Fix and Flip Loans From a California Direct Lender
The property is under contract, the seller wants to close in ten days, the kitchen is from 1978, and no bank will finance it in that condition on that timeline. A fix and flip loan finances the purchase and renovation of a property that will be resold after the work is complete, and it exists for exactly this situation. PB Financial Group has funded fix and flip projects across Southern California and the rest of the state since 2006, lending directly rather than brokering files to someone else, and we are used to being the call an investor makes when a bank has already said no.
Our fix and flip loans are secured by the property being purchased and are underwritten on the purchase price, the renovation budget, and the realistic resale value. Experienced flippers and first-time investors both qualify, although the structure differs. Call (877) 700-3703 with the address and your numbers and we will tell you quickly whether the project works.
How Fix and Flip Financing Works
The loan covers a percentage of the purchase price at closing, with the renovation budget held in a controlled account and released as work is completed. This is the draw structure. The investor submits proof that a phase of work is done, we confirm it, and the funds for that phase are released, which protects the project and keeps the budget honest.
Terms are short, typically twelve months, because the plan is to sell. Payments are interest-only so that carrying costs stay low while the property is off the market. When the property sells, the loan is paid from escrow and the investor keeps the difference between the sale price and the total of purchase, renovation, carrying costs, and selling costs.
The number that drives everything is the after-repair value, or ARV. We look at comparable sold properties in the immediate area to confirm that the ARV the investor is projecting is achievable, and we size the loan so that there is room for the project to run over and still pay off. A flip that only works if everything goes perfectly is not a flip we want to fund.
What Makes a Fix and Flip Project Fundable
Purchase price relative to ARV is the first screen. The classic rule that total cost should land at or below seventy percent of ARV is a useful starting point, and we will discuss where a specific project falls. In expensive Los Angeles and Orange County neighborhoods the percentages shift, but the principle that the deal has to leave a margin after every cost does not.
The renovation scope and budget come next. A line-item budget with contractor bids is far more fundable than a round number, and a scope that matches the neighborhood matters just as much. Over-improving a property for its street is one of the most common reasons a flip loses money, and we will say so if we see it.
Experience affects how much of the project we will finance, but it does not decide approval. An investor with several completed flips can expect more of the purchase and rehab to be financed; a first-time investor will typically bring more cash to closing and may be asked to work with a licensed general contractor. Credit score is not the deciding factor on either file, which is why many investors who were declined elsewhere close with us.
Budgeting a Flip: The Costs Beyond Purchase and Renovation
New investors tend to budget for the purchase and the rehab and forget everything else. Carrying costs include the loan interest for every month the property is held, property taxes, insurance on a vacant or under-construction property, and utilities. Selling costs include the listing commission, the buyer’s agent commission, escrow and title fees, and any concessions the buyer negotiates after inspection.
A realistic pro forma for a Southern California flip also includes a contingency for the renovation, commonly ten to fifteen percent of the budget, and a cushion of one to two months of carrying costs in case the sale takes longer than planned. When we review a project we rebuild this pro forma with the investor. The exercise regularly turns a deal that looked like a $60,000 profit into a $20,000 profit, and occasionally into a loss, and it is far better to learn that before closing than after.
The investors who do well over many projects are the ones who treat the pro forma as a tool rather than a formality. They buy at a price that leaves room, keep the scope matched to the street, and sell at a price the comparables support. We fund that kind of investor at every experience level.
Fix and Flip Lending in Los Angeles, Orange County, and San Diego
Every Southern California market has its own quirks. A Los Angeles flip can hinge on how long the permit office takes, whether an older building needs a soft-story retrofit, or whether there is room to add an accessory dwelling unit before resale. Projects in Orange County tend to carry higher purchase prices and a buyer pool that expects finished work to match the neighborhood, while flips in San Diego often turn on small multifamily and the coastal review process. We have financed projects in all three markets, and the process is the same from any of them: send us the address, the numbers, and your timeline, and we will tell you quickly whether it works.
Typical Fix and Flip Loan Terms in California
Fix and flip loans with PB Financial Group generally range from $100,000 to $5,000,000 with a twelve-month term, and extensions are available when a project runs long for a documented reason. Payments are interest-only, with the balance repaid from the sale or from a refinance if the investor decides to keep the property. Eligible properties include single-family homes, two-to-four unit buildings, condominiums, and small multifamily.
Renovation funds are held in a controlled account and released by draw as each phase of work is verified, which protects both the investor and the lender and keeps the budget honest. First-time investors and experienced flippers both qualify; how much of the purchase and renovation we finance depends on the strength of the deal and the investor’s track record. A first-time investor typically brings more cash to closing and may be asked to work with a licensed general contractor.
Rates and points are quoted per project in writing with full disclosures. A fix and flip loan can close in as few as five business days when title, insurance, and valuation are in order, and seven to fourteen days is typical. We confirm every figure after reviewing the address, the budget, and the comparables.
| Parameter | Typical range |
|---|---|
| Loan amount | $100,000 to $5,000,000 |
| Term | 12 months, extensions available |
| Payment structure | Interest-only, balloon at sale or refinance |
| Renovation funds | Controlled account, released by draw as work is verified |
| Property types | Single-family, 2 to 4 units, condos, small multifamily |
| Experience | First-time and experienced investors; financed share varies with track record |
| Time to close | As fast as 5 business days; 7 to 14 days typical |
Why Banks Decline Fix and Flip Properties
A conventional lender needs the property to be habitable, to appraise cleanly, and to fit a long-term loan that can be sold into the secondary market. A house with a failed roof, an unpermitted addition, or a kitchen torn down to the studs fails the first two tests, and a twelve-month loan with a renovation budget fails the third. The bank is not being difficult; the product does not exist on its shelf.
Banks also underwrite the borrower’s income against all existing debt, which penalizes investors who already carry several properties or who show heavy write-offs on their returns. Private lending reverses the order: the property and the plan come first, and the borrower’s financial picture is reviewed for the exit rather than as a gate. That is why fix and flip investors in California finance with lenders like PB Financial Group rather than with the bank that holds their checking account.
Fix and Flip Versus Rehab and Rental Financing
Fix and flip financing is built around a sale. If the plan is to renovate and keep the property as a rental, the better path is a renovation loan followed by a long-term rental loan; our rehab hard money loans page covers renovation financing for properties you intend to hold or already own, and our rental property loans page covers the permanent financing that follows. The two structures differ in term, draw handling, and exit, so choosing the right one at the start saves money.
Investors who are not yet sure whether they will sell or hold can start with a fix and flip structure and refinance into a rental loan if the market changes their mind. We underwrite with that flexibility in mind. What we ask is that the borrower tells us the most likely plan up front so the term and the draw schedule fit it.
Why Southern California Investors Choose PB Financial Group
We are a direct lender, licensed with the California DRE and NMLS, and we have funded more than 2,400 transactions across all 58 California counties. A direct lender decides and funds in-house, which is why we can commit to a close in days rather than weeks. Our closed transactions page shows the kind of projects we fund.
Investors also stay with us because we are honest about deals that do not work. We would rather pass on a thin flip than fund it and watch an investor lose money, and borrowers remember that when the next good project comes along. The owner has been personally involved in the lending decisions since the company started; you can read more on our meet the owner page.
How to Apply for a Fix and Flip Loan
Call (877) 700-3703 or complete the form on our apply now page with the property address, purchase price, renovation budget, and your projected ARV. We review the comparables and the scope, usually within a day, and respond with a term sheet if the project qualifies. Escrow, title, valuation, and insurance follow, and funding typically occurs within two weeks of the first conversation.
Frequently Asked Questions About Fix and Flip Loans
Who are the best fix and flip lenders in Southern California?
The right fix and flip lender for a project is a direct lender that funds in-house, understands the local resale market, and is licensed in California. Those three things determine whether the loan closes on the date promised and whether the lender’s read on the after-repair value is realistic. PB Financial Group has been a direct fix and flip lender in Los Angeles and throughout Southern California since 2006, is licensed with the California DRE (01522495) and NMLS (357614), and has funded more than 2,400 transactions.
Can I get a fix and flip loan with no money down?
Fix and flip loans require some cash from the investor at closing. The amount depends on the purchase price relative to after-repair value and on the investor’s experience. Experienced investors with strong deals can have a large share of both purchase and renovation financed, while first-time investors should expect to bring more. A deal that only works with nothing down is usually a deal that does not work.
Can a first-time investor get a fix and flip loan in California?
Yes. PB Financial Group funds first-time fix and flip investors regularly. A first-time investor typically brings more equity to closing and may be asked to use a licensed general contractor, but a lack of prior flips does not disqualify a project with sound numbers. A realistic budget, a scope matched to the neighborhood, and a resale price the comparables support matter far more than a track record.
How is a fix and flip loan amount calculated?
The loan is sized from the purchase price, the renovation budget, and the after-repair value supported by comparable sales in the immediate area. The lender confirms that total project cost leaves a margin after carrying and selling costs. Renovation funds are held in a controlled account and released by draw as each phase of work is verified, so the full budget is committed at closing but paid out as the work is done.
What is the difference between a fix and flip loan and a rehab loan?
A fix and flip loan is structured around reselling the property after renovation, with a short term and an exit through the sale. A rehab loan finances renovation on a property the investor already owns or intends to keep, and it is usually followed by long-term rental financing rather than a sale. The two differ in term, draw handling, and exit, so telling the lender the real plan up front leads to the right structure.
Discuss Your Fix and Flip Project With PB Financial Group
Bring us the address, the purchase price, the budget, and your target resale value, and we will give you a direct answer. Call PB Financial Group at (877) 700-3703 or contact us online. We have been funding California flips since 2006 and we look forward to seeing your next one.
