Fix and flip investing has become one of the most popular real estate strategies in Canada — and for good reason. With the right financing partner and a solid plan, investors can turn distressed properties into profitable sales in as little as six to nine months.

If you’re new to fix and flip lending, this guide will walk you through the essentials: how the loans work, what to look for in a lender, and how to set up your first deal for success.

What Is a Fix and Flip Loan?

A fix and flip loan is a short-term, asset-based loan designed specifically for investors who plan to purchase, renovate, and resell a property within 6–18 months. Unlike traditional mortgages, fix and flip loans are underwritten primarily on the strength of the deal — the purchase price, the renovation budget, and the after-repair value (ARV) — rather than personal income documentation.

How Fix and Flip Loans Work

Most fix and flip loans cover two components:

• Acquisition cost — typically up to 90% of the purchase price
• Renovation budget — often 100% of approved scope of work, released in draws as work is completed

You make interest-only payments during the renovation, then pay off the entire loan when the property sells. Most loans carry no prepayment penalty, so the faster you flip, the less you pay in interest.

What Lenders Look For

While fix and flip lenders are deal-focused, they still want to see a few things from the borrower:

• A clear scope of work and itemized renovation budget
• A realistic ARV supported by comparable sales
• Proof of liquid reserves for unexpected costs
• An exit strategy — typically a sale, but sometimes a refinance into a long-term rental loan

Common First-Timer Mistakes

The biggest pitfalls we see with first-time flippers are underestimating renovation costs, overestimating ARV, and not building in enough holding-cost buffer. A general rule: pad your rehab budget by 15%, and assume the property sells 30 days later than you think.

Getting Started

The best way to start your fix and flip journey is to get pre-qualified with a lender before you find a deal. That way you’ll know exactly how much you can borrow and how fast you can close — which is critical when you’re competing on a hot listing.

Loan Funding Solution offers fix and flip financing across Canada with closings in as little as 5–14 business days. Apply now or speak with a lending specialist to get started.

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