Fix & Flip Bridge Loans: The Fast-Track Funding Playbook

📅 Published: February 16, 2026

A fix-and-flip bridge loan is short-term financing — typically 6 to 18 months — that covers both acquisition and renovation of an investment property. Unlike conventional mortgages, bridge loans fund based on the property’s After-Repair Value (ARV), not its current condition. This means you can purchase a distressed property, draw renovation funds in stages, and repay the loan from sale proceeds — all without tying up your own capital in a property that no traditional lender would touch. For South Florida investors working in a market where distressed inventory moves fast and renovation timelines are tight, bridge loans are the execution tool that turns deal analysis into closed transactions.

How Fix-and-Flip Bridge Loans Work

The structure is straightforward. A bridge lender provides two components:

1. Acquisition funding: Typically 80-90% of the purchase price

2. Renovation funding: Typically 100% of the rehab budget, disbursed in draws

You buy the property, complete renovations in phases, request draw inspections as work is completed, and sell the finished product. The loan — plus interest and fees — is repaid from sale proceeds at closing.

Typical Terms

The interest rate looks expensive compared to a 30-year mortgage. But you’re not holding this loan for 30 years. You’re holding it for 4-8 months. The total cost of capital on a well-executed flip is a line item in your profit calculation — not a lifestyle expense.

The ARV Formula: Where Every Flip Begins

Before you talk to a lender, you need to calculate your After-Repair Value. This is the number that determines how much a bridge lender will fund — and whether your flip makes financial sense at all.

ARV = Comparable Sale Prices of Renovated Properties in the Same Area

This isn’t a formula you compute — it’s a data exercise. Pull 3-5 recently sold properties within a half-mile radius that match your target property’s post-renovation condition, square footage, bed/bath count, and lot size. The median sale price of those comps is your ARV.

The 70% Rule

Most experienced flippers use the 70% Rule as a quick viability screen:

Maximum Purchase Price = (ARV × 0.70) – Renovation Costs

This ensures you have a 30% margin to cover financing costs, holding costs, selling costs, and profit.

Deal Math: A South Florida Flip Example

You find a 3/2 single-family home in Deerfield Beach listed at $310,000. It needs a full kitchen and bath renovation, new roof, and hurricane impact windows.

Step 1: Determine ARV

Comparable renovated homes in the area are selling for $475,000-$510,000. Conservative ARV estimate: $485,000.

Step 2: Estimate Renovation Costs

Step 3: Apply the 70% Rule

Maximum Purchase Price = ($485,000 × 0.70) – $134,200 = $205,300

At a $310,000 list price, this deal does not pass the 70% Rule. You’d need to negotiate the purchase price down to roughly $205,000 — or confirm that your ARV is actually higher based on stronger comps.

Step 4: Calculate Rehab ROI

If you do acquire at $205,000 and sell at $485,000:

Gross Profit = ARV – Purchase Price – Rehab Costs

$485,000 – $205,000 – $134,200 = $145,800

Now subtract your carrying and exit costs:

Net Profit = $145,800 – $69,656 = $76,144

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ROI on Cash Invested = $76,144 ÷ $61,000 (down payment + closing costs) = 124.8%

That’s the math that matters. Not the interest rate in isolation — the return on your deployed capital.

South Florida Renovation Market: What You Need to Know

Insurance: The Cost Nobody Budgets Correctly

Builders risk insurance in South Florida runs $3,000-$6,000 for a six-month renovation policy, depending on the property value and scope of work. Standard homeowner’s insurance won’t cover a vacant property under renovation. If you don’t have a builders risk policy and a pipe bursts during demo, you’re absorbing the loss.

Post-renovation, the property needs a new insurance policy for the listing period. In Broward and Palm Beach counties, expect $4,000-$8,000 annually for a renovated single-family home — higher if it’s in a flood zone. This cost hits your holding expense calculation directly.

Permitting Timelines Are Not Optional

South Florida municipalities are notoriously variable on permit processing. Boca Raton, Fort Lauderdale, and unincorporated Broward County each have different timelines and inspection requirements. A roof replacement permit in Deerfield Beach might take 2 weeks to pull; the same permit in Boca Raton might take 4 weeks.

Budget 2-4 weeks for permitting before any major structural work begins. This dead time is still costing you interest on the bridge loan. Smart flippers submit permit applications the day they close — sometimes earlier, with seller cooperation.

Contractor Availability

South Florida’s construction labor market remains tight. Good general contractors are booked 4-8 weeks out. Specialized trades — roofers, impact window installers, electricians — even longer. Line up your contractor before you close the acquisition, not after. A bridge loan charges interest from day one. Every week you spend finding a contractor is a week of carrying costs with zero renovation progress.

The Draw Process: How Renovation Funds Are Released

Bridge lenders don’t hand you the full rehab budget at closing. Funds are released in draws — typically 2-4 stages — tied to completed work:

1. Draw 1: After demolition and rough-in work (30-40% of budget)

2. Draw 2: After major installations — kitchen, baths, roof (30-40%)

3. Draw 3: Final finishes, landscaping, punch list (remaining 20-30%)

Each draw requires a site inspection by the lender’s third-party inspector. The inspector verifies that the work matches your original scope and budget. Once approved, funds are wired — typically within 3-5 business days.

What Slows Down Draws

• Scope changes without lender approval. If you decide mid-project to add a bathroom that wasn’t in the original budget, the lender needs to re-underwrite the draw schedule.
• Poor documentation. Keep before/during/after photos of every phase. Inspectors verify against your original scope.
• Unpermitted work. If an inspector sees work that should have been permitted but wasn’t, the draw stops.

Momentum-Killers in Fix-and-Flip Execution

The Conventional Lending Trap

Some investors try to finance flips through HELOCs, personal savings, or conventional bank loans. The problem: banks don’t lend on distressed properties. They require the property to be habitable and insurable at current condition. A house that needs a new roof and has active water damage doesn’t qualify. You spend three weeks trying to get bank financing, lose the deal, and start over.

A bridge lender doesn’t care about current condition — they care about ARV. That’s the fundamental difference.

Undercapitalized Rehab Budgets

The second momentum-killer is running out of renovation funds midway through a project. This happens when investors underestimate South Florida-specific costs: impact windows ($15,000-$25,000 for a full house), code-compliant roofing ($25,000-$40,000), and post-Surfside structural requirements for older properties.

A 10% contingency is the minimum. In South Florida, 15% is safer.

Extended Timelines

Every month your renovation extends beyond the original plan costs you $2,000-$4,000 in interest, insurance, and utilities. A project that was supposed to take 5 months but takes 9 months doesn’t just cost you 4 extra months of carrying — it costs you the opportunity to deploy that capital into the next deal.

Protect your timeline like you protect your budget. They’re equally important to your return.

When to Use a Bridge Loan vs. Cash

If you have the cash to buy and renovate outright, should you still use a bridge loan?

Often, yes. Here’s why: a bridge loan lets you keep your capital liquid for multiple deals. If you have $300,000 in cash and use it all on one flip, you’re locked into that single project for 6-8 months. If you use a bridge loan and deploy only $60,000-$80,000 of your own capital per deal, you can run 3-4 flips simultaneously.

The interest expense is the cost of velocity. For investors scaling a flipping operation, that cost is almost always worth it.

Next Steps

If you have a property under contract — or under consideration — and need acquisition and renovation financing, bring us the numbers. Purchase price, ARV estimate, rehab budget, and timeline. We’ll structure a bridge loan that funds the deal and gets you to the exit.

Ready to run the numbers on your next flip? Schedule a 15-minute deal review — we’ll tell you if the deal works and how fast we can close.

About the Author

Brandon Brown is the founder of Anchor Commercial Capital, a leading provider of structured capital solutions for transitional and value-add commercial properties. Based in Boca Raton, Florida, Brandon is a seasoned investor and technologist specializing in the intersection of commercial lending and data-driven deal execution. His professional background includes founding Rapid Surplus Refund and co-founding Lien Capital, experiences that inform his pragmatic approach to complex deal structures and lien-intensive acquisitions. Brandon is dedicated to providing sponsors with the clarity and execution certainty required in today’s volatile markets. Connect with Brandon on LinkedIn to discuss your next commercial deal.