A fix and flip loan is short-term financing for a real estate investor to buy and renovate a property, then sell it or refinance it into a long-term loan, with the renovation money released in draws as the work is done. These investor loans are often called hard money or private money loans.
Run the numbers first: fix and flip calculator
We make fix and flip loans on investment properties in Kentucky, as a direct mortgage lender based in New Jersey. For business purposes only.
See how a deal pencils, then get terms in writing.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
Kentucky’s median home value, $205,600, is below the national median of $332,700. About 47.1 percent of Kentucky’s homes were built before 1980 and 21.6 percent before 1960, against 49.7 and 25.6 percent nationally. Its homeowner vacancy rate, the share of the owner housing stock that is empty and for sale, is 0.9 percent (national: 0.9), and its rental vacancy rate is 4.6 percent (national: 5.5).
Kentucky’s housing is close to the nation’s in age: almost half of its homes were built before 1980, so many of the houses investors buy are decades old.
Older houses can hide work behind the walls, in the wiring, plumbing, heating and roof, so build the budget from a contractor’s walk-through and keep a cushion for surprises. If the work reaches the foundation or the structure, or the budget comes close to the purchase price, tell us early: heavy rehab projects are priced and sized differently. What counts as heavy rehab?
With the median home value below the national median, a full renovation budget on a lower-priced house can come close to the purchase price, so price the work before you make an offer.
Our state-by-state study puts a year of Kentucky’s median rent at about 5.64 dollars for every 100 dollars of its median home value, number 13 of the 41 places we cover (40 states and the District of Columbia), counting from the highest (national: 5.10), a guide to how rents compare with prices if you keep the house. See rent compared with home values, state by state and rental vacancy rates, state by state.
For a flip, what matters is the house you have in mind: what it costs, what the work costs, how long the work and the sale take, and what similar renovated homes nearby have sold for. State figures are a starting point, not a substitute for the comparable sales, the contractor’s bid and the inspection of that property.
Source: U.S. Census Bureau, American Community Survey 5-year estimates, 2020-2024 (tables B25077, DP04 and B01003). Estimates, not counts. The vacancy rates are the share of homes for owners, and of rentals, that stood empty and for sale or for rent. The figures for Louisville and Lexington are for the consolidated city and county government.
Fidelity Residential is a direct mortgage lender based in New Jersey. We make fix and flip loans on investment properties in Kentucky: short-term, business-purpose loans for investors to buy and renovate a property, then sell it or refinance it.
Short-term investor loans to buy and renovate are often called hard money or private money loans. Ours work the same way investors expect, sized on the deal rather than on your tax returns, but you deal with a mortgage lender you can look up on NMLS Consumer Access, your terms come in writing on a term sheet before you commit, and renovation money is released against a third-party inspection of the finished work.
You work with us by phone, email and online. A loan officer can go through the purchase, the renovation budget and the value you expect after the work, and tell you early where the deal stands.
A fix and flip loan, also called a residential transition loan, has two parts. The money to buy the property is paid out at closing. The money for the renovation is held back and released in draws as the work is finished and an inspector confirms it.
You pay interest only each month, and the balance is repaid at the end of a short term, when you sell or refinance; you can ask for an extension if you need more time. The loan is sized on what the property is worth before and after the work, not on your personal income.
These loans are short-term and priced for speed. They suit a project with a real plan to sell or refinance, and they are the wrong tool for a property you mean to keep for years on the same loan.
A worked example, in words. Say you are buying a dated one-family house in Bowling Green through a company, to renovate and sell.
If your project includes foundation work, structural demolition or an addition, tell us early: heavy rehab projects are priced and sized differently. What counts as heavy rehab?
Size up a deal first. The Deal Snapshot leverage estimator takes your purchase price, renovation budget and after-repair value and shows how the deal pencils on our program. It is an estimate, not an offer; your exact numbers come back with your quote. The fix and flip calculator works out the projected profit and the return on your cash with your own figures; it counts interest on the whole loan, the cautious case.
The loan reads the deal, so the deal has to hold together on paper.
Residential properties of one to four units, townhomes and condos that nobody on the loan will live in, including properties that need a lot of work. Each program sets its own rules for the property, so tell us the address when you request a quote.
Before closing you list the renovation line by line: site work, structure, systems, finishes, exterior and a cushion for surprises. That budget becomes the plan for the draws. Check the local permit and inspection rules before you set the schedule.
As work is finished you ask for a draw, a third-party inspector confirms it, and the completed work is reimbursed. Materials bought but not yet installed are not paid for, so plan your cash to pay for each stage before its draw. Interest on the renovation money is charged as each draw is paid out, not from closing.
Selling or renting the finished property can carry taxes and local requirements of its own. Ask your tax adviser, and check the local rules.
Purchase or refinance. Terms depend on the strategy and on your record of completed projects.
Buy a property that needs work, renovate it with money released in draws, and repay the loan when you sell.
Renovate and keep the property as a rental. Once it is rented, a long-term rental loan based on the rent can replace the short-term loan.
DSCR loans in KentuckyBuy a lot and build, or build on land you already own, to sell or keep as a rental. A feasibility report, contractor details and plans or a permit are part of the file.
Construction and renovation loansShort-term financing on a property that needs little or no work, while you sell, lease it up or arrange a long-term loan.
Not sure you have everything? Request a quote anyway and we will guide you.
Fix and flip loans are often called hard money or private money loans, and ours do the same job: short-term financing to buy and renovate, sized on the deal. We make fix and flip loans on investment properties in Kentucky, for business purposes only. Fidelity Residential is a dba of PFN Lending Group, Inc. (NMLS #103098), a direct mortgage lender based in New Jersey; you can look the company up on NMLS Consumer Access (opens in a new tab).
By phone, email and online. Send the deal through the quote form or call 732-686-9999. We size the loan for your deal and send a term sheet you can sign online. A third-party inspector confirms each stage of the work for the draws, and a loan officer works through the rest of the file with you.
No. On our fix and flip loans, interest on the renovation money is charged as each draw is paid out, not from closing, so renovation money still held back does not cost you interest. You pay interest only each month, and your term sheet shows the terms for your deal. Our fix and flip calculator counts interest on the whole loan, the cautious case.
Terms depend on your record of completed projects. First-time investors are considered for purchases, on tighter terms. A loan officer can tell you where your experience puts you.
Yes. Residential properties of one to four units, townhomes and condos that nobody on the loan will live in can be financed, including properties that need a lot of work. The loan looks at the purchase, the renovation budget and the value expected after the work. Heavy rehab projects (foundation work, structural demolition, additions, or a budget close to the purchase price) are priced and sized differently. What counts as heavy rehab?
The value the property is expected to have once the renovation is finished, often shortened to ARV. The loan is sized on what the property is worth before and after the work, so an after-repair value supported by sales of similar renovated homes nearby makes the deal easier to size.
It depends on the work. A fix and flip loan buys a property that needs renovation and releases the renovation money in draws as the work is done. A bridge loan is short-term financing on a property that needs little or no work, while you sell, lease it up or arrange a long-term loan. Fix and flip or bridge, compared.
Once it is renovated and rented, a long-term rental loan based on the property’s rent can replace the short-term loan. See our DSCR loans in Kentucky.
Yes. Business purpose loans such as fix and flip loans follow their own list of states, which is not the same as the list for home loans; a loan officer can confirm it for your property. Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Request a quote, or talk the deal through with a loan officer. Have a term sheet from another lender? See our Competing Offer Policy for Fix & Flip and Fix & Hold loans.
What happens next: a Fidelity Residential specialist will review your numbers and send tailored terms, usually within one business day. These programs are priced per deal and are subject to underwriting.
Business purpose investor loans are for investment property only.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on the property, your experience, credit and underwriting review and are subject to change without notice.
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