Why the right documents matter for a fix-and-flip loan

Lenders want to know three things: you can buy the property, you can complete the renovation, and you can repay the loan. Clear, organized documentation demonstrates that your deal is viable and your repayment plan is reliable. Missing or incomplete paperwork is the most common cause of delays or denials.

Quick overview: loan features and typical eligibility

Fix-and-flip loans are short-term, project-focused loans designed to finance both the purchase and renovation of an investment property. Common features and eligibility points you should know before applying:

• Fast approval to keep deals moving.
• Flexible terms that can be tailored to your renovation timeline.
• Designed to cover both purchase and renovation costs in a single loan.
• Typical minimum credit score requirement: 620.
• Property must be non-owner-occupied (investment property).
• Experience in real estate is preferred but not always required.
• Minimum loan amounts often start around $100,000.
• Proof of financial stability and ability to repay is required.
• No bankruptcy filings within the past two years is commonly required.
• Most applicants receive approval within about 7–10 business days when documentation is complete.

Complete checklist: Fix and Flip Loan Documents you’ll need

Below is a thorough checklist of documents lenders typically request for fix-and-flip loans. Requirements vary by lender and project, but preparing these in advance will put you ahead.

Identity & personal documentation

• Government-issued photo ID (driver’s license, passport)
• Social Security number or Tax ID
• Completed loan application form (provided by the lender)

Credit & financials

• Authorization for credit report pull (some lenders do a soft pull for prequalification)
• Recent personal bank statements (typically 2–6 months)
• Business bank statements if applying through an entity
• Personal and/or business tax returns (usually 1–2 years)
• Proof of liquid reserves or proof of funds for down payment or closing costs
• List of assets and liabilities, including other properties

Property & transaction documents

• Purchase agreement or contract (fully executed)
• MLS listing and property data sheet (if available)
• Recent property photos, exterior and interior
• Title commitment or preliminary title report (if available)
• Preliminary property appraisal or comparable market analysis

Renovation & project documentation

• Scope of work (detailed description of renovations)
• Line-item renovation budget and cost estimates
• Contractor bids or signed contractor agreements
• Construction schedule and project timeline
• Permits already secured or a plan for obtaining required permits
• Before and after renderings or examples of intended finishes (optional but helpful)

Proof of experience & exit strategy

• Summary of prior projects (photos, before/after, financial results) if you have flip experience
• Business plan or investment plan for the property
• Exit strategy for the project — sale, refinance, or other

Insurance, legal & closing documents

• Proof of builder’s risk or renovation insurance (or a plan to secure it)
• Proof of homeowner’s insurance or plan for property insurance
• Entity documentation (LLC operating agreement, articles of organization) if using a business entity
• Power of attorney (if applicable)

Note: Some lenders offer a very quick initial review that may not require full documentation upfront. Final loan approval and closing will almost always require the supporting documents listed above.

How to prepare each document: best practices

Preparation is as important as the documents themselves. Lenders prefer clear, concise, and professionally presented materials.

Identity & financial documents

• Provide high-quality scans or PDF copies of IDs and bank statements.
• Label each file with a clear name (e.g., “John_Doe_Bank_Statement_Mar2024.pdf”).
• Explain any large, unusual deposits on bank statements with source documentation.

Tax returns & income

• Include all schedules that accompany your tax returns.
• If your income varies year-to-year, provide a brief written summary explaining fluctuations.

Renovation documents

• Get at least two contractor bids for major scopes of work; lenders favor multiple quotes.
• Provide a realistic timeline with milestones tied to draw requests.
• Include contingency line items (typically 5–15%) in the renovation budget for surprises.

Property documents

• Research comps in the neighborhood and prepare a one-page market analysis.
• Provide clear photos of structural concerns or roof/ foundation issues and proposed remedies.

Entity & legal docs

• If using an LLC, bring copies of formation documents and recent bank statements for that entity.
• Ensure the entity is properly insured and authorized to engage in the transaction.

Step-by-step application process

1. Initial contact and prequalification — this often involves basic info, property address, and a soft credit check or no-credit-pull prequalification.
2. Submit preliminary documents — purchase agreement, budget, proof of funds, IDs.
3. Lender scope review — the lender assesses the renovation plan, contractor bids, and exit strategy.
4. Underwriting and conditions — underwriters request any missing documents, confirm income/assets, and may order appraisal/title work.
5. Clear to close — once underwriting conditions are satisfied, the loan package moves to closing.
6. Funding and draws — initial funds for purchase are released; construction draws follow completion of agreed milestones and inspections.

Typical approval times vary, but many applicants receive loan approval within 7–10 business days when the required documents are ready and accurate.

Draw schedule and inspections: documents during the build

Fix-and-flip loans usually disburse renovation funds in draws tied to construction milestones. Prepare to provide:

• Invoices and contractor receipts for completed work
• Photos of completed stages
• Signed contractor statements certifying work completed
• Inspections or third-party verification that confirm each stage

Organizing invoices and photos by draw will speed up inspections and reduce funding delays.

Common pitfalls and how to avoid them

• Incomplete budgets: Provide detailed line-item budgets with contractor estimates — vague budgets trigger lender questions.
• Unclear exit strategy: Lenders want a clear plan for sale or refinance. Provide market comps and expected resale strategy.
• Weak contractor documentation: Use licensed, insured contractors with written contracts and timelines.
• Missing permits: Factor permit timelines into your schedule; lack of permits can delay draws.
• Poorly organized files: Use consistent file naming and a single shared folder for lender access (secure cloud folder).
• Underestimating reserves: Keep contingency funds available — lenders look at liquidity and reserves.

Special situations: applying as a first-time flipper or through an LLC

If you’re new to flipping, lenders typically want to see a conservative plan, solid contractor relationships, and reserves. Prior experience helps but isn’t always required if the project is well-documented and conservative.

When applying through an LLC or other entity, include entity formation documents, a bank statement for the entity, and ensure the entity is properly insured. Some lenders will require personal guarantees from the principals.

What happens after approval: closing, funding, and selling

Once approved, you’ll close on the loan and the initial purchase funds will be disbursed. During renovation, funds are released in draws as milestones are completed. After renovations, you execute your exit plan — most commonly selling the property. If you need more time, discuss extension options with the lender well before the loan term ends to avoid penalties.

Typical fix-and-flip loan terms range from 6 to 18 months, giving you time to complete renovations and market the property.

How to speed up approval: practical tips

• Pre-assemble a “deal package” with all documents labeled and in one digital folder.
• Use licensed contractors with clear contracts and references.
• Have a realistic budget and timeline with contingency funds.
• Respond promptly to information requests from underwriting.
• Provide clear explanations for any credit or income irregularities.

What lenders commonly look for in the renovation plan

Lenders evaluate the renovation plan for cost realism, timeline accuracy, and whether the planned improvements will produce a marketable property. Emphasize work that adds clear market value (kitchen, baths, flooring, curb appeal) and avoid speculative or highly personalized finishes that may reduce resale potential.

Cost control and protecting your investment

• Track every invoice and maintain a running budget vs. actuals sheet.
• Inspect completed work carefully before approving draws.
• Keep contingency funds intact until the final stage.
• Document unexpected changes with change orders and updated budgets.

When a project runs long: extensions and penalties

Construction delays happen. If you anticipate missing the loan term, contact your lender early to discuss extension options. Extensions often have fees or require updated documentation, so plan ahead to avoid costly last-minute solutions.

How to request a fix-and-flip loan quote

To get a personalized quote, prepare your basic deal package (purchase contract, budget, proof of funds, ID, and recent bank statements) and reach out to a loan specialist. Clear documentation and a realistic plan improve the accuracy and speed of your quote.

Get a personalized fix-and-flip loan quote today and find out how your project can move forward. Rates are competitive and vary based on your credit score, experience, and project specifics. Reach out for a personalized quote today.

Summary checklist: documents to have ready right now

• Photo ID and completed loan application
• Recent bank statements and proof of funds
• Purchase agreement
• Detailed renovation scope and budget
• Contractor bids or agreements
• Tax returns (1–2 years)
• Proof of insurance or plan to insure the project
• Exit strategy and comps

Frequently Asked Questions (FAQs)