This rehab lender loans money to real estate investors whose exit strategy is to "Fix and Flip" the property. The lender will loan funds generally based on the ARV (after repair value) of the property, the amount of the loan determined by the lenders LTV (loan to value) condition, again generally 55% to 70% of value. This type of loan is generally similar to the short term lender for a period of 3 to 6 months, sometimes with extensions and sometimes as long as 1 year, with interest-only or no-payments during the loan period, while the property is being rehabbed and marketed for sale. The advantage of the rehab lender is that often, the lender will also loan funds needed for repair. The lender will require documentation regarding the contractor making the repair and proceeds will generally be placed in escrow and distributed to contractor and subcontractors who will release any interest in the property upon payment in full.

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