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Fix & Flip Loans — Redding, CA

Move Fast. Finance the Deal. Keep the Profit.

Fix and flip loans are short-term, asset-based financing designed for real estate investors who buy distressed properties, renovate them, and sell for profit. Pete Metz at Von Mortgage structures fix and flip loans for investors throughout Shasta County — fast approvals, interest-only payments, and renovation draws built into the loan.

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75% Up to ARV
6–18 Month Loan Terms
Interest Only Payments
620+ Credit Score Typical
The Basics

What Is a Fix and Flip Loan?

A fix and flip loan is a short-term, asset-based mortgage used by real estate investors to purchase and renovate distressed properties with the intent to sell at a profit. Unlike conventional mortgages that qualify you based on your personal income and are meant to be held for 15–30 years, fix and flip loans are underwritten primarily on the value of the deal — the property's purchase price, renovation budget, and projected after-repair value (ARV).

These loans are structured specifically for the investment timeline. Terms typically run 6–18 months — long enough to buy, renovate, and sell. Payments are interest-only during the loan term, which minimizes your monthly cash outflow while the property is under renovation and not generating income. Renovation funds are built into the loan and released through a draw schedule as work is completed, so you're not paying interest on money you haven't received yet.

Fix and flip loans are sometimes called hard money loans or bridge loans. The key distinction from conventional investment financing is speed and flexibility — lenders focus on the deal's merits and the investor's exit strategy rather than a two-year tax return history. For a motivated investor looking at distressed inventory in the Redding market, this speed can be the difference between getting the deal and losing it.

At Von Mortgage, I work with investors at every experience level — from first-time flippers who want to understand the numbers before committing, to experienced operators running multiple projects simultaneously. I'll structure the loan around your specific deal and exit strategy, not a one-size-fits-all product.

The 70% Rule — a quick gut check: Most experienced investors use this formula before making an offer: Maximum Purchase Price = (ARV × 70%) − Renovation Costs. Example: ARV $350,000 × 70% = $245,000 − $60,000 renovation = $185,000 max purchase price. This builds in a profit margin and covers financing costs. It's a starting point, not a hard rule — but it's a fast way to know if a deal pencils out before you run the full numbers.
Why Investors Choose Fix & Flip Financing

The Benefits of a Fix and Flip Loan

Conventional financing is too slow, too restrictive, and doesn't account for renovation costs. Fix and flip loans are built for how investment deals actually work.

Fast Approvals & Closings

Fix and flip loans can close in as little as 7–14 days in many cases — far faster than the 30–45 days typical of conventional financing. In competitive markets where distressed properties move quickly, speed of close is often as important as price.

Based on the Deal — Not Just Your Income

Fix and flip lenders underwrite primarily on the property's value and your exit strategy. Your tax returns, W-2s, and debt-to-income ratio matter less than the deal's numbers — ARV, renovation budget, and your experience as an investor. This opens the door for business owners, self-employed investors, and newer flippers who might not qualify for conventional investment loans.

Renovation Costs Built Into the Loan

Unlike a conventional mortgage that only covers the purchase price, fix and flip loans bundle the purchase and renovation budget into a single loan. Renovation funds are held in escrow and released through a draw schedule as work is completed — so you're never out-of-pocket for renovation costs before the lender reimburses you.

Interest-Only Payments

During the loan term, you only pay interest on the outstanding balance — not principal. This keeps your monthly carrying costs low while the property is under renovation and not generating income. You only pay on the funds you've drawn, not the full loan amount. Principal is repaid at sale or refinance.

Finance Distressed Properties

Conventional lenders won't touch properties that need significant work — the condition fails their appraisal requirements. Fix and flip lenders are comfortable with distressed, vacant, and REO properties precisely because the loan is underwritten on ARV, not current condition. Properties that traditional buyers can't finance become opportunities for fix and flip investors.

ARV-Based Lending

The most powerful feature of fix and flip financing is that the loan is sized against the after-repair value — what the property will be worth after renovations — not the current distressed purchase price. This means you can finance significantly more of the deal than a conventional lender would allow on a property in poor condition.

No Prepayment Penalty

Most fix and flip loans have no prepayment penalty — if you complete the renovation and sell faster than expected, you pay off the loan and pay interest only for the time you held it. Finishing early saves money. There's no penalty for executing efficiently.

Scale Your Portfolio

Experienced investors can run multiple fix and flip loans simultaneously — each loan is underwritten on its own deal merits rather than your aggregate debt load. This allows active investors to scale operations and run multiple projects in parallel, which isn't possible with conventional financing.

Flexible Exit Strategies

Your exit doesn't have to be a sale. Fix and flip loans can be refinanced into a DSCR rental loan if you decide to hold the property as a rental after renovation. This flexibility lets you adapt your strategy based on market conditions — sell if margins are strong, hold if rental income supports long-term ownership.

The Process

How a Fix and Flip Loan Works — Step by Step

From finding the deal to collecting your profit — here's the complete fix and flip financing timeline.

Find the Deal & Run the Numbers

Before calling a lender, know your numbers: estimated purchase price, renovation budget, and ARV. The ARV is the most important figure — it determines how much the lender will finance and whether the deal has sufficient margin. Apply the 70% rule as a quick gut check. If the deal pencils, call Pete before making your offer — I can give you a fast read on whether it qualifies and what your loan structure would look like, so you can move with confidence.

Pre-Approval & Loan Structuring

We review the deal: property address, purchase price, renovation scope, ARV, and your exit strategy. I'll structure the loan — purchase financing plus renovation budget — and tell you exactly how much you need to bring to closing, what your interest-only monthly payment will be, and what your total financing costs look like over your projected hold period. Pre-approval on fix and flip loans moves fast — typically 24–48 hours once I have the deal details.

Appraisal & Closing

The lender orders an appraisal that establishes both the as-is value and the after-repair value based on your renovation plans and comparable sales. Fix and flip appraisals move faster than conventional appraisals because the lender is experienced with investment properties. Once the appraisal is back and underwriting is complete, we close — often in 10–14 business days from start to finish. At closing, purchase funds are wired and renovation funds are placed in an escrow draw account.

Renovation & Draw Schedule

Construction begins. Renovation funds are released in draws as milestones are completed — typically 3–5 draws over the project timeline. Before each draw is released, the lender sends an inspector to verify work is complete as represented. Draws are typically funded within 48–72 hours of inspection approval. During this phase, you're making interest-only payments on the outstanding loan balance — not on the full loan amount including undrawn renovation funds.

List, Sell & Repay

Once renovation is complete, you list and sell the property. At closing, the fix and flip loan is repaid from sale proceeds — principal plus any remaining interest. Your profit is the difference between the net sale price and your total costs: purchase price, renovation costs, financing costs, holding costs, and selling costs. Most loans have no prepayment penalty — sell fast and keep more of your margin.

Or — Refinance Into a Rental Loan

If the market shifts or the rental numbers are strong, you don't have to sell. Once renovation is complete and the property is stabilized, I can refinance your fix and flip loan into a DSCR (Debt Service Coverage Ratio) rental loan — a long-term investment mortgage based on the rental income the property generates rather than your personal income. This turns a flip into a long-term hold without a sale event or capital gains tax trigger.

Understanding the Metrics

ARV, LTV & LTC — The Numbers That Drive Your Deal

Fix and flip lenders speak a different language than conventional lenders. Here's what these terms mean and how they determine your loan amount.

After-Repair Value
ARV

The estimated market value of the property after all planned renovations are complete. This is established by the lender's appraisal using comparable sales of similar renovated properties in the area. ARV is the foundation of fix and flip loan sizing — most lenders cap the total loan at 70–75% of ARV.

Loan-to-Value Ratio
LTV

The loan amount divided by the property value. On a fix and flip loan, LTV is typically calculated against the ARV — so a 75% ARV-LTV on a $350,000 ARV means a maximum loan of $262,500. Most lenders also look at as-is LTV (loan vs. current distressed value) to assess immediate risk.

Loan-to-Cost Ratio
LTC

The loan amount divided by the total project cost (purchase price + renovation budget). LTC limits are typically 75–85% — meaning for every $100 in total project cost, the lender will finance $75–$85. The remaining 15–25% is your equity contribution. Lenders use LTC to ensure you have "skin in the game."

Real Deal Example — Shasta County Property

Purchase Price
$180,000
Renovation Budget
$55,000
Total Project Cost
$235,000
After-Repair Value (ARV)
$320,000
Max Loan (75% ARV)
$240,000
Your Cash In (est.)
~$35,000–$50,000
Est. Gross Profit
$320,000 − Costs
Interest-Only Payment
~$2,000–$2,500/mo

This is an illustrative example only. Actual loan amounts, rates, and cash requirements vary by deal, lender, and borrower profile. Call Pete at (530) 227-2476 to run the numbers on your specific deal.

Which Loan Is Right for Your Strategy?

Fix & Flip vs DSCR vs Conventional Investment

Different investment strategies need different financing tools. Here's how fix and flip compares to the two other main investment loan options.

Fix & Flip Loan DSCR Rental Loan Conventional Investment
Purpose ✓ Buy, renovate & sell Buy & hold rental property Buy & hold (primary or investment)
Loan Term ✓ 6–18 months 30-year (long-term) 15 or 30-year
Payment Type ✓ Interest-only Principal + interest Principal + interest
Loan Sizing Basis ✓ ARV + renovation costs Property rental income (DSCR) Current appraised value
Renovation Funds ✓ Built into loan via draws Not included Not included
Income Verification ✓ Deal-based — minimal income docs Property cash flow only Personal W-2s + tax returns
Speed to Close ✓ 7–14 days typical 21–30 days 30–45 days
Distressed Properties ✓ Yes — designed for them Must be rentable condition Must pass appraisal standards
Interest Rate 9–14% typical (2025) 6–9% typical Lowest — tied to market rates
Best For ✓ Active investors flipping for profit Investors building rental portfolio Owner-occupied or strong-credit investors

Fix & Flip loans convert to DSCR loans seamlessly after renovation — giving you maximum flexibility on your exit strategy. Ask Pete about the fix-to-rent path.

Do You Qualify?

Fix and Flip Loan Requirements

Fix and flip lenders care more about the deal than the borrower. These are the key metrics — the deal's numbers are often as important as yours.

Credit Score
620+ Typical

Most fix and flip lenders require 620–640 minimum. Scores of 680+ unlock better rates. Some lenders will work with lower scores for experienced investors bringing larger down payments.

Down Payment
15–25% of Purchase

Most lenders finance 75–85% of the purchase price. Your down payment is the gap between the purchase price and the loan amount. Renovation costs are typically covered separately through the draw schedule.

ARV-Based Lending
Up to 75% of ARV

The total loan (purchase + renovation) is typically capped at 70–75% of the after-repair value. This ensures the lender has a comfortable equity cushion based on the completed property value.

Loan Term
6–18 Months

Most fix and flip loans run 6–12 months, with 12 months being most common. Extensions are available if needed. The loan must be repaid at the end of the term — either by sale or refinance.

Interest Rate
9–14% (2025)

Rates are higher than conventional loans because the loan is short-term and asset-based. Your rate is determined by your credit score, experience level, LTV, and deal strength. Interest-only payments keep monthly costs manageable.

Experience
First-Timer Friendly

No prior flip experience is required, though experienced investors typically get better rates and terms. First-time flippers may need a stronger credit score, lower LTV, or larger cash reserves to offset the experience factor.

Cash Reserves
3–6 Months PITIA

Lenders want to see liquid reserves — typically 3–6 months of projected loan payments — after closing costs and down payment. Reserves demonstrate you can handle unexpected costs or timeline delays without defaulting.

Exit Strategy
Sale or Refinance

You must have a clear, credible exit strategy — sell at the projected ARV or refinance into a DSCR rental loan. Lenders underwrite on the assumption that the loan will be repaid at the end of the term. A realistic ARV and strong comparable sales support your exit.

Guidelines vary by lender and deal. Fix and flip loans are investment products — not available for primary residences. Final approval subject to full underwriting and appraisal. This page is informational, not a commitment to lend. Call Pete directly at (530) 227-2476 to run the numbers on your deal.
Frequently Asked Questions

Questions Investors Ask About Fix and Flip Loans

A fix and flip loan is a short-term, asset-based mortgage used by real estate investors to purchase and renovate distressed properties with the intent to sell at a profit. Unlike conventional mortgages, fix and flip loans are underwritten primarily on the property's after-repair value (ARV) and the deal's merits rather than the borrower's personal income. They feature short terms (6–18 months), interest-only payments, and renovation funds disbursed through a draw schedule as work is completed.

ARV stands for After-Repair Value — the estimated market value of the property after all planned renovations are complete. It's the most important number in fix and flip financing because lenders base the maximum loan amount on a percentage of ARV (typically 70–75%) rather than the current distressed purchase price. This allows investors to finance significantly more of the deal than a conventional lender would allow. ARV is established by the lender's appraisal using comparable sales of similar renovated properties in the area.

Most fix and flip lenders finance 75–85% of the purchase price, meaning you'd need 15–25% down. Renovation costs are typically covered separately through the loan's draw schedule — so you generally don't need to bring cash to cover the renovation budget upfront. The total loan (purchase plus renovation) is capped at 70–75% of ARV. Your required cash contribution depends on the specific deal structure, your credit score, and your experience level.

Renovation funds are held in escrow and released in stages as construction milestones are completed — typically 3–5 draws over the project timeline. Before each draw is released, the lender sends an inspector to verify that work is complete as represented. Draws are usually funded within 48–72 hours of inspection approval. You only pay interest on the funds you've actually drawn, not the full renovation budget sitting in escrow — which keeps your monthly carrying costs lower during the early stages of construction.

Yes — no prior flip experience is required to qualify for most fix and flip loans. However, first-time investors typically face stricter terms than experienced flippers: a higher credit score requirement, lower LTV (meaning more cash down), or larger reserve requirements to offset the lack of track record. The strength of the deal itself matters a lot — a first-time investor with a well-underwritten deal at conservative LTV is often more fundable than an experienced flipper with a thin-margin deal. I work with first-time investors regularly and will tell you honestly whether your deal makes sense before you commit.

This is one of the most important risk factors in fix and flip investing. Most loans include a contingency reserve (typically 10–15% of the renovation budget) built into the loan to cover unexpected costs. For timeline overruns, most lenders offer extensions — usually 1–3 months at a fee — if you've been making payments and the project is progressing. The key risk is running out of both time and options — if the loan matures before you can sell or refinance, you may face default. The best protection is a conservative budget, a realistic timeline, and a credible exit strategy before you start. I'll walk through these scenarios with you before the loan closes.

The 70% rule is a quick formula investors use to determine the maximum purchase price that leaves sufficient margin for profit and costs: Maximum Purchase Price = (ARV × 70%) − Renovation Costs. For example, if a property has an ARV of $350,000 and needs $60,000 in renovations, the maximum purchase price under the 70% rule is ($350,000 × 70%) − $60,000 = $185,000. The 30% buffer is meant to cover financing costs, holding costs, selling costs, and profit. It's a starting point — some experienced investors operate at 75–80% in low-cost markets, while others use 65% to build in more cushion. The Redding market conditions should factor into your specific threshold.

Yes — this is one of the most powerful strategies available to real estate investors and it's called the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat). Once your renovation is complete and the property is stabilized with a tenant in place, I can refinance your fix and flip loan into a DSCR (Debt Service Coverage Ratio) rental loan — a long-term investment mortgage that qualifies based on the rental income the property generates, not your personal income. This lets you pull out your invested equity, convert to a long-term hold, and potentially repeat the process on your next deal.

Have a Deal? Let's Run the Numbers.

Find Out If Your Flip Pencils Out

Send me the address, purchase price, renovation estimate, and your ARV — or just call and we'll run through it together. A 15-minute call is all it takes to know whether the deal works, how much you need to bring to closing, and what your interest-only payments will look like. No pressure. No commitment. Just straight numbers from a local lender who knows the Redding investment market.

Schedule Your Free Consultation! Apply Now

Office line: (530) 221-7700 — calls go to reception. To reach Pete directly: (530) 227-2476

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2777 Bechelli Lane Redding, Ca 96002

Pete@VonMortgage.com

(530) 221-7700

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