Fix and Flip Loans vs Hard Money: What's the Difference?

If you're a real estate investor looking to finance a fix and flip project, you've probably come across both terms — fix and flip loans and hard money loans. Many people use them interchangeably, but there are some important differences worth understanding before you choose a lender.

What is a Hard Money Loan?

Hard money loans are short-term loans secured by real estate. They come from private lenders or investors rather than banks, and approval is based primarily on the value of the property rather than your credit score or income. They're fast but often come with very high interest rates and fees.

What is a Fix and Flip Loan?

A fix and flip loan is a type of short-term financing specifically designed for investors who buy distressed properties, renovate them, and sell for a profit. Fix and flip loans typically cover both the purchase price and renovation costs. They're faster to close than conventional loans and are evaluated based on the property's after-repair value (ARV).

Key Differences

Hard money loans are often more expensive with higher rates and points. Fix and flip loans from specialized lenders like Jordan Lev Mortgage tend to be more structured with clearer terms, faster processes, and lenders who actually understand the investment strategy.

What Do Fix and Flip Lenders Look At?

Purchase price, after-repair value (ARV), renovation budget, your experience as an investor, and exit strategy. Credit score matters but is not the primary factor.

How Fast Can You Close?

Speed is everything in fix and flip investing. A good deal can disappear overnight. At Jordan Lev Mortgage we understand that and work to close as fast as possible so you never lose a deal over financing.

What's a Typical Fix and Flip Loan Structure?

Loan terms are typically 6-18 months. Loan amounts are based on a percentage of ARV, usually 65-75%. Interest rates are higher than conventional loans but the flexibility and speed make it worthwhile. Most lenders require 10-20% down.

Is a Fix and Flip Loan Right for You?

If you've found a distressed property with strong upside potential and you have a clear renovation plan and exit strategy, a fix and flip loan could be exactly what you need.

At Jordan Lev Mortgage we work with investors at all experience levels — from first time flippers to seasoned professionals with large portfolios.

Submit your deal at jlwmtg.com or call 717-586-5144 to discuss your next project.