How to get a loan to flip a house: what to expect on your first one

If you’re planning your first flip, the money is probably the part that feels most uncertain. Will anyone lend to someone without a track record? How much do you need to bring? What happens after you apply?

The good news is that first-time flippers get funded all the time. Fix and flip lenders care more about the deal than about your résumé, and most of what they ask for is stuff you can prepare before you make an offer. Here’s what to expect.

The kind of loan you’ll be getting

Most flips are funded with a fix and flip loan from a hard money or private lender, not a bank. Banks are slow and don’t like lending on houses that need work. Flip lenders specialize in exactly that.

A fix and flip loan is short (usually 6 to 18 months), often interest-only, and costs more than a regular mortgage. In exchange it closes quickly, covers part of the purchase and the renovation, and is sized to what the house will be worth when it’s done. You can read more about how they work on our fix and flip loans page, or see how it compares to other options in types of loans for flipping houses.

What lenders look at on a first flip

The deal comes first

The three numbers that matter most are the purchase price, the rehab budget and the after repair value (ARV), meaning what the house should sell for when the work is done. Lenders want to see enough room between your all-in cost and the ARV to cover closing costs, interest and a profit, with some cushion for surprises.

A deal with a healthy spread can get funded even if you’re new. A thin deal is hard to fund no matter how experienced you are.

Experience shapes the terms, not the answer

Your track record usually changes how much a lender will lend and at what price, rather than whether they’ll lend at all. An investor with several recent flips might get 90% of the purchase price financed. A first-timer might get closer to 80–85%, and pay a bit more in points or interest.

If you have relevant experience that isn’t flipping (you’re a contractor, you’ve renovated your own homes, you manage rentals), say so. It can count for something.

Partnering helps. On a first deal, teaming up with an experienced investor, or bringing in a contractor with a strong history, can get you better terms. Some lenders will look at the partner’s track record alongside yours.

Credit matters, but less than you’d think

Many flip lenders look for a score in the 620s or higher. Like experience, your score tends to shape leverage and pricing more than it decides yes or no. Recent serious problems, like a foreclosure or bankruptcy, are harder to work around and worth mentioning up front.

You’ll usually borrow through an LLC

Most investor loans are made to a business entity rather than to you personally. If you don’t have one yet, that’s normal. You can form an LLC before closing, and the lender will tell you what documents they need. Expect to sign a personal guarantee either way.

Your exit plan

Lenders want to know how you’ll pay them back. For most flips the answer is simple: sell. If you might keep the house as a rental instead, tell the lender. Refinancing into a long-term rental loan is a common plan B, and some lenders like seeing that you have one.

How much cash you’ll actually need

This is where first-timers most often get caught off guard. A flip loan rarely covers everything, so you need cash for:

• The down payment. Whatever share of the purchase price the loan doesn’t cover.
• Closing costs. Points, lender fees, title, escrow and any transfer taxes. (See what closing costs to expect on a fix and flip.)
• Interest payments. Monthly payments while you own the house, unless the lender builds an interest reserve into the loan.
• A contingency. Rehab money is usually capped at your approved budget. If the job runs over, the difference comes out of your pocket.

Here’s a rough example. You’re buying a $250,000 house with a $60,000 rehab, and the lender finances 85% of the purchase and all of the rehab:

Down payment (15% of purchase)	$37,500
Buy-side closing costs	~$11,700
Six months of interest	~$13,500
10% rehab contingency	$6,000
Cash to have available	~$68,700

That’s more than “15% down” suggests. You won’t spend all of it on day one, but it needs to be available. Lenders often ask to see bank statements showing you have it.

The same deal with an experienced borrower at 90% financing would need $12,500 less up front, which is one reason experience is worth building.

When you go through our application, it shows a rough estimate of the loan and the cash you’d bring, based on your numbers, before you send anything.

What about flipping with no money?

You’ll see plenty of claims online about flipping houses with no money down. In practice, nearly every lender expects you to have some cash in the deal. They want you to have something at stake too.

If you don’t have the cash yet, the realistic routes are partnering with someone who does, raising money from private investors you know, or pulling equity from a property you already own (see cash-out loans). Grants for flipping houses generally don’t exist. Grant programs for housing are usually aimed at owner-occupants, not investors.

What to gather before you apply

Having these ready makes everything faster, and makes you look like someone who’s done this before:

• Photo ID for everyone who’ll be on the loan
• Entity documents: articles of organization, operating agreement and EIN (or a plan to form the LLC)
• The purchase contract, if you have one
• A scope of work and rehab budget, broken down by line item. A contractor’s bid is even better.
• Comps that support your ARV: recent nearby sales of similar, renovated houses
• Recent bank statements showing your down payment and reserves
• Any experience, even informal: past renovations, rentals or construction work
• Your contractor’s details, including license and insurance if your area requires them

How the process works

1. Talk to lenders before you’re under contract. Getting a sense of what you qualify for lets you make offers with confidence, and some sellers want proof that your financing is real.
2. Submit the deal. Once you have an accepted offer, send the lender the contract, your budget and your numbers.
3. Get a term sheet. The lender tells you the loan amount, rate, points, fees and term. Compare the total cost over your expected hold, not just the rate.
4. Valuation and title. The lender orders an appraisal or broker’s opinion of value, often including the ARV, and a title company checks the property’s ownership history.
5. Underwriting and closing. The lender reviews everything and you close, often within one to three weeks of going under contract.
6. Draws during the rehab. Rehab money is usually held back and released in stages as an inspector confirms the work is done.

Why a lender who knows your market matters on a first flip

When you don’t have a track record, the deal has to do more of the talking. A lender who regularly funds flips where you’re buying can see things in your deal that a distant lender can’t:

• Whether your ARV is realistic for that neighborhood, based on deals they’ve funded nearby, rather than a cautious guess that cuts your loan amount.
• Whether your budget fits the house. They’ve seen plenty of rehabs on the same kind of housing stock and can tell when a number looks light.
• Whether your timeline is realistic, given local permit times and how quickly houses are selling.

For an experienced flipper, a lender’s local knowledge is a convenience. For a first-timer, it can be the difference between a lender who sees a promising deal and one who just sees someone without experience. And a lender who gets your first flip right is often the lender who funds your next one.

When you’re ready, the application takes a few minutes. It explains why lenders ask each question, shows a rough estimate of what you’d bring, and we’ll connect you with a lender who funds flips in your area.