- LoanFunders.com Newsletter
- Posts
- Fix-and-Flip Loans vs. Hard Money: Which Funding Moves Faster in a Tight Market?
Fix-and-Flip Loans vs. Hard Money: Which Funding Moves Faster in a Tight Market?
George Tsividakis
May 21, 2025
When sellers demand 10-day closings and inventories vanish overnight, the speed of your capital can make—or break—the deal. Let’s pit two popular funding options head-to-head and see which really gets you to the closing table first.
1 | The Two Contenders—Quick Definitions
Fix-and-Flip (Bridge) Loan | Traditional Hard-Money Loan | |
|---|---|---|
Core Purpose | Purchase + rehab of 1-4 unit properties | Any short-term, asset-based real-estate loan |
Typical Source | Specialized private lender (LoanFunders.com) | Local or regional hard-money shops |
Term Length | 12–18 months | 3–12 months |
Advance Rate | Up to 90 % LTC + 100 % rehab | 65–70 % ARV (draws vary) |
Underwriting Focus | Borrower experience, ARV, detailed budget | Asset value; limited doc |
Exit Expectation | Refinance or retail sale after rehab | Refinance or sale ASAP |
Key overlap: Both are short-term, interest-only, designed for value-add projects. The real difference is funding speed and structure—especially critical when listings get multiple offers in 24 hours.
2 | Speed Metrics That Matter
Stage | Fix-and-Flip Loan (LoanFunders.com) | Standard Hard Money | Why the Gap? |
|---|---|---|---|
Term Sheet | 1 business day with full doc packet | 2–3 days | Up-front budget & comps accelerate underwriting |
Appraisal / BPO | Full appraisal (7–10 days) | Full appraisal (7–10 days) | Desktop model meets internal risk policy |
Title & Legal | In-house team orders day 1 | Broker/borrower orders | Parallel processing saves 2+ days |
Draw Schedule Setup | Auto-generated from line-item budget | Negotiated post-close | Clear rehab scope pre-closing |
Typical Closing Timeline | 10–15 business days | 15–30 business days | Combined efficiencies above |
Tight-market takeaway: A five-day edge can be the difference between winning and losing the bid.
3 | Cost vs. Certainty
Cost Component | Fix-and-Flip Loan | Hard Money Loan |
|---|---|---|
Rate | 8.79 – 11.50 % (credit & experience tiers) | 11 – 14 % (flat) |
Origination | 1-2 pts typical | 2–4 pts |
Junk Fees | Minimal (doc prep, draw fee) | Varies; some charge servicing & exit fees |
Rehab Funds | 100 % financed, draws within 48 hrs of inspection | 90–100 % financed, draw approvals 3–5 days |
Yes, both products cost more than conventional debt—but cost is moot if you can’t close at all.
4 | Underwriting: What Gets Looked At?
Factor | How Fix-and-Flip Lenders View It | How Hard-Money Lenders View It |
|---|---|---|
Borrower Experience | Tiered LTC: 90 % for 3+ flips, 85 % for 1-2, 70 % for first-timers (need 700 FICO) | Less weight; leverage still capped by ARV |
FICO Score | ≥ 660 (better pricing ≥ 700) | Often ignored, but can raise rate |
Detailed Scope & Budget | Required up front | Sometimes accepted post-close |
Exit Strategy | Must be realistic (refi terms, retail comps) | Broad; “sell or refi” often sufficient |
Speed secret: The more information you provide up front, the fewer “back-to-drawer” delays later.
5 | Case Study—Winning by 48 Hours
Property: 3-bed SFR, $320 K purchase, $55 K rehab, ARV $475 K
Competing Offers: All-cash investor (7-day close) vs. borrower using LoanFunders.com fix-and-flip
Day 1: Borrower uploads full doc packet; term sheet in hand by 4 p.m.
Day 2: Desktop appraisal ordered; title search launched simultaneously.
Day 5: Clear title; appraisal returns at $480 K ARV.
Day 8: Closing docs signed; seller chooses borrower’s offer because proof-of-funding showed firm closing date.
The hard-money competitor projected a 13-day closing. Result: Borrower locks deal, completes rehab, nets $72 K profit at resale.
6 | When Hard Money Still Wins
Extreme Credit Issues: Sub-620 FICO and zero flip history.
Non-Standard Collateral: Rural land, tiny homes, or properties outside lender footprint.
Ultra-Short Loans: 30–60-day bridge where appraisal waiver isn’t an option.
If you fit these boxes, a local hard-money shop may be your only play.
7 | Timing Tips for a Tight Market
Pre-Underwrite Your Budget: Line-item costs + contractor bids before you make offers.
Aim for DSCR-Ready ARV: Plan exit refinance numbers to show lender (boosts confidence).
Order Rush Title: $150 extra can save three days.
Use E-Sign & Remote Online Notary: Skip in-person closings.
Have Reserves Ready: Proof-of-funds screenshot (liquid) speeds final sign-off.
8 | How LoanFunders.com Gets You There First
Feature | Investor Benefit |
|---|---|
24-Hr Term Sheets | Make offers with confidence. |
Desktop/Hybrid Valuations | Shrink appraisal timeline. |
100 % Rehab Funding | Preserve your cash for more deals. |
Draws in 48 Hrs | Keep crews moving; finish faster. |
Experience-Based Pricing | Graduated LTC & rate rewards repeat flippers. |
Brokers: White-label the entire process, earn points, and use our speed as your competitive edge.
9 | Key Takeaways
Fix-and-flip loan structures—when paired with streamlined underwriting—deliver closings 2–5 days faster than traditional hard money.
In multiple-offer markets, that gap can be decisive.
Hard money still has a niche for credit-challenged borrowers and quirky properties, but costs and speed often lag.
The fastest route is preparation plus a lender engineered for speed—exactly what we do at LoanFunders.com.
Ready to Win More Bids?
Get a term sheet in 24 hours and close in as little as 7 business days—before the other offers even schedule appraisal.