resale.
Loan-to-Cost (LTC) is how much of the total project (purchase + rehab) the loan funds — often 85–90% for experienced flippers, less for first-timers.
The practical takeaway: your buyer needs cash for the down-payment gap, closing costs, and a reserve — so structure the offer and expectations accordingly. Point them at the fix-and-flip calculator and they’ll see their real numbers before you finalize the offer.
Rates, terms, and timelines to tell your buyer
You’re not quoting these, but they help you write the contract and set expectations:
- Close: 7–10 business days on a complete file — write your financing timeline accordingly.
- Rate: roughly 8.99%–13.5% interest-only — higher than conventional, but short-term.
- Term: 6–18 months, interest-only — built to renovate and resell.
- Draws: rehab money releases in stages after inspection — not at closing.
The framing your buyer needs: on a flip, the enemy isn’t the rate — it’s time. Every extra month the project sits adds carry and eats the margin. A realistic scope and a contractor who can hit milestones matter more to the profit than shaving the rate.
A worked example you can walk a client through
Your experienced flipper is buying that gutted three-bed at $250,000, with a $60,000 rehab and a $360,000 after-repair value.
- Total project cost: $310,000
- Loan (lower of 75% ARV / 90% LTC): ~$270,000
- Buyer brings: ~$40,000 + closing costs + reserve
- Close: ~9 business days — inside your contract timeline
- Exit: resell at $360,000, or refinance into a DSCR loan and rent it
- Your outcome: the deal closes, you earn the commission, and you’re the agent who made it work
How the deal closes, step by step
Knowing the sequence lets you write the contract timeline correctly and reassure a listing agent your buyer will perform:
| Day | What happens |
|---|---|
| 0 | Buyer submits the property, contract, comps, scope of work, and proof of funds |
| 1–2 | Lender sets the loan amount and issues a term sheet |
| 2–5 | Light valuation, title, and entity docs ordered |
| 6–9 | Conditions cleared; closing scheduled |
| 7–10 | Loan funds; the purchase closes |
| After | Rehab funds release in draws after inspection |
The two things that slow this down are a vague scope and weak comps — both on the buyer’s side. Coach your buyer to bring a real scope and solid comps and the deal closes on time.
What your buyer will ask you — and how to answer
“Can I really get most of the cost financed?” Often — up to a high share of purchase and rehab, capped by the after-repair value. Plan on bringing the down-payment gap, closing costs, and a reserve.
“I’ve never flipped — am I out?” No, but you’ll bring more cash and use a licensed contractor with a conservative budget. A good deal with a credible plan gets approved.
“When do I get the rehab money?” In draws, after inspection at each stage — not at closing. Budget to float your contractors between draws.
“What if it doesn’t sell?” Refinance into a DSCR loan and rent it, or take a short extension. Two exits make a stronger deal.
“Will it close before my contract expires?” Yes on a complete file — often faster than a conventional loan. Get your details in early.
A second scenario: for the listing agent
Fix-and-flip financing isn’t only a buyer’s-agent tool — it’s how you sell a hard listing. When you list a distressed, as-is, or dated property, conventionally-financed buyers can’t touch it, so your pool shrinks to cash investors and the offers come in low.
- The move: market the property as a strong fix-and-flip candidate, with a lender ready to pre-qualify investor buyers
- The effect: your buyer pool widens to the exact investors who want a project — more offers, less time on market, a better price for your seller
- Your outcome: a listing that would have languished sells, and you look like the agent who knew how to position it
Knowing this financing exists turns a problem listing into a magnet for the investors who can actually close.
Fix-and-flip vs. hard money vs. conventional: a cheat sheet
| Fix-and-flip | Hard money (broad) | Conventional | |
|---|---|---|---|
| Job | Buy + renovate + resell | Any fast, as-is, asset-based deal | Move-in-ready purchase |
| Funds rehab in draws | Yes | Sometimes | No |
| Property condition | Distressed OK | Distressed OK | Move-in ready only |
| Close speed | 7–10 business days | 7–10 business days | 30–45 days |
| Buyer’s income | Doesn’t gate the deal | Doesn’t gate the deal | Gates the deal |
The pattern: the flip loan buys and renovates; a DSCR loan holds if the buyer keeps it. That’s one investor relationship with two closings — and both can be yours.
Your move: keep the deal alive
Your job isn’t to underwrite the loan — it’s to make sure the deal you assembled actually closes. That means connecting your client to a lender who can fund the purchase and rehab on your contract’s timeline. The cleanest path is to send the scenario over: the property, the numbers, and the timeline. You get a fast read, and your buyer gets a real path. For flip-specific deals you can also use our flip intake.
On the compliance question: recommending a lender is routine, and fix-and-flip loans on investment property are business-purpose loans, a different category than consumer mortgages. Keep it about serving the client, and confirm anything involving compensation with your broker and compliance. For a standing financing partner across your investor business, our referral-partner program and broker relationship are built for it.
This guide is part of our complete financing playbook for real estate agents — how to save the deals that die on financing.
The bottom line
Fix-and-flip isn’t a loan you have to learn to originate — it’s a deal-saving and listing-selling tool you learn to recognize. The gutted house, the flipper client, the as-is listing no bank will finance: every one is a transaction you can still close instead of a commission you watch disappear. Learn the two numbers, respect the draw schedule, set your buyer’s expectations, and connect them to a lender who can fund it fast.
That distressed three-bed is going to close for somebody’s client. The only question is whether it’s yours — on either side. Send the scenario over and find out today.