Capitalizing on California's Real Estate Market: Fix and Flip Loans

Niv Ovadia
September 21, 2022
Est. Reading: 6 minutes
Fix and Flip Loans California

California is known as the state of opportunity, but it doesn’t come without challenges. It seems that the majority of California residents post-COVID pandemic have come to the realization that the best method to financial freedom is through real estate.

That’s a fantastic and mostly true realization. But the entrance into that path is a competitive one and on top of that cut-throat. Many real estate investors and property managers in California participate in a very common project called “Fix and Flip investment properties”. 

Whether you go with a private California mortgage lender or an institutionalized bank, it’s important you equip yourself with the fundamentals to tackle these profitable projects head-on. 

That’s why we created this informative guide on everything you need to know about fixing and flipping houses in the California real estate market. 

Fix and Flip Loans California

What is a Fix and Flip Loan?

Fix and Flip loans fall under the category of “Bridge Loan” type loan programs. These are usually short-term financing solutions that real estate investors use to buy a property at a profitable rate and then “fix up” and resell. 

Better known as “house-flipping” there’s a good chance that you watched a lot of TV shows that showcase the process and profits of doing this type of real estate investment. 

While the profits are definitely evident, it’s a tedious process that requires a good amount of experience and dedication to the real estate industry. This leads to another point as to why most investors looking at a Fix and Flip property most commonly use a private money lender instead of an institutionalized bank. 

Some reasons why most people tend to lean towards private lenders: 

  • More interested in investor success than profits (when the buyer succeeds the lender succeeds) 
  • More personalized loan deals 
  • Quicker financing (usually within 7-10 business days)

Fix and Flip loans tend to come with higher interest rates due to the riskiness of the project itself, but it can vary depending on borrower experience and project details. 

Fix and Flip Loans California

It’s important to shop around between multiple different lenders to compare and contrast the best loan option for your project needs. 

The most common types of fix and flip properties in California are residential properties. These properties are found either in auction or foreclosure from insider knowledge and research. When interested investors find the perfect profitable property, they then create a project plan to renovate or completely demolish the land itself. 

There are so many options when it comes to Fix and Flip financing, and we highly recommend that you read on to get a better understanding of the specifics in regard to the California real estate market. 

Fix and Flip Loans California Rates

The California loan rates for fix and flip real estate property loans differ depending on the lender themselves and the location of the property. 

Because fix and flip loans are extremely short-term and risky in nature, the interest rates, depending on the lenders themselves, can range from 7.5% - 12%. 

With Professional Mortgage Associates, as of September 19th, 2022 fix and flip loan rates for Los Angeles and the surrounding cities within California lie within 7.5% 

To get the best rate possible, it’s important that future investors work towards these three goals which will GREATLY reduce the stress within this process: 

  1. Learn to draft a detailed project plan or hire a professional 
  2. Get all your finances in order beforehand 
  3. Build a great credit score and purchase price history

If you can repeat these steps, for at least 3 different lenders, not only will it show maturity in the real estate financing industry but also will provide you with the most likely profitable loan deal for your fix and flip property. 

That’s the name of the game when it comes to real estate. Profits. Profits. Profits. Research as much as you can before you make such a big decision with your finances, especially in California which has such a competitive market. 

5 Best Fix and Flip Loan Types 

Every borrower has different project requirements and financial needs. Because of this, loan types were created to satisfy specific categories of transactional processes that would assist the borrower in profitably completing their project. 

At the end of the day, it’s a cat-and-mouse game on who can find the best fix and flip loans and who can match the borrower's expectations best. 

To give you a better understanding of what you’re most likely going to see when heading into the loan world, here is a list of the 5 best (and most common) forms of loans for fix and flip projects: 

Hard Money Loans

Usually given out by California private lenders, getting a hard money loan for a fix-and-flip project can provide a lot of benefits. From a profitability standpoint, getting this type of loan usually closes within 7-15 business days (which means quick funds) and doesn’t typically require a personal income qualifier. You’re more likely to work with a lender that is focused on your success rather than profits when going with this route.

Cash-Out Refinance

This one is for the borrowers that have an independent property that they can use to take cash out from a property refinance to put towards the fix and flip project. This loan usually encompasses a higher loan amount (around $2-3 million) depending on the project. When looking at these types of loans it's extremely important to focus on the LTV (Loan-to-value) provided by each lender.


You probably see these abbreviations everywhere and have no idea what it actually means. Both HEL (Home Equity Loan) and HELOC (Home Equity Line Of Credit) are the safest options for borrowers when working on a fix-and-flip project mainly due to the low-interest rates that come with this loan type (starting at around 2.5%).

With such security comes a cost though, which is the maximum loan amount being usually up to $100,000. On top of this, these loan types can usually be as long as a 12-year loan term. This type could have an article all to itself to cover the vast information around them.

Investment Property LOC 

LOC stands for Line of Credit, this type of loan provides a streamlined process for borrowers to complete their fix and flip projects. After profits are made, there is a revolving line of credit that can be rolled into the next project.

Fix and Flip Loans California

These types of loans are broad in nature, spanning a loan amount of $1 million - $50 million. The interest rates for these types of loans start at around 5% and the loan term can last as long as 2 years. 

Bridge Loans 

Bridge loans are known to be a riskier choice of loan for a more experienced borrower. This type of loan has a good amount of profit around it but due to the loan turnaround time being so short (usually 45-60 days) and the interest rates being so high (up to 9.5%) depending on the lender, it benefits lies in a direct relationship with an experienced lender and borrower. 


Many people believe their ticket to financial freedom lies within California’s real estate market, whether it be getting a fix and flip project, a home renovation project, or a ground-up construction project

The real estate industry, especially post-pandemic, is as volatile as it’s ever been and there is a lot of money to be capitalized on. Don’t be fooled by the golden ticket, it’s still a competitive and cut-throat market that requires incredible dedication, just like anything in life that has the potential to make a good living. 

Because of this, it’s more important now than ever to have a trusted lender by your side during your projects.

Whether it be to find the best rates and loan types possible for your transactions, getting an expert opinion and referral within the network, or just having a business partner throughout the real estate financing process a mortgage lender is a MUST-HAVE contact. 

We at Professional Mortgage Associates view ourselves as just that, a business partner. We value being a one-stop-shop lending organization that uses our vast network of professional contacts within the real estate industry to streamline the process of fixing and flipping projects all the way to first-time home buyers. 

We highly recommend checking out all of our resources for borrowers looking to expand their knowledge (and pockets) during California’s most pivotal real estate market!

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