Financing a Fix & Flip: Comparing Your Funding Options

How you finance a fix-and-flip deal can matter as much as the deal itself. The right structure protects your margin and your timeline; the wrong one can turn a profitable renovation into a stressful race against interest payments. Here is an overview of the paths investors most commonly use.

Cash-Out Refinance

Replaces an existing mortgage with a larger one, paying out the difference in cash. It can offer a lower rate than short-term investment financing, but it resets the clock on your primary loan and puts your existing property up as collateral — a meaningful trade-off to weigh carefully.

Home Equity Loans & HELOCs

A home equity loan provides a lump sum at a fixed rate; a HELOC works more like a revolving line of credit you draw against as needed. Both place a second lien on the property used as collateral, so they work best for investors with substantial equity already built up elsewhere.

Hard Money Loans

Private, asset-based loans underwritten primarily on the property's value rather than the borrower's income. Rates typically run higher than conventional financing and terms are short — usually six to eighteen months — but approval and funding can happen in days rather than weeks, which matters when competing for a deal.

Rehab / Fix-and-Flip Loans

Structured around the property's after-repair value (ARV) rather than its as-is condition, with funds released in stages as renovation milestones are completed and inspected. Loan-to-value on the renovation budget is generally more generous for investors with a track record of completed projects.

Bridge Loans

Short-term financing that "bridges" the gap between buying a property and either selling it or securing permanent financing. Useful when timing does not line up cleanly — for example, closing on a new acquisition before a prior project sells.

Private & Partner Financing

Capital from individual investors, friends, family, or joint-venture partners in exchange for interest or a share of the profit. Terms are negotiable, but every private arrangement should still be documented in writing by an attorney — treat it with the same discipline as institutional financing.

Matching Financing to the Deal

New investors are often better served by more conservative, lower-leverage options while they build a track record. Experienced investors with multiple completed projects typically have access to faster, higher-leverage products because lenders can underwrite their execution history, not just the property.

ARKInvest, Corp. does not originate, broker, or offer financing of any kind. This overview is for general education only — work with a licensed lender or mortgage broker to find the structure that fits your specific deal.