Fix and flip projects can be incredibly profitable—when everything goes right. But what many investors underestimate isn’t the renovation or the sale… it’s the financing.

The wrong loan structure, poor timing, or even a missed conversation with your lender can eat away at your margins before you ever get to closing day. At Infinity Commercial Capital, we’ve seen too many investors lose out on five-figure profits because of preventable funding mistakes.

Here’s a breakdown of the most common pitfalls—and how to avoid them.

1. Using the Wrong Type of Loan for the Deal

Not all fix and flip loans are created equal. Some investors try to use traditional mortgages or generic lines of credit, which aren’t designed for short-term, high-speed real estate deals.

The fix: Use purpose-built fix and flip financing, bridge loans, or hard money—these are structured for short holds, fast closings, and renovation-heavy projects. They come with higher rates, but they prioritize speed and flexibility over paperwork and red tape.

2. Borrowing Without a Clear Exit Strategy

A good lender will ask: How do you plan to repay this loan? A lot of investors gloss over this, assuming they’ll sell the property quickly or refinance without understanding the market conditions that could delay both.

The fix: Know your numbers and have at least two exit strategies—usually a flip sale and a refinance-to-rent plan. Having a backup could save you from panic-selling at a loss.

3. Underestimating Carrying Costs and Loan Terms

Monthly interest, insurance, taxes, and draw fees add up—fast. Many investors only calculate the loan amount they need for purchase and rehab, forgetting to pad the budget for the cost of time.

The fix: Ask your lender for a full breakdown of carrying costs. At Infinity, we help clients model out best-case and worst-case timelines to make sure they aren’t blindsided.

4. Waiting Too Long to Secure Financing

This one’s critical. Some investors wait until they’ve found a deal or even gotten into escrow before lining up financing. That delay can kill deals—or force you into unfavorable terms.

The fix: Get pre-approved or pre-qualified before you shop. A lender who understands fix and flip financing can give you a ballpark structure early so you’re ready to move fast.

5. Not Understanding the Draw Process

Renovation loans often release funds in “draws” after work is completed and inspected. If you’re relying on those funds to pay contractors upfront, you’re going to hit serious delays—or worse, burn relationships with your GC.

The fix: Work with a lender who offers flexible draw schedules or funding that accounts for front-loaded labor and material costs. Transparency on timelines and requirements is key.

Final Thought: Funding Is Part of Your Profit Strategy

Investors often obsess over ARVs, comps, and contractor bids—but overlook the cost of money. The truth is, your financing choices can make or break the deal just as easily as a bad contractor or a missed inspection.

At Infinity Commercial Capital, we work with investors to make sure their loan is aligned with their deal—not just their credit score. If you’re planning your next flip and want a lender who thinks like an investor, let’s talk.