What Are Fix to Rent Loans?

You many have heard the term fix to rent loan and thought: How is that different from a fix and flip loan?

The answer is: The loan itself is not different. Both fix to rent loans and fix and flip loans are short term (6-12 Month) interest only loans with a portion allocated to rehab/construction.

What is different, is the exit strategy for the project. In a fix to rent scenario, you’re buying the property in a distressed condition, fixing it up to increase the value and market rent, and then refinancing with a DSCR loan so that you can hold it long term as a cash flowing asset.

The reason that fix to rent loans and fix and flip loans are not usually distinguished by lenders is that the investment analysis is the same.

In a fix and flip loan scenario, lenders such as Ridge Street check that the project will be profitable whether the property is sold or refinanced at project completion. So, even if you’re pursuing a fix & flip strategy, the rent & refinance exit strategy should be a viable option. This check during the underwriting phase of the loan, ensures that the real estate investor will be able to hold the real estate asset as a cash flowing property if they decide not to sell.

If you have a fix to rent loan scenario, use our BRRRR Calculator to check if you will be able to recover your full investment upon refinancing at project completion.

How to Get a Fix to Rent Loan?

At Ridge Street Capital, we offer competitive fix to rent loan terms tailored to your investment needs. Our loans cover up to 90% of the purchase price and 100% of the rehab costs, with interest-only payments during the rehab period.

The Origination Process

‍The process of obtaining a fix to rent loan typically involves 4 steps:

1. Application: Submit your loan application along with details about the property and your investment plan. (Get Pre-Approved)
2. Approval: We’ll review your application and approve the loan based on the property's potential after repair value.
3. Funding: At closing you’ll receive an initial advance and then the rehab funds will be disbursed to you as the work is completed.
4. Refinance: Once the property is renovated and rented out, we’ll help you refinance using a DSCR loan. If there is enough equity in the property you will be able to cash out and recover your original investment.

Other Frequently Asked Questions

Where Do Fix and Rent Loans Work Best?

The best markets for fix and rent loans—often used in the BRRRR strategy—typically have a strong rent-to-property value ratio, steady tenant demand, and investor-friendly regulations. Affordable housing markets with room for appreciation tend to offer the best cash flow potential. However, the truth is that fix and rent loans can work in even the most competitive, high-ticket markets. In these areas, investors often rely on short-term rental income or long-term appreciation rather than immediate cash flow to make their deals profitable.

Here are some of the top states where fix and rent strategies can work well:

• Tennessee – Nashville’s popular tourism and long term rental markets Tennessee a prime market for fix and rent investors. In Nashville, short-term rentals can generate strong cash flow, but strict local regulations require careful planning. Memphis, on the other hand, offers some of the best price-to-rent ratios in the country, making it attractive for long-term rentals.  Tennessee Fix and Rent Loans can be a flexible financing option to acquire and renovate properties quickly.
• South Carolina – Charleston and Greenville offer growing job markets and rising rental demand. Charleston’s historic charm and tourism make it a strong short-term rental market, though certain neighborhoods have strict Airbnb restrictions. Meanwhile, Greenville has become a hotspot for long-term rental investors due to its influx of new residents and tech jobs. Many investors secure hard money loans in South Carolina to finance value-add rental properties in these areas.
• Ohio – Cleveland, Columbus, and Cincinnati provide some of the most affordable real estate markets in the U.S., with strong rent-to-value ratios. Cleveland, in particular, is a top pick for BRRRR investors, thanks to its low acquisition costs and consistent rental demand. Ohio Fix and Rent Loans are a top choice for national investors who invest in Ohio markets.
• Maryland – Baltimore remains one of the best cities on the East Coast for fix and rent investors due to its affordability and high rental yields. However, property taxes and landlord regulations can be hurdles that investors need to factor in when running their numbers. Those leveraging hard money loans in Maryland often focus on distressed properties in up-and-coming neighborhoods, where renovation can significantly boost rental income.
• Indiana – Indianapolis is known for its investor-friendly environment, with affordable properties, a strong rental market, and no statewide rent control laws. The city's steady population growth and low vacancy rates make it a great choice for fix and rent strategies. Many investors turn to hard money lenders in Indiana to fund quick property acquisitions before transitioning to long-term financing.
• Upstate New York – While New York City is challenging for cash-flow-focused investors, cities like Buffalo, Rochester, and Albany offer much lower property prices with strong rental demand. Buffalo, in particular, has seen increased interest due to its affordability and revitalization efforts. Investors often use fix and rent loans in New York State to renovate and stabilize properties before refinancing into long-term DSCR loans.

Can I Get Pre-Approved for a DSCR Loan When I Get a Fix To Rent Loan?

Yes, when you a get a Fix To Rent Loan you can also request a Term Sheet for the expected DSCR loan when your project is completed.

Can I Get a Fix To Rent Loan for an Airbnb Property?

Absolutely! Read more about DSCR loans for Airbnb's.

Ready To Get Started

If you’re interested in getting a fix to rent loan for your next property, Ridge Street is one of the top lenders for real estate investors in the US. From husband and wife teams doing their first project, to established funds turning out dozens of projects per year, we’re the lender for real estate entrepreneurs.

Get A Term Sheet | Get Pre-Approved Online

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