Project financing is structured differently from a traditional long-term mortgage because the loan is intended to support a defined investment cycle. Private lenders for real estate investors generally evaluate the property, project budget, expected value, and exit strategy to determine whether the financing fits the deal. For renovation and construction investors, understanding how the loan works from acquisition through repayment can make it easier to build an accurate project budget.
The first stage is acquisition. The investor purchases the property, or the land when pursuing a ground-up build. The lender evaluates the transaction and determines the appropriate financing based on the property’s value, project costs, and proposed strategy. The next stage is improvement or construction. Rather than necessarily providing the entire project budget as unrestricted cash, renovation and construction funds can be released through staged draws tied to completed work or milestones. This allows the financing to follow the project’s progress and gives the investor a clearer picture of available capital at each stage.
The final stages are stabilization and exit. Once renovation or construction is complete, the investor may list the property for sale or prepare it for rental. A sale can repay the short-term project loan from the proceeds. If the property is being held, the investor may refinance into longer-term financing after stabilization. When comparing private lenders for real estate investors, therefore, look at the entire lifecycle of the loan. Consider the purchase funding, renovation or construction coverage, draw schedule, interest treatment, loan term, closing speed, prepayment provisions, and acceptable exit options. The cheapest-looking loan may not be the best fit if its structure does not match the project’s timeline.
InstaLend’s fix and flip financing follows this project-based approach, with purchase and renovation financing, draw-based rehab funding, interest-only payments on drawn amounts, and sale or refinance as exit options. Qualifying fix and flip loans offer 12–18-month terms and no income verification.