Fix and flip loans, also known as short-term bridge loans, can help investors alleviate the burden of home improvement expenses, which might range from minor renovations to a complete reconstruction. These loans are generally 12- to 18-month loans and start at $50,000. Two key factors lenders look at before deciding whether and how much to lend are the purchase price of the property and the after repair value (ARV). The ARV is how much a property will be worth after repairs are finished.

Fix and flip loans come with many advantages that make them appealing to real estate investors. These loans provide quick financing with flexible terms and interest-only payments, which keeps the monthly payments low. As these loans are typically short term, there is no prepayment penalty.