How much does a fix and flip loan cost?
A fix and flip loan typically costs 9.5 to 13 percent interest, paid interest-only, plus two to three origination points, draw fees of $150 to $300 each, and closing costs of a few thousand dollars. On a $350,000 loan held nine months at 11 percent with two points, the all-in cost is roughly $40,000, or about 11 percent of the loan.
The fee list
| Cost | Typical range |
|---|---|
| Interest rate | 9.5 to 13 percent, interest only |
| Origination points | 2 to 3 |
| Processing or underwriting fee | $995 to $2,500 |
| Valuation | $300 to $1,500 for desktop or inspection; $500 to $1,200 for a full appraisal |
| Draw fees | $150 to $300 per draw, 3 to 6 draws |
| Extension | 0.5 to 1 point per extension |
| Minimum interest | 3 to 6 months |
| Title, escrow, recording | $1,500 to $4,000 |
Ranges vary by lender and market.
A worked example
$350,000 loan (purchase $280,000 financed at 90 percent of $300,000, plus $70,000 rehab), 11 percent, two points, nine months, four draws:
- Interest on the purchase portion for nine months: about $23,000
- Interest on rehab draws as released, average balance half the period: about $2,900
- Points: $7,000
- Processing, valuation, draws, closing: about $6,500
- Total: about $39,400
Add carrying costs outside the loan: taxes, insurance, utilities, and selling costs of 6 to 8 percent at sale.
What moves the price
Experience. Each tier of completed flips cuts the rate a quarter to a half point and adds leverage.
Leverage. 75 percent of cost prices lower than 90.
Credit. 720 and above earns the best tier; under 660 costs a point or more.
Property and market. Single-family in a liquid market prices lowest.
Speed. Rush closes add a half point.
Interest on drawn funds
Most flip lenders charge interest only on funds drawn, so the rehab holdback costs nothing until released. A few charge on the full loan from day one, which on a $70,000 holdback at 11 percent is about $640 a month of extra cost. Ask before you sign.
The cost of time
Every month of delay on a $350,000 loan at 11 percent costs about $3,200 plus carrying costs. A three-month slip on a flip with a $50,000 projected profit removes about $12,000 of it. Budget the timeline with a cushion and the loan term with more.
Reducing the cost
- Build a track record; two completed flips move you to a better tier.
- Put more down on the purchase.
- Confirm the minimum interest period matches your timeline.
- Submit draws promptly to keep the project moving.
- Line up the buyer's financing or the sale early so payoff happens on schedule.
How CommFi handles it
Our lending desk prices the flip loan first and funds direct when it fits. When a specialist with better pricing for your tier is the right match, the desk searches a database of 7,000+ lenders and the ones that fit compete on rate and points. Zero upfront fees.
Related reading
Related questions
- What interest rate do fix and flip loans charge?
- Typically 9.5 to 13 percent, interest only, with experience, leverage, and credit setting where you land.
- How many points does a flip loan cost?
- Two to three at closing is typical.
- Do I pay interest on the rehab budget before it is drawn?
- Most lenders charge only on drawn funds. Some charge on the full loan from day one; ask before closing.
- How much does a flip loan cost in total?
- Roughly 9 to 12 percent of the loan amount on a nine-month project, before taxes, insurance, and selling costs.
- Are flip loan costs tax deductible?
- Interest and fees are generally part of the project's cost basis for a flip. Confirm with your tax advisor.
Property developer and licensed appraiser. 22+ years in real estate: TIC conversions, multi-unit redevelopments, mixed-use, fix and flips, commercial DSCR.