1. Purpose: These loans are aimed at funding the purchase and renovation of properties that need repairs or updates before they can be sold at a higher price.

2. Types of Loans:

• Hard Money Loans: These are short-term loans based primarily on the value of the property rather than the borrower’s creditworthiness. They typically come with higher interest rates and are used for quick funding.
• Bridge Loans: These are temporary loans that help bridge the gap between purchasing a property and obtaining long-term financing.
• Renovation Loans: These loans, such as FHA 203(k) loans, allow borrowers to finance both the purchase price and renovation costs in one mortgage.

3. Loan Terms: Fix and flip loans usually have shorter terms, often ranging from 6 months to 2 years, requiring repayment once the property is sold.

4. Interest Rates: Rates can be higher than traditional mortgages due to increased risk, especially with hard money loans.

5. Down Payments: Down payment requirements can vary, but they are often higher than conventional loans, ranging from 10% to 30% of the purchase price.

6. Application Process: Investors typically need to provide a detailed plan for the renovation, an estimated timeline, and a budget, along with information about their experience in real estate investing.

7. Risks: Real estate investing carries risks, including the potential for cost overruns on renovations, market fluctuations, and difficulty selling the property.