A fix and flip loan is a short-term financing option designed for real estate investors to purchase, renovate, and resell properties for profit. These loans typically have the following characteristics:
- Short duration: Usually 12-18 months
- Secured by the property being flipped
- Focus on the property's potential value rather than the borrower's credit history
- Can cover purchase price, renovation costs, and other related expenses
- Often structured as term loans or lines of credit
- Generally have faster approval processes than traditional loans
- Fix and flip loans allow investors to quickly acquire and improve undervalued or distressed properties, aiming to sell them at a higher price within a short timeframe