Fix & Flip / Bridge Loan
Short-term, asset-backed financing designed to fund the acquisition and 100% of construction/renovation costs for distressed residential properties being prepared for resale or refinancing.
Core Program Highlights
Short-term loan durations (typically 6 to 24 months) with interest-only monthly payments
Up to 85-90% Loan-to-Cost (LTC) and up to 70-75% After-Repair-Value (ARV) limits
Construction draw escrows disbursed as renovation milestones pass inspection
Experienced and developing real estate operators acquiring distressed properties to renovate and resell (flip) or stabilize for long-term refinancing (BRRRR method).
Higher interest rates and origination points than long-term debt; requires clear exit strategy (sale or refinance); lender terms, track record requirements, and draw fees vary by capital provider.
What Is a Fix & Flip / Bridge Loan?
A bridge or fix-and-flip loan is a short-term, interest-only financing facility tailored for real estate investors acquiring properties requiring substantial renovation before resale or long-term lease-up.
Who Commonly Uses It?
Fix-and-flip rehabbers, distressed property wholesalers, and investors executing the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy.
Primary Advantages
- •Speed of execution (often closing in 7 to 14 days)
- •Finances both purchase price and 100% of renovation budget
- •Asset-centric underwriting focused on property potential rather than borrower personal debt ratios
Meaningful Limitations & Risks
- •Short maturity terms (typically 12 to 18 months)
- •Higher interest rates than permanent debt
- •Requires structured draw management and contractor accountability
Documentation & Qualification Style
Evaluation of the borrower prior project track record, appraisal assessing both As-Is and After-Repair Value (ARV), and review of the detailed contractor line-item scope of work.
When Another Product May Be Better
If the property is already in habitable, turnkey condition and you intend to hold it as a long-term rental, permanent DSCR or conventional financing avoids short-term refinancing costs.
Private Bridge & Construction Capital Guidelines
Private capital asset-based lending; terms, experience tiering, and leverage vary by lender.
Program Verification Notice: Terms Real Estate provides structured mortgage education, scenario comparison, and lender-pathway navigation. Rates, qualification thresholds, debt-to-income benchmarks, and underwriting guidelines vary by participating lender, investor guidelines, and current market conditions. All loan structures should be independently verified for your specific transaction.
Related Financing Solutions
DSCR Investor Loan
Asset-based investor financing where loan approval is calculated directly on the rental property cash flow rather than personal tax returns or employment verification.
Conventional Investment Property Loan
Conforming mortgage financing for 1-4 unit residential rental properties backed by Fannie Mae or Freddie Mac standards for borrowers with strong verifiable personal income.
Bank Statement / Non-QM Loan
Specialized mortgage underwriting that qualifies self-employed borrowers, business owners, and 1099 contractors using 12 to 24 months of bank deposit cash flow instead of tax returns.
Evaluate Your Scenario with Alfred
Alfred can assess your purchase budget, debt-to-income profile, and target loan parameters to determine if Fix & Flip / Bridge Loan aligns with your objectives.