Unlock your property profits with the right flip-funding strategy. Flipping houses can be one of the most profitable ventures in real estate. Still, without the right financing, specifically understanding the different types of loans for flipping houses, your plans can stall before they even begin.
Whether you’re a first-time flipper or an experienced investor, choosing the right type of loan is critical to turning a fixer-upper into a cash-flowing asset. With so many options on the market, it’s easy to feel overwhelmed. That’s why we’ve crafted this definitive guide on the types of loans for flipping houses, packed with expert insights, pros and cons, and a smart path to funding your next flip.
14 Types of Loans for Flipping Houses
Ready to maximize your ROI? Let’s dive into the loan options that can transform your real estate goals into reality.
1. Hard Money Loans
Hard money loans are short-term, asset-based financing tools for real estate investors. They are provided by private lenders and secured by the property being purchased rather than the borrower’s credit history. This makes them ideal for house flippers needing quick access to capital.
Hard money loans typically have terms of 6 to 18 months with higher interest rates (8% to 15%) and origination fees. However, the fast funding process and lenient approval criteria make them invaluable for seizing time-sensitive opportunities.
When to Use: Competitive market flips, distressed property purchases, auction buys.
2. Home Equity Loan
A home equity loan lets you use the value of your existing home to finance your flipping projects. This type of loan provides a lump sum at a fixed interest rate, making budgeting for planned renovations easier.
The most significant advantage is the lower interest rate compared to unsecured loans. However, you risk your primary residence if you default. This option is best for homeowners with substantial equity and a solid exit strategy.
When to Use: Fund your first flip, use your home as leverage, and do low-cost flips.
3. Bridge Loans
Bridge loans offer temporary financing until permanent funding is secured or the property is sold. They’re ideal for closing gaps between transactions or covering short-term renovation costs. Bridge loans have higher interest rates but offer speed and flexibility, which can be critical in competitive markets.
When to Use: Buying before selling, quick close flips, capital gaps.
4. Crowdfunding
Crowdfunding platforms allow multiple investors to contribute funds to a single real estate project. As a flipper, you pitch your project to potential backers, who then fund it in exchange for a return on their investment.
This method bypasses traditional lenders and gives access to capital without stringent credit requirements. Popular platforms include Fundrise, RealtyMogul, and Groundfloor.
When to Use: Innovative or large-scale flips, social proof projects, portfolio building.
5. Delayed Purchase Refinance
A delayed purchase refinance allows investors to buy a property with cash and refinance it shortly after closing to pull out their original investment. This frees up money to fund renovations or another purchase.
This strategy works well for experienced flippers who can acquire properties quickly, especially at auctions. It enables faster movement through multiple projects without tying up all your liquidity.
When to Use: Cash buyers, auction properties, and quick refinancing.
6. Private Lenders
Private lenders are individuals or companies willing to lend money for real estate deals outside traditional financial institutions. The terms vary based on relationships, experience, and project viability.
These lenders can be more flexible with terms, timelines, and credit checks. Networking is key to finding trustworthy private lenders, and legal agreements are essential to avoid disputes.
When to Use: Personalized funding needs, unconventional projects, relationship-based deals.
7. Seller Financing
With seller financing, the property owner acts as the lender. The buyer pays the seller in installments, often with interest, bypassing banks completely. This option is beneficial when the seller owns the home outright and is open to negotiations. Terms can be highly flexible and tailored to both parties’ needs.
When to Use: Off-market deals, buyer-seller mutual trust, credit-constrained buyers.
8. K) Loans (FHA 203k Loans)
The FHA 203k loan is a government-backed mortgage that combines purchase and renovation costs into a single loan. It benefits buyers looking to live in and flip the home later. There are two types: the Standard 203k for major rehab and the Limited 203k for minor repairs. These loans have strict eligibility and property standards but offer low down payments.
When to Use: Owner-occupied flips, first-time investors, HUD-approved properties.
9. Fix and Flip Loan
This loan is tailored specifically for property flippers. It covers the property’s purchase and rehab in a single loan product. Hard money lenders typically offer fix-and-flip loans. These loans are short-term and quick to fund, allowing investors to act quickly and profit quickly.
When to Use: Full-scope flips, professional investors, and project-focused loans.
10. Investors
Partnering with investors means raising capital in exchange for equity or a share of the profits. This method is popular for larger projects or when scaling operations. While it reduces financial risk, it also means sharing control and profits. Clear agreements are essential to manage expectations.
When to Use: High-budget flips, joint ventures, team expansion.
11. Traditional Financing
Standard mortgage loans from banks or credit unions are rarely used for quick flips due to lengthy approval times. However, they may work for low-risk or live-in renovations. Conventional loans offer lower rates and longer terms but require good credit, solid income, and often occupancy.
When to Use: Long-term renovation projects, live-in flips, low-risk ventures.
12. Personal Loan
Unsecured personal loans are based on your credit score and income. They are fast and flexible, but usually carry high interest and limited funding. They are best used for small flips or topping off renovation budgets. Because no collateral is required, the risk lies mainly in the borrower’s ability to repay.
When to Use: Minor renovation projects, supplemental funds, and quick close needs.
13. FHA Loans
While not designed for flipping, standard FHA loans can be used in “live-in flip” strategies where the borrower occupies the home for at least one year before selling. These loans offer low down payments and lower credit requirements but come with occupancy stipulations and mortgage insurance.
When to Use: House hacking, entry-level flips, and low down payment needs.
14. Business Line of Credit
A business line of credit gives experienced flippers access to revolving credit. You can draw only what you need and pay interest on the borrowed amount. This flexible tool helps manage multiple projects or unexpected expenses, especially for those running flipping businesses under an LLC.
When to Use: Multiple concurrent flips, seasoned flippers, scaling operations.
Top 5 FAQs About Loans for Flipping Houses
1. What is the best loan for first-time house flippers?
Fix-and-flip loans or FHA 203k loans are ideal for beginners due to their lower entry barriers and tailored features.
2. Can I get a loan with bad credit to flip a house?
Yes, hard money loans or private lenders often focus more on property value than your credit score.
3. How much down payment is required for a house flipping loan?
Most loans require 10–25% down, but FHA and VA-backed loans can go lower with conditions.
4. Is using a personal or hard money loan for flips better?
Hard money loans are superior because they are faster and offer higher loan amounts. Personal loans are better for smaller projects.
5. Can I use a business line of credit to fund multiple flips?
Absolutely. It’s an excellent tool for experienced investors managing multiple properties simultaneously.
Ready to Flip Your First or Next Property? Let Trentium Capital Fund Your Vision
Flipping houses isn’t just about finding the right property. It’s about backing it with the right financing. At Trentium Capital, we provide flexible, fast, and investor-focused loan solutions for real estate professionals at every level.
Fast Approvals
Flexible Terms
Dedicated Advisors
Tailored Fix-and-Flip Packages
👉 Contact Trentium Capital today to discover how we can help turn your flipping goals into high-return investments. Because your success is our investment.
