Fix & Flip · 8 min read

The Complete Guide to Fix & Flip Financing in 2026

January 28, 2026

Fix and flip investing remains one of the most profitable strategies in real estate — but only if you have the right financing in place. Traditional banks are too slow and too rigid for the fast-moving world of property flipping. Here's everything you need to know about securing the right funding for your next project.

Why Traditional Banks Don't Work for Flips

Banks typically take 30-45 days to close a loan, require extensive documentation, and won't lend on properties that need significant repairs. In the fix and flip world, you need to close in days, not weeks, and the whole point is buying properties that need work.

How Fix & Flip Financing Works

Private lenders (also called hard money lenders) provide short-term loans specifically designed for renovation projects. These loans typically cover the purchase price and a portion of the renovation costs. The loan term is usually 12-18 months, giving you time to complete the renovation and sell the property.

Understanding Draw Schedules

Renovation funds aren't given to you upfront. Instead, they're released in "draws" as work is completed. You complete a phase of the renovation, the lender sends an inspector to verify the work, and then the funds for that phase are released. This protects both you and the lender.

Key Numbers to Know

Most fix and flip lenders will finance up to 90% of the purchase price and 100% of the renovation costs, with a maximum of 70-75% of the After Repair Value (ARV). Interest rates typically range from 9-12%, with 1-2 points in origination fees. While these rates are higher than conventional mortgages, remember — this is short-term capital for a high-return project.

Tips for a Successful Flip

First, know your numbers cold before you make an offer. Use the 70% rule as a starting point: your maximum purchase price should be 70% of the ARV minus renovation costs. Second, have a reliable contractor lined up before you close. Third, build a relationship with your lender — repeat borrowers often get better rates and faster closings.

Getting Started

If you're ready to start or scale your fix and flip business, having a reliable lending partner is essential. At Lulu Capital, we understand the urgency of the flip business and can fund your deals quickly so you never miss an opportunity.