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How to Get a Loan for House Flipping

How to Get a Loan for House Flipping

A successful fix and flip will involve risk, but the reward is exponential. How you approach that risk is what makes or breaks the deal, which is why the first step to a successful fix and flip is to choose the right lending partner. Once you’ve established a relationship with your lender, it’s time to get to work.

Common Expenses in Fix-and-Flip Investments

Before you think about how to get a loan for house flipping, know the costs that go into a fix-and-flip project. It might seem straightforward at first, but it takes a keen eye for detail to recognize the work and potential of a flip. 

So, calculate the costs you have to cover. Start with real estate itself and the improvements you plan to make. From there, review your cash flows to determine when money goes into and out of your bank account.

Here are some of the most common expenses for a real estate flip. 

Repairs, Renovations, & Improvements

When you want to renovate and flip a property, it requires labor, equipment, and materials. On top of that, distressed properties often require junk removal or even demolition. 

As you map out your project, remember that everyone runs into hiccups during a project. It happens for veterans and newcomers alike, but there’s always a way to work through the struggle. 

Don’t let those unexpected hurdles chip away at your budget and your profit. Maintain a cushion for yourself in a reserve fund to give yourself that wiggle room. 

Utilities & Monthly Costs

Often, real estate investors pay out utilities, ranging from water and gas to sewage and trash. If you aren’t sure about the average expenses in your project area, check with a local utility provider. 

Utility providers offer helpful insights to minimize your costs and make recommendations. For example, solar panels or smart thermostats can regulate your power expenses. 


We all know how quickly the weather can change in the Gulf Coast area. Insurance coverage gives you a safety net in unfortunate yet unpredictable situations. It helps to protect your investment from natural disasters, accidents, and other concerns. 

Check with your insurance company to see what coverage they can provide. Distressed properties are a higher risk for them, so you might need a separate policy. 

Miscellaneous Expenses

You can’t predict every expense without the details. Map out your project as much as possible so that you have a clear road map and a nice cushion. 

For example, you might not want to change the floor now, but it might look a little better with natural stone tile instead of hardwood. That change means additional labor and materials to calculate. 

Alternatively, say you uncover a mess of rotten wood in a room that you didn’t plan to replace. Your cushion protects your profit from such unexpected expenses. 

Who Offers Funding for Investment Projects?

Different lenders offer different loan programs that may or may not be a good fit for your project. 

Here are a few common categories of lenders: 

  • Traditional lenders: Credit unions, banks, and other financial institutions 
  • Hard money lenders: Private lenders
  • Crowdfunding sites: Services that allow you to solicit funds from a pool of investors
  • Fintech services: App-based lenders

General Loan Types for Flipping Houses

The traditional types of loans, like the average 15-30-year mortgage, aren’t ideal for a short-term flipping.

As you wonder how to get a loan for house flipping, here are your best options: 

  • Hard money loans: These loans are short-term and based on a different value model from other loans. Typically, they come from an investor group or a private lender. 
  • Cash-out refinancing: With a cash-out refinance, you can capitalize on the equity built up in a property. It provides you with cash in exchange for a larger mortgage, meaning you can borrow more than what you owe and keep the difference. 
  • Home equity lines of credit: A HELOC is a second mortgage that lets you borrow money against the equity of your current home. You obtain access to the funds as a line of credit. 

Not sure which option is right for you? Work with a lender you trust to explain what’s available and provide sound advice for your investment. 

How to Get a Loan for House Flipping in Texas

Many lenders offer a way to ease into the fix-and-flip world. The key here is to find the right property and the right lender for you. 

Think about the benefits of each option. Do they offer the support or personalized service you need? Does the lender provide any type of coaching to help you with your investment?

Service is key, and a good lender provides more than just a loan.

The Bottom Line: Get a Partner 4 Life

There are plenty of opportunities for real estate investors to finance a flip. Before you apply for a loan, do your research and get to know your lender. At King James Lending, we value our community and want every investor we work with to become a Partner 4 Life

That’s why we provide personalized coaching to our clients. We aim to help you make the most of your investment. 

Ready to see how to get a loan for house flipping with King James? Our process is simple and reliable, designed to help you close a deal fast. Contact our team today to fund your next project!