If you’re looking to flip houses, a Flip-and-Fix loan might be the perfect loan for you. While there is good money to be made in a house flip, it can be costly and you should be aware of all of your financial options. Conventional mortgages were designed for a traditional residential home, not necessarily a flip. So what is a fix-and-flip, how does it work and would it work for you? We explain everything you need to know about a fix-and-flip loan and more. 

What is a Fix and Flip Loan?

It can be confusing to know what all the different types of loans are, how they work, and if its the right fit for you. A fix-and-flip loan isn’t one loan in particular but a small subset of loan products that are typically short-term financing loans for real estate investors use to buy and renovate a property in order to resell it for a profit. 


These are typically small business loans and are used to purchase residential real estate, and finance renovations and improvements. Fix and flip loans are designed for renovating and selling a property in a short time period. They can also be used to cover expenses associated with listing and selling the property. Some of these financing options are term loans while others are revolving. Fix and flip loans are typically only for people looking to finance a fixer-upper, not your primary residential home. Some markets such as Houston are rapidly growing and have lots of opportunities for flipping.  As a Houston-based fix-and-flip lender, LJC Financial provides financing options for investors looking to buy and renovate residential properties or multi-family homes that are in foreclosure or at auction.


How does a Fix and Flip Loan Work?

Fix and Flip loans can be many different categories of loans. They can look like a term loan or a line of credit depending on your type of needs. 


One of the most common types of fix-and-flip loans is a hard money loan. Hard Money loans and non-bank loans come from an online or private lender. Hard money lenders are typically more flexible than traditional bank loans and can typically provide flip and fix loans quicker than a bank would be able to. 


What are the advantages of Fix and Flip Loans?

Flexibility– Fix and flip loans for new investors are great because of their flexibility. Flip loans from non-bank lenders are more flexible with the terms of the loans, and there are usually fewer stipulations attached.  


Fast Funding– If you were to get a loan from a credit union or bank, you would have to follow strict regulations, processes, and rules. It also typically takes a long time before the loan is approved.  


Less Risk– A hard money fix and flip loan is usually based on the property for which you want to flip not on your personal credit and property. You have less to lose in a hard money fix and flip loan as opposed to a traditional bank or mortgage loan where you could potentially lose your home. 


If you think a fix-and-flip loan is right for you, LJC Financial has you covered every step of the way. If you’re looking for a reliable and trustworthy lender for your next fix-and-flip project in Houston or the surrounding areas, look no further than LJC Financial. Contact us today to learn more about our fix-and-flip lending options and how we can help you achieve success in your real estate investment ventures