Understanding Fix&Flip Loans

Fix&Flip the Apex Way


Apex Capital Solutions fix and flip loan programs are tailored to provide real estate investors with quick access to funding. Like all our direct private money lending programs we ensure a hassle free and reliable loan process.

​Fix and Flip loans are acquired by real estate investors to purchase a cheap or rundown house and fix it up to sell it again for a profit. House flipping investors interested in renovation buy low and sell high, on a fast and furious timeline and budget.

​Throughout the underwriting stage of the fix and flip loan process, Apex Capital helps investors borrow up to 90% of the purchase price, 100% of the rehab costs, and 85% ARV with experienced real estate investors. Our average closing time for the underwriting stage is an average of 14-18 days.

​To acquire a Fix and Flip Loan, an investor must prove that the subject property is profitable. Investors with a house flipping business plan may opt for these types of loans because they require less underwriting than traditional loans. Generally, there is no penalty for paying off a Fix and Flip Loan early, so investors can move on to other dreams and other properties in which to invest.

       What are Fix&Flip loans?
  • Fix&Flip loans are short-term loans that investors can use to cover the cost of purchasing a property as well as the cost of repairs and renovations. These types of loans are like bridge loans generally used in the short-term until a more permanent financing solution is put in place.

    These short-term loans, are a lot different than a regular mortgage loan – it’s designed to help the investor cover the upfront costs of buying and renovating a property. These improvements range from minor renovations to a complete reconstruction of an existing property.

    One of the biggest key differences of the fix and flip loan is the use of collateral. Lenders generally consider the property itself as collateral and don’t spend a lot of time looking at the borrower’s creditworthiness to loan the funds. All the value is in the property itself.

    Fix and flip loans are very short term. Most range from as short as six months up to three years. Flippers who intend to use these loans usually intend to pay off the loan with the profits from the sale of the property. The sooner they can improve the property and sell it, the sooner they can pay off the loan.

Advantages of a Fix&Flip loan

The demand for fix-and-flip loans generally stems from capital inefficiencies in the current lending marketplace. These relatively short-term loans create opportunities for investments that potentially provide attractive yields for investors. In addition to this, fix-and-flip loans have other benefits:

Comprehensiveness: House-flipping loans include funds for the purchase price of the investment property and for the anticipated repairs and related expenses. This is a far more streamlined arrangement than having to take out separate loans for the purchase of the property and for improvement projects.
Speed: The loan process can be completed in under a week, especially if borrowers have all the documentation ready and know what they need to close on the property. This helps house flippers quickly entice sellers with an offer and start remodeling projects quickly instead of having to wait through lengthy approval periods and face competition from traditional buyers.
Cash Flow: Real estate investors who are flipping multiple properties over the course of a year or who manage several different types of real estate investing rely on ample cash flow to make repairs, pay property management companies, and more. Even house flippers with potential access to their own funds to make a cash offer on a house or pay for improvements themselves need that cash to remain liquid for other projects. A house-flipping loan allows established or profitable house-flipping entities to acquire new properties without tying down their own assets.

       How to get a Fix&Flip loan

Through Apex Capital Solutions, the process of obtaining a fix and flip loan is a thorough but quick process. After finding the desired property, a prospective borrower will speak with a member of our team and pre-qualify for financing. Once the underwriting criterion has been met, Apex Capital will design an outline of the terms and overview of the loan.

There are several easy steps to acquire a Fix and Flip Loan with our dedicated team of loan officers that have experience working with house flipping investors.

In the beginning pre-approval stage, we will evaluate whether the real estate flipping loan scenario fits our lending criteria, assessing where the flip property is located, what the prospective price is, the rehab, and proof of funds. Additionally, We will also evaluate the borrower information, such as previous experience, credit, and financial background.

During the loan processing and underwriting stage, the loan processor analyzes both the investment property’s value and the borrower’s banking and buying history. If the numbers work, the prospective house flipping investors will move on to the funding stage.

When the borrower reaches the funding stage, it consists of paperwork and promissory notes to sign before the funds are released. After all elements are completed to the underwriter and closing agent’s satisfaction, the allocation of funds will be disbursed to the seller of the property or directly to the borrower.

Throughout this period, an inspector will confirm things are done to code. Once all parties have approved the Draw Schedule, each payment installation will be transferred to the borrower or entity’s bank account after completion of each inspection. Transferring of funds to the designated bank account typically occurs 2-3 days after the draw request.


3 Steps to Processing a Fix&Flip Loan


1. Pre-Approval
When a potential borrower applies for the pre-approval process at Apex Capital, they go through a series of steps ensuring they receive the financing that best fits their investment needs. After evaluating whether the real estate flipping project fits our lending criteria, we assess their previous experience, credit, and financial background.

All prospective borrowers should be prepared with their documentation of both their project needs and location, acquisition price, rehab, and proof of funds. Our Application and Pre-Approval process can easily be determined after a quick conversation with a leading Apex Capital member.

2. Processing & Underwriting
When a prospective borrower’s application goes through the underwriting & loan process, it goes through a review of the borrower’s documentation as well as a written proposed scope of the project plan.

Once the application has met our underwriting criteria we will schedule an appraiser to inspect the property.

As we proceed, we will ask for additional documentation that relates to the borrower’s experience, cash availability, income and credit. This process runs parallel to an evaluation and review of the project contractor/builder and the overall history of the property title and insurance.

3. Funding
After all the prospective borrower’s application and documents have been approved, we move on to the closing and funding process.

During this process we require all of our borrowers to complete and sign the following documents; a mortgage, security agreement, personal guarantee, investment affidavit, and assignment of rents and leases.

Once everything is completed to the satisfaction of the underwriter and closing agent, the allocation of funds will be disbursed to the seller of the property or directly to the borrower.