The 100% Financing Fix and Flip Loan

I work with real estate investors every day as a loan officer. The pattern I keep seeing is this: someone finds a solid distressed property, the numbers work, the location makes sense, but their cash is tied up in their last acquisition. So they pass on the deal. Or they scramble to find a partner and give up equity they didn’t need to give up.

Most of the investors I talk to have never heard of the program I’m going to walk through here. The 100% financing fix and flip loan. For experienced investors, this covers the full purchase price and 100% of the construction costs. No money out of pocket on the front end.

And the investors who are building serious rental portfolios right now aren’t just using this to flip. They’re using it to acquire, rehab, and then refinance into a DSCR loan so they can hold the property long-term and pull their capital back out to go do it again.

If you’ve heard of the BRRRR strategy, this is the financing stack that makes it work consistently at scale.

Here’s how the loan works, who qualifies, and how to use it as a repeatable system for building a rental portfolio.

This is an investor-focused loan product. The lender is evaluating the deal, your experience as an operator, and the after repair value of the property. Personal income documentation is minimal. This is asset-based lending built for people who are actively doing deals.

Here’s how the experience tiers work:

• 30 or more lifetime flips: You qualify for 100% financing on the purchase price and 100% of the construction budget. Nothing down.

• 10 to 20 flips in the last 3 years: 5% down on the purchase price. Construction costs are still funded at 100%.

The constant across both tiers: the total loan amount has to stay under 75% of the after repair value. That’s the ARV, what the property will be worth when the work is complete. The deal has to support that threshold. If it does, you’re in a very strong position.

For a property with a $400,000 ARV, your total loan exposure on the purchase and rehab combined needs to stay under $300,000. On a distressed property with solid upside, most good deals can work within that. The math just needs to pencil.

Buying and selling is one use case. The more interesting one is using this as step one in a longer hold strategy.

Here’s how it works in practice.

You use the fix and flip loan to fund the acquisition and the rehab. Once the work is done and the property is stabilized with a tenant in place, you refinance out of the fix and flip loan and into a DSCR loan. The DSCR loan qualifies based on the rental income the property generates, not your personal income. If the rent covers the debt service, you qualify.

I broke down exactly how the DSCR refinance piece works in this context in a recent video. If you want to understand the mechanics before you start running numbers: Watch the DSCR Loan Breakdown Here.

When that refinance closes, you pull equity back out, recycle it, and fund the next acquisition. That’s the repeat in BRRRR. And because the fix and flip loan covered 100% of your purchase and construction going in, you’re entering that refinance with a strong equity position already built.

The investors doing this at scale aren’t grinding harder than everyone else. They’re running a system. The loan is part of the system.

This isn’t an entry-level product. The experience thresholds exist because the lender is taking on real risk by covering 100% of a deal. They need to know you’ve done this before.

If you’ve been flipping for a few years and haven’t looked at this kind of financing, it’s worth knowing it’s out there. A lot of experienced investors are still putting 20 to 30 percent down on every deal out of habit. There’s nothing wrong with being conservative, but if you have the track record to qualify for this, you may be limiting how fast you can scale without realizing it.

If you’re newer and not at the thresholds yet, this is a good benchmark to build toward. Every deal you close moves you closer to the experience level where this program opens up.

Every deal is different. The ARV, the rehab scope, your deal history, all of it factors in. I’ll tell you straight whether this program fits your situation or whether there’s a better structure for what you’re working on.

Book a quick call here: https://link.crm-u.co/widget/bookings/stefquickcall.

No pressure, just a conversation about your next deal.

Hope that helps.

Ben Stef | Loan Officer | NMLS# 2018674