Question 1

What is a fix-and-flip loan and how does it work?

Accepted Answer

Fix-and-flip loans are short-term financing products designed specifically for investors purchasing and renovating properties for resale. Unlike traditional mortgages that only cover acquisition costs, these loans provide both purchase financing (up to 95% loan-to-cost) and renovation funding (up to 100% of rehab costs) in a single package. Loan terms typically range from 6-24 months, giving you time to complete renovations and execute your exit strategy. Experienced investors may qualify for more favorable terms or higher leverage, as your track record in completing successful renovation projects is often considered.

Question 2

How quickly can I close on a loan like this?

Accepted Answer

Truehold Financial can close fix-and-flip loans in as few as 10 days for straightforward transactions. This speed advantage allows you to compete effectively with cash buyers and move quickly on time-sensitive opportunities in competitive markets.

Question 3

Do I need to provide W-2s or tax returns for this type of financing?

Accepted Answer

No. Fix-and-flip loans focus on the property's potential value after repairs (ARV) and your renovation plan rather than personal income verification. You won't need W-2s, extensive tax returns, or employment verification. The approval process evaluates the property's potential and your basic creditworthiness, as well as your experience in flipping properties.

Question 4

What properties qualify for fix-and-flip financing?

Accepted Answer

Fix-and-flip loans are available for single-family homes, condominiums, townhomes, and 2-4 unit properties that need renovation. The property must be non-owner occupied and purchased with clear renovation and resale intent. Properties should have strong after-repair value potential in markets with solid buyer demand.

Question 5

What's the difference between these loans and DSCR loans?

Accepted Answer

Fix-and-flip loans are designed for short-term renovation projects where you plan to sell the property after improvements. DSCR loans are for rental properties you plan to hold long-term, qualifying based on rental income. If you're buying a property to renovate and flip, it's typically recommended to use fix-and-flip financing. If you're buying or refinancing a rental property to hold in your portfolio, DSCR loans could be a better option.

Question 6

How can I apply for a fix-and-flip loan with Truehold?

Accepted Answer

Start by contacting Truehold Financial with details about your renovation project—the property address, purchase price, planned improvements, and estimated after-repair value. Our team will review your project scope and help determine your funding capacity. The application process is streamlined compared to traditional financing, requiring minimal documentation and no W-2s or tax return analysis. Once approved, we can fund your project in as few as 10 days for straightforward deals, giving you the speed needed to secure properties in competitive markets.

Question 7

Can I use a DSCR loan to take out a fix-and-flip loan?

Accepted Answer

Yes. If you originally renovated a property with the intent to sell but later decided to rent it out due to better market opportunities, you can utilize a DSCR loan to take out a fix-and-flip.

Question 8

Can I take cash out of one property to buy another?

Accepted Answer

Yes, with up to 80% financing you can take cash out of one investment property to use as a downpayment for another purchase and finance the new purchase as well.

Question 9

Do I need a good credit score for a Fix-and-Flip loan?

Accepted Answer

You need a 620 minimum credit score to qualify for a Fix-and-flip Loan.

Fix-and-Flip Loans