What Lenders Look For in a Fix and Flip Loan Request

Fix and flip lenders move quickly when a request is complete and slowly when it isn't. Most of the back-and-forth that delays a closing comes down to five things: the purchase, the budget, the after-repair value, the borrower, and the exit. Here's what lenders look for in each, and how to present it.

1. The purchase

Lenders want to know what you're buying and on what terms.

• Purchase contract: price, closing date, and any assignment fee if you're buying from a wholesaler.
• Property details: address, property type, unit count, square footage, and current condition.
• Photos: interior and exterior, especially anything the renovation will fix.

Why it matters: fix and flip loans are typically sized as a percentage of the purchase price, the renovation budget, and the after-repair value. A clean contract is the starting point for all three.

2. The scope of work and budget

This is the document that separates a credible request from a guess. A good scope of work is:

• Line-itemed, by room or trade: roof, HVAC, kitchen, baths, flooring, paint, and so on.
• Priced realistically, ideally backed by contractor bids.
• Tied to the ARV. The finishes in the budget should match the comparable sales you're relying on.
• Padded. A contingency line for surprises shows you've done this before.

Most lenders fund renovation in draws: you complete work, an inspector verifies it, and funds are released. Your budget becomes the draw schedule, so a vague budget turns into slow draws later.

3. The after-repair value (ARV)

The ARV is what the property should be worth once renovated. The lender will order its own valuation, but your supporting comps speed things up:

• Recent sales of renovated homes nearby, similar in size, age, and bed and bath count.
• Adjustments you've made for differences such as garage, lot size, or finishes.
• Anything that could pull value down, like a busy road or a nearby commercial use.

An optimistic ARV is the most common reason a loan comes in smaller than expected.

4. You, the borrower

Fix and flip loans are asset-based, but lenders still underwrite the sponsor.

• Experience: a list of past projects with addresses, purchase and sale dates, and prices. Many lenders price and size loans by experience tier, so document every deal.
• Credit: personal credit is still reviewed and can affect terms.
• Liquidity: proof of funds for the down payment, closing costs, carrying costs, and your share of the renovation.
• Entity: most lenders lend to an LLC with a personal guarantee. Have your formation documents ready.
• Team: if you're newer, a licensed general contractor with a track record helps.

5. The exit

Every short-term loan needs an answer to "how does this get paid off?"

• Sell: show the timeline, your list price assumption, and the comps behind it.
• Refinance and hold: show the expected rent and how a long-term loan would work. We walk through that path in The BRRRR Refinance.

Build a timeline with room to spare. Renovations and sales both run long, and extension fees add up.

A simple deal summary

Before you send anything, put the whole deal on one page:

• Address, property type, and condition
• Purchase price and closing date
• Renovation budget (total, with the line-item scope attached)
• After-repair value, with three to five comps
• Loan amount you're requesting
• Your cash in the deal
• Exit plan and timeline
• Your experience (number of completed projects)

A one-page summary like this lets a lender, or a broker comparing lenders for you, give a real answer quickly. If you're still weighing loan types, see Hard Money vs. Bank Loans.

This article is general education, not an offer to lend or a quote. Example figures are illustrations only. Rates, terms, and approval are set by each lender and depend on the property, the borrower, and market conditions.