Mortgage Programs › Specialty Loans › Fix and Flip Loans › What Are Typical Rates and Points for Fix and Flip Loans?

Fix and Flip Loans — Lendia California

What Are Typical Rates and Points for Fix and Flip Loans?

Fix and flip financing is more expensive than conventional mortgage financing — reflecting the short-term, high-flexibility nature of the product. Here is a realistic breakdown of what California investors should expect.

Interest Rates

Fix and flip rates in California typically range from 9% to 12%, depending on:

Borrower experience and track record
Loan-to-ARV and loan-to-cost ratios
Property type and location
Loan amount
Lender and current market conditions

Points (Origination)

Origination fees typically range from 1.5 to 3 points. On a $400,000 fix and flip loan, 2 points = $8,000. Points are paid at closing and reduce the effective return on the deal.

Other Costs

Underwriting and processing fees: $500–$1,500
Draw inspection fees: $100–$300 per draw inspection
Appraisal: $500–$900 for standard properties
Extension fees if the term is extended

The Real Cost in Context

On a 9-month fix and flip project with a $400,000 loan at 10% interest-only, total interest = $30,000. Add 2 points ($8,000) and you’re looking at $38,000 in financing costs. If the deal yields a $100,000 profit, that leaves $62,000 net — still a strong return. The higher rate is the cost of access, speed, and flexibility.

Rates: 9%–12%, Points: 1.5–3Fix and flip financing is expensive on a rate basis but is outstanding for short project timelines. Model the full financing cost into your deal analysis before committing.

How financing cost changes with the timeline (illustrative example, not a quote)

Project length	Interest at 10%	Points (2 points)	Total
6 months	$20,000	$8,000	$28,000
9 months	$30,000	$8,000	$38,000
12 months	$40,000	$8,000	$48,000

Each row uses a $400,000 loan with interest-only payments, assuming the full balance is outstanding. Real interest is lower while funds are still undrawn. The point is that every month of delay adds about $3,333 here ($400,000 × 0.10 ÷ 12), so schedule discipline pays.

Compare term sheets on these points

Rate and whether it is fixed for the term
Points and whether any are charged again on extension
Interest on drawn funds versus the full loan
Draw inspection fees, which run $100–$300 each on this page; six draws would be $600–$1,800
Minimum interest period, payoff or exit charges

Margin check before you commit

Subtract your financing cost, renovation, purchase price and selling costs from your expected sale price. If the remaining profit is thin, a month or two of delay can erase it. Many investors want a margin that survives a lower sale price and a longer timeline.

Profit check using the 9-month row (illustrative example, not a quote)

Say you buy for $350,000, renovate for $100,000 and sell for $600,000. Use the $38,000 financing cost from the 9-month row and 6% selling costs ($36,000 on a $600,000 sale). Total cost is $524,000 ($350,000 + $100,000 + $38,000 + $36,000), so profit is $76,000 ($600,000 − $524,000). Re-run the numbers with a 12-month timeline (financing $48,000) and profit falls to $66,000. The extra three months cost $10,000 in this example, which is why timeline control is a profit issue.

Frequently asked questions

Are points paid at closing or added to the loan?

Typically at closing, but arrangements vary. Ask whether points can be deducted from loan proceeds or must be paid in cash.

Does experience lower the rate?

It often helps. Borrower experience is one factor in pricing, along with leverage, property, location and loan size.

Is the rate fixed or does it change?

Most short-term investor loans are priced at a set rate for the term, but confirm this in writing because structures differ.