Can I get a fix and flip loan on my first flip?
Yes, most fix and flip lenders will fund a first flip, typically at 80 to 85 percent of purchase price, 100 percent of the rehab budget in draws, and a cap of 65 to 70 percent of the after-repair value, with a rate a half to one point above an experienced borrower's. What gets a first flip approved is a licensed contractor, a realistic budget with a 10 percent contingency, and a modest scope.
First flip vs experienced
| Item | Experienced (3+ flips) | First flip |
|---|---|---|
| Purchase financed | 85 to 90 percent | 80 to 85 percent |
| Rehab financed | 100 percent | 100 percent, sometimes 90 |
| ARV cap | 70 to 75 percent | 65 to 70 percent |
| Rate | Lower end of the range | 0.5 to 1 point higher |
| Points | 1.5 to 2 | 2 to 3 |
| Scope allowed | Any | Cosmetic to moderate; no structural or additions with most lenders |
| Reserves | 3 months of interest | 6 months of interest |
Ranges vary by lender.
What the lender wants to see
A contractor with flips behind them. Their license, insurance, references, and a bid that matches your scope. This substitutes for your experience.
A scope you can finish. Kitchens, baths, flooring, paint, roof, and systems. Leave additions, foundations, and permits-heavy work for the second or third project.
A margin with room. Lenders want the projected profit to survive a 20 percent overrun and a three-month delay.
Liquidity. The down payment, closing costs, six months of interest, and working capital for the first draw. On a $300,000 purchase with $60,000 rehab, that is often $75,000 to $90,000 in cash.
Comps. Three renovated sales within a mile and six months at your planned finish level.
Sizing the first flip
A first flip should be small enough that a bad outcome is survivable. Work backward from cash: total the money you can commit, and target a purchase price where 15 to 20 percent down plus rehab working capital plus six months of interest fits inside it with a cushion.
Mistakes that end first flips
- Underestimating the rehab. Get two bids and add 10 percent.
- Buying at the ARV. The purchase price plus rehab plus costs has to leave a margin.
- Paying the contractor ahead of draws without working capital to cover the gap.
- Choosing a property that needs permits and inspections you have never managed.
- Ignoring the backup exit. If it does not sell, does it work as a rental?
The partner option
A partner with completed flips, even for a small share, moves the file into the experienced tier. The partner signs as a guarantor and shares the profit; the terms improve for both of you.
How CommFi handles it
One application with the contract, scope, contractor, and comps. Our lending desk prices the flip loan first and funds direct when it fits. When a lender that specializes in first-time flippers is the better match, the desk searches a database of 7,000+ lenders and the ones that fund new borrowers compete for it. Zero upfront fees.
Related reading
Related questions
- Can I get a flip loan with no experience?
- Yes, from most flip lenders, at 80 to 85 percent of purchase price and 65 to 70 percent of after-repair value, with a licensed contractor on the project.
- How much cash do I need for my first flip?
- Typically 15 to 20 percent of the purchase price, closing costs, six months of interest, and working capital for the first rehab phase.
- Do first-time flippers pay a higher rate?
- Usually a half to one point higher, plus an extra point in fees, until you have completed projects.
- What kind of property should a first flip be?
- Cosmetic to moderate rehab: kitchens, baths, flooring, paint, systems. Avoid structural work and additions on the first project.
- Does a partner with experience help?
- Yes. A guarantor with completed flips moves the file into the experienced tier with most lenders.
Property developer and licensed appraiser. 22+ years in real estate: TIC conversions, multi-unit redevelopments, mixed-use, fix and flips, commercial DSCR.