Fix-and-Flip Loans
Short-term financing for purchase and renovation of distressed properties. Fast closings, interest-only payments, and up to 90% of purchase price plus rehab costs.
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Fix-and-Flip Loan Requirements in Michigan
Fix-and-flip loans are short-term financing tools designed for real estate investors who purchase distressed properties, renovate them, and sell for a profit. These programs are available in Michigan and most other states — if you are working in a state outside Michigan, inquire to confirm availability. Unlike conventional mortgages, fix-and-flip loans are based primarily on the property's after-repair value (ARV) rather than the borrower's income, making them accessible to investors who may not qualify for traditional financing.
Speed to Close
One of the defining features of fix-and-flip financing is speed. In Michigan's competitive distressed property market, the ability to close in 7 to 14 days can be the difference between winning and losing a deal. Hard money and private fix-and-flip lenders prioritize the property's value and the borrower's experience over traditional underwriting requirements, allowing for dramatically faster closings than conventional loans. Your loan officer will identify lenders who can meet your specific timeline requirements.
ARV-Based Lending Explained
Fix-and-flip loans are typically structured as a percentage of the property's after-repair value (ARV) — the estimated value of the property after renovations are complete. Most lenders will finance up to 65-75% of ARV, which covers both the purchase price and a portion of the renovation costs. The ARV is determined by an appraisal that considers comparable sales of renovated properties in the area. A realistic ARV estimate is critical to structuring a profitable deal — your loan officer can help you evaluate the numbers before you commit to a purchase.
Exit Strategy and Loan Terms
Fix-and-flip loans are typically 6 to 18 months in duration, with interest-only payments during the term. At the end of the term, the loan is repaid through the sale of the property or a refinance into a long-term rental loan (the BRRRR strategy). Having a clear exit strategy before you close is essential — lenders will want to understand your plan for repaying the loan, and your ability to execute on that plan affects both your approval and your rate.
Frequently Asked Questions
How quickly can I get a fix-and-flip loan?
Fix-and-flip loans can close in as few as 7 to 14 days with the right lender. Speed depends on the lender's process, the property's condition, and how quickly you can provide documentation. Your loan officer will identify lenders who can meet your specific timeline.
What is ARV and how does it affect my loan?
ARV (After-Repair Value) is the estimated value of the property after renovations are complete. Most fix-and-flip lenders will finance up to 65-75% of ARV, covering both the purchase price and a portion of renovation costs. A realistic ARV is critical to deal profitability.
Do I need experience to qualify for a fix-and-flip loan?
Some lenders require prior fix-and-flip experience, while others will work with first-time investors at slightly higher rates or lower LTV ratios. Your loan officer will identify lenders whose requirements match your experience level.
What happens if the project takes longer than expected?
Most fix-and-flip lenders offer loan extensions for a fee if the project timeline runs long. It is important to build a buffer into your timeline and budget. Your loan officer will explain the extension options and costs for your specific loan before you close.
Are fix-and-flip loans available outside Michigan?
Yes — our fix-and-flip programs are available in Michigan and most other states. If you are working in a specific state and are unsure about availability, please reach out to confirm.
Why Michigan Mortgage Solutions?
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Practice Purchase™ System
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Specialty & Hard-to-Place Loans
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