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Private Credit & Lending

Gap Funding for Fix-and-Flip Investors (2nd-Lien Bridge)

Provide the down-payment + rehab gap to fix-and-flip investors — 12–18% + 2–4 points on 4–6 month bridge.

Overview

Fix-and-flip investors typically get 80–90% purchase + rehab from a hard money lender but need 10–20% 'skin in the game.' Gap funders provide that 10–20% as second-lien (or unsecured promissory note) at 12–18% interest + 2–4 points, for 4–6 months. If deal loses money, gap lender is subordinate to HML — real risk. Best deals: experienced flippers with track record on properties in strong markets with 25%+ ARV margin. Small ticket ($10–50K) but 30–50% annualized IRR.

Best fit
Investors with $50K–$500K to deployReal estate operators building networkSelf-directed IRA holders
Estimated impact
30–50% IRR on short-duration deals

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