What Is a Typical Loan Term for Fix and Flip Financing?

Fix and flip loans are short-term instruments designed to match the timeline of a renovation and resale project. Here is what to expect regarding loan terms.

Common Loan Terms

• 6 months: For fast-turnaround projects with minimal renovation scope — cosmetic updates, paint, flooring, and appliances
• 12 months: The most common term; covers most mid-range renovation projects in California
• 18 months: For larger renovation scopes, permit-required work, or markets where the listing and sales process takes longer
• 24 months: Available from some lenders for ground-up construction or major structural renovation

Matching the Term to the Project

Choose a loan term that gives you comfortable margin beyond your estimated project timeline. If you think the renovation will take 4 months and the sale will take 2 months, a 12-month term gives you 6 months of buffer. Underestimating the timeline and being forced to seek an extension adds cost.

Extension Options

Most fix and flip lenders offer extension options if you need more time — typically at a fee of 0.5%–2% of the loan amount and sometimes at a higher rate. Extensions are usually granted in 3–6 month increments.

The California Timeline

In Southern California, permitted renovation work can take longer than expected due to permit processing times in certain jurisdictions. Budget extra time for permitted projects in cities with longer permit queues.

A planning worksheet (illustrative example)

Month 1: close and finalize plans. Months 2–5: renovation, about four months. Month 6: punch list and staging. Months 7–8: listing and escrow. That is 8 months of work. Under a 12-month term, you have about 4 months of buffer, which is enough for one extension-sized delay without a fee. Under a 9-month term, you have 1 month, and a single delay in permits or sale would put you in extension territory.

Signs your term is too short

• The scope includes permit-required work and you have not talked to the city about review times.
• Your plan lists every task back to back with no slack.
• You depend on one contractor whose schedule you have not confirmed.
• You are targeting the seasonal market but your finish date falls after it.

The price of an extension (illustrative example)

Extensions are usually available in 3–6 month increments at 0.5%–2% of the loan amount. On a $400,000 loan, a 1% fee is $4,000 ($400,000 × 0.01), plus the interest during the extra months. A longer term from the start can cost less if the interest follows the balance outstanding, but ask whether a minimum interest period applies. Terms vary by program and borrower profile; we confirm the current guidelines when we review your scenario.

How the exit changes the term you need

If you plan to sell, your clock runs through listing and escrow. If you plan to refinance into long-term financing instead, add time for appraisal, underwriting and any seasoning the new lender requires. Choosing the term before you know the exit often leads to an extension, so decide the exit first and then size the term.

Frequently asked questions

If I sell early, do I pay for the unused months?

That depends on the loan. Ask about any minimum interest period or exit charge before you choose the term.

Do permitted projects automatically need an 18 month term?

No, but permit review times in some Southern California cities can be long. Choose the term from the permit schedule and the work, not a fixed rule.

Can I change the term after closing?

Only through an extension or a payoff and replacement, so choose carefully at the start.

Related guides

• Handling overruns and delays
• Hard money loan terms
• New construction and fix and flip
• How a fix and flip loan is structured
• Rates and points for fix and flip loans