6 min read
What Lenders Review in a Fix-and-Flip Deal
The property, the plan, and the borrower: a breakdown of what typically goes into evaluating a flip financing request.
A fix-and-flip loan is underwritten around a specific project, not just a borrower's credit file. Understanding what a lender typically reviews can help you prepare a stronger, faster-moving request.
The property
Lenders generally start with the property itself: its current condition and value, the neighborhood and comparable sales, and — if renovation is planned — a realistic after-repair value based on similar finished properties nearby.
The scope of work and budget
A clear, itemized scope of work with a realistic budget signals a well-planned project. Lenders look for a budget that accounts for the actual condition of the property, not just an optimistic estimate, and a timeline that's consistent with the scope of the work.
The exit plan
Because a fix-and-flip loan is short-term, lenders want to understand how you plan to repay it — typically by selling the finished property. A realistic resale price, supported by comparable sales, and a reasonable timeline both matter.
The borrower's experience and liquidity
Experience with similar projects and available liquidity to cover your portion of the deal and any unexpected costs both factor into most lenders' evaluation. First-time investors aren't automatically disqualified, but should expect the plan and the property to carry more of the weight.