Fix and Flip Loans in Florida: Short Money, Fast Exits, Real Costs

Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.

A fix and flip loan Florida investors use is short-term money priced for speed rather than for cost.

The rehab draw schedule, the exit timeline and the FHA flip rule on the resale all shape whether the project makes money. Our hard money page covers the lender type.

What a flip loan is

A twelve-to-eighteen-month loan covering purchase and rehab.

Interest-only payments during the term.

A balloon payoff at sale or refinance.

Lenders underwrite the property's after-repair value more than your income.

See our guide to hard money lenders in Florida.

How lenders size it

A percentage of the purchase price plus a percentage of the rehab budget.

Capped at a share of the after-repair value.

Your cash covers the gap and the reserves.

The cap protects the lender if the flip fails.

A conservative appraisal shrinks the loan.

The after-repair value appraisal

The appraiser values the home as if the planned work were complete.

Your scope of work and budget drive the figure.

See our guide to a low appraisal in Florida.

Over-improving for the neighbourhood does not raise the number.

Comparables set the ceiling.

Rehab draws

The lender holds the rehab funds and releases them as work completes.

An inspector confirms each stage.

You or your contractor front the cost until the draw arrives.

See our guide to construction-to-permanent loans in Florida for a similar draw process.

Draw delays stall projects.

Cost of the money

Rates run well above a mortgage.

Origination points are charged up front.

Extension fees apply if the project runs long.

Twelve months of carrying cost is a real line in the budget.

Speed is what you are paying for.

Permits and code

Unpermitted rehab work cannot be counted by the appraiser or the buyer's lender.

See our guide to unpermitted work and mortgages in Florida.

Florida code applies to roofing and electrical work as well as structural changes.

Permit everything.

The buyer's inspector will find what you skipped.

The FHA flip rule on resale

FHA will not insure a loan on a home resold within ninety days of purchase.

Between ninety-one and one hundred eighty days, a second appraisal may be required if the price rose sharply.

See our guide to the FHA flip rule in Florida.

Many Florida buyers use FHA, so the rule affects your buyer pool.

Plan the listing date around it.

Conventional and VA buyers

Conventional loans have no flip waiting period, but lenders review rapid appreciation.

VA appraisers scrutinise flips too.

Documented improvements support the new price.

Keep receipts and before-and-after photographs.

See our guide to FHA versus conventional in Florida.

Insurance during the rehab

A vacant, under-renovation home needs a builder's risk or vacant property policy.

Standard homeowners cover does not apply.

See our guide to Florida homeowners insurance cost.

Hurricane season raises the stakes on a half-finished roof.

Bind the policy before closing.

The exit

Sell to a retail buyer, or refinance into a rental loan and keep it.

See our guide to the BRRRR method in Florida for the keep path.

A slow sale burns carrying cost.

Price to move.

Have the refinance lender lined up as a fallback.

Florida-specific rehab items

Roof, impact windows and wind mitigation features sell homes here.

See our guide to the wind mitigation inspection in Florida.

A new roof lowers the buyer's insurance and widens the pool.

Older plumbing and panels fail the four-point inspection.

See our guide to the four-point inspection in Florida.

Buying the flip

Auctions and off-market deals supply discounts.

See our guide to buying a foreclosure in Florida.

Title issues are common on distressed property.

See our guide to title insurance in Florida.

Close with a title company even on a cash purchase.

Contractors and lien waivers

Florida's construction lien law lets unpaid contractors lien the property.

Collect lien waivers at every draw.

The Florida Statutes chapter 713 governs construction liens.

A lien at sale time stops the closing.

Pay through the title company where possible.

Taxes on flips

Flip profits are generally ordinary income, not capital gains.

Frequent flippers may be treated as dealers.

A 1031 exchange does not apply to flips held for resale.

See our guide to 1031 exchanges and financing in Florida for why.

A tax professional belongs on the team.

Entity and liability

Most flippers buy in an LLC.

Hard money lenders lend to entities routinely.

See our guide to trust and entity mortgages in Florida.

A personal guarantee is standard.

Insurance and the entity together limit exposure.

Reserves and the worst case

Hold cash for cost overruns, a slow sale and an extension fee.

See our guide to large deposits and source of funds in Florida.

A project that runs over becomes a rental if the refinance works.

If it does not, the lender forecloses.

Model the worst case before you buy.

Where to start

Build the budget with carrying cost, points and insurance included.

Line up both the flip lender and a refinance lender as the fallback.

Then start a conversation about the exit before you close the purchase.