Choosing a lender for a renovation project involves more than finding the lowest quoted rate. Investors need financing that fits the purchase, renovation budget, construction timeline, and eventual exit. Real estate investment lenders can offer project-based financing, but the terms and process can differ significantly between lenders. Comparing the complete structure before committing can help you avoid a financing gap halfway through the renovation.
Start by looking at how the lender evaluates the property. For a fix and flip, the purchase price, current condition, renovation costs, and after-repair value are important. You should also understand how much of the total project cost can be financed and how renovation funds are released. A draw schedule may provide funds as specific stages of the work are completed, so knowing the inspection and documentation requirements ahead of time can help your contractor plan the project. Written bids and an accurate scope of work are especially useful when building the initial budget.
Next, compare the practical terms. Ask real estate investment lenders how quickly they can close, whether income verification is required, what loan term is available, whether there are prepayment penalties, and what they expect from the borrower or contractor. You should also consider the exit strategy before choosing the loan. If the plan is to sell, the expected resale value and market conditions matter. If the plan is to rent after renovation, you need to understand how the short-term loan will be repaid or refinanced once the property is stabilized. A contingency reserve should also be included because renovation projects can uncover unexpected costs.
InstaLend’s fix and flip financing is asset-based and does not require income verification. Qualifying projects can receive up to 95% of total project cost, with purchase and rehab combined, and renovation costs are disbursed through a draw schedule as work progresses.