How to Finance a House Flip: Every Option Compared

Financing is what separates investors who flip one house from investors who flip ten. The deal itself might be strong, but if the capital structure is wrong, if the cost of money is too high, if the funding timeline doesn't match the acquisition window, or if the draw process stalls the renovation, even a good project can underperform.

Most new flippers assume there's one way to finance a flip. There isn't. There are at least six distinct approaches, each with different costs, speed, qualification requirements, and trade-offs. The right choice depends on your experience level, available capital, deal timeline, and how many projects you want to run simultaneously.

This guide walks through every major financing option, compares them on the factors that actually matter, and helps you match the right funding source to your next project.

Option 1: Fix-and-Flip Loans (Hard Money)

This is the standard financing tool for house flips, and it's what most investors use from their first deal through their hundredth.

A fix-and-flip loan is a short-term, asset-based loan that covers both the purchase price and renovation costs. The lender evaluates the deal based on the property's after-repair value (ARV), the borrower's credit and experience, and the project's viability. Funds for renovation are held in escrow and released through a draw schedule as work is completed and inspected.

Typical terms:

Loan-to-cost (LTC): Up to 85% to 90% of total project cost (purchase plus rehab). At Dominion Financial, fix-and-flip loans go up to 90% LTC and 75% of ARV, which means experienced investors may need as little as 10% of total project cost out of pocket.

Rates: 9% to 13% annually, depending on credit score, experience, leverage, and the lender.

Points: 1 to 3 origination points at closing.

Term: 6 to 18 months, with extension options available from most lenders.

Draw process: Rehab funds are released in stages as work is completed. The speed of draw funding matters more than most borrowers realize. A lender who takes two weeks to process a draw inspection creates cash flow gaps that slow the renovation and increase holding costs. Dominion Financial funds draws within 24 hours of inspection approval, keeping projects on schedule.

Best for: Investors at any experience level who want a structured process with dedicated rehab funding. Particularly strong for investors running multiple flips simultaneously because the lender's capital is scalable.

Drawback: Higher cost than other options. Interest and origination fees are a real line item in your project budget. For a detailed breakdown, see our fix-and-flip loan guide.

Option 2: Private Money

Private money comes from individual investors lending their own capital, secured by the property. Terms are negotiated directly between the borrower and lender, which creates more flexibility than institutional hard money but less consistency and scalability.

Typical terms:

Rates: 8% to 12%, though the range is wide depending on the relationship.

Points: 0 to 2.

LTV: Varies. Experienced borrowers with long-standing lender relationships may access higher leverage than institutional hard money offers.

Term: Negotiable. Usually 6 to 12 months for flip projects.

Draw process: Varies entirely by lender. Some private lenders release all rehab funds at closing. Others use a draw schedule similar to hard money. Some simply reimburse the borrower after providing receipts.

Best for: Investors with established relationships with individuals who have capital to deploy. The flexibility on terms and the potentially lower cost make private money attractive for investors who've built their network over time.

Drawback: Scalability. Individual lenders have limited capital. Running three or four flips simultaneously usually requires multiple private lender relationships or a mix of private and institutional funding.

Option 3: Home Equity Line of Credit (HELOC)

If you own a primary residence or another investment property with significant equity, a HELOC lets you borrow against that equity to fund a flip. The credit line is secured by the existing property, not the flip property, which means you can use the funds for any purpose including a cash purchase.

Typical terms:

Rates: Variable, typically tied to prime rate plus a margin. Currently in the 8% to 10% range depending on creditworthiness and the issuing bank. The Federal Reserve publishes current benchmark rates that drive HELOC pricing.

Points/fees: Minimal. Most HELOCs have low or no origination fees.

Credit limit: Up to 80% to 85% of the equity in the property securing the line, depending on the lender.

Term: Draw period of 5 to 10 years, repayment period of 10 to 20 years. For flipping purposes, you draw funds, complete the project, sell, and repay the drawn amount.

Best for: Investors with substantial equity in existing property who want the lowest cost of capital and the flexibility to use funds without a deal-specific approval process. A HELOC lets you buy properties with cash (making your offers more competitive) and pay interest only on what you've drawn.

Drawback: You're putting your existing property at risk. If the flip goes wrong and you can't repay the HELOC, the lender can foreclose on the property securing the line. Additionally, getting a HELOC requires conventional underwriting (income verification, DTI calculation, credit review), which takes 2 to 4 weeks and may not be available to self-employed investors with complex tax returns.

Option 4: Cash

Paying cash eliminates financing costs entirely. No interest, no points, no draw inspections, no lender approval process. You buy the property, renovate it, sell it, and keep the full profit without sharing any of it with a lender.

Best for: Investors with significant liquid capital who are focused on a single project and want to maximize per-deal returns. Cash offers also close faster and are more attractive to sellers, which can help you win competitive deals at better prices.

Drawback: Capital efficiency. The money tied up in one cash deal can't be used for anything else until the project is sold. An investor with $300,000 in cash can fund one flip at a time, or they can use that same $300,000 as down payments and reserves across three to four leveraged flips running simultaneously. Leverage reduces per-deal returns but increases total portfolio returns when deployed across multiple profitable projects.

The opportunity cost math matters: if you can flip three houses in 6 months using leverage and make $40,000 each ($120,000 total), that outperforms flipping one house with cash and making $65,000, even after accounting for financing costs.

Option 5: Partnerships and Joint Ventures

In a partnership structure, one party provides the capital (or the credit to secure financing) and the other provides the expertise, project management, and deal sourcing. Profits are split according to the partnership agreement, typically 50/50 though the split varies based on what each party contributes.

Typical structures:

Capital partner + operating partner: The capital partner funds the deal (or guarantees the loan), and the operating partner finds the deal, manages the rehab, and handles the sale. Profits are split at close.

Equity JV: Both parties contribute capital in defined proportions and split profits accordingly, with the managing partner often receiving a promoted return for handling execution.

Best for: New investors who have deal-finding ability and rehab management skills but lack capital or credit. Also useful for experienced investors who want to scale beyond their personal capital capacity without taking on institutional debt.

Drawback: You're giving up a significant portion of the profit. A 50/50 split on a $60,000 profit means you net $30,000 instead of the full amount. Partnerships also introduce operational complexity: disagreements about renovation decisions, timeline, pricing, and budget can derail a project if roles aren't clearly defined in the partnership agreement upfront. The Small Business Administration (SBA) provides guidance on structuring business entities, which is relevant for formalizing partnership arrangements.

Option 6: Conventional Renovation Loans

Products like the FHA 203(k) and Fannie Mae HomeStyle loan allow buyers to finance both the purchase and renovation of a property through a single conventional mortgage. These are typically used by owner-occupants, but investors can access HomeStyle loans for investment properties in some cases.

Typical terms:

Rates: Conventional mortgage rates, currently in the high 6% to 7% range for investment properties.

Down payment: 15% to 25% for investment properties.

Rehab funding: Included in the loan, managed through a draw process with HUD-approved inspections.

Term: 15 to 30 year mortgage.

Best for: Investors planning a longer hold or live-in flip (buying a property as a primary residence, renovating while living in it, and selling after meeting minimum occupancy requirements).

Drawback: Slow. Conventional renovation loans take 45 to 60 days to close, which makes them impractical for competitive acquisitions. The renovation process is heavily regulated, requiring licensed contractors, detailed scopes of work reviewed by the lender, and multiple inspections. Most active flippers find the process too slow and restrictive for time-sensitive projects.

Cost Comparison: Financing a $200,000 Flip

To make these options concrete, here's what financing costs look like on a hypothetical deal: $150,000 purchase, $50,000 rehab, $280,000 ARV, 6-month hold.

Fix-and-flip loan (90% LTC): Loan amount: $180,000. Cash in: $20,000 (plus closing costs and reserves). Interest (11% for 6 months): ~$9,900. Origination (2 points): $3,600. Total financing cost: ~$13,500.

Private money (80% LTV on purchase, full rehab funded): Loan amount: $170,000. Cash in: $30,000. Interest (10% for 6 months): ~$8,500. Origination (1 point): $1,700. Total financing cost: ~$10,200.

HELOC: Draw: $200,000. Cash in: $0 (beyond existing equity). Interest (9% variable for 6 months): ~$9,000. Origination: ~$0. Total financing cost: ~$9,000.

Cash: Cash in: $200,000. Total financing cost: $0. Opportunity cost: the returns you could have earned deploying that $200,000 across multiple leveraged deals.

The cheapest option isn't always the best option. A flip financed with a HELOC costs less in interest than a fix-and-flip loan, but it also puts your primary residence at risk and requires you to qualify through conventional underwriting. A fix-and-flip loan costs more but provides a dedicated structure for the project, protects your other assets, and scales to multiple deals.

Can You Flip a House with No Money?

Technically, yes, though "no money down" requires significant trade-offs.

100% financing from a fix-and-flip lender: Some lenders offer up to 100% of the purchase price for experienced borrowers on deals with strong ARV margins. You'll still need cash for closing costs and reserves, so "no money down" is more accurately "minimal money down." Dominion Financial offers up to 100% LTC for qualified borrowers, covering the full acquisition and rehab budget on deals that meet ARV guidelines.

Partnership: If a capital partner funds the entire deal and you contribute the labor and expertise, your cash outlay can be zero. Your return is a share of the profit rather than the full amount.

Seller financing plus private rehab money: In rare cases, a seller will finance the purchase and a private lender will fund the rehab, leaving the investor with no cash in the deal. This requires a motivated seller and a private lender willing to take a second-lien position.

The reality is that most successful flippers bring some cash to every deal, even if it's a small percentage of the total cost. Having capital in the project aligns your incentives with the lender's and gives you a financial cushion for surprises.

Choosing the Right Financing for Your Situation

First flip, limited capital: Fix-and-flip loan with a lender who works with newer investors. Pair it with a mentor or experienced contractor to reduce execution risk. The higher financing cost is worth the structure and oversight that come with a formal lending relationship.

Experienced flipper scaling to multiple projects: Fix-and-flip loans for the bulk of your pipeline, supplemented with private money for deals that need creative structuring. The combination gives you scalable institutional capital plus flexibility for off-market opportunities.

Significant equity in existing property: HELOC as a revolving capital source, used to fund acquisitions with cash offers (which win more deals) and renovation costs. Replenish the line after each sale. This approach works well for investors doing 2 to 4 flips per year in markets where cash offers provide a meaningful competitive advantage.

High cash reserves, low volume: Cash for a single project at a time, with financing reserved for situations where you want to run multiple projects simultaneously or preserve liquidity. For more context on structuring flip deals, see our article on flip investment opportunities in 2026.