Fix-and-Flip and Hard Money Loans in Detroit (2026 Guide)

A fix-and-flip loan (usually from a hard money lender) is short-term, interest-only financing that covers most of a house's purchase and renovation, sized off both your total cost and the home's after-repair value (ARV), and paid back when you sell. In Detroit, the structure works the same as anywhere else, but low purchase prices create two problems national guides skip: many lenders won't write a loan under $100,000, and every month you hold the house eats a bigger share of a smaller profit.

This guide explains how these loans are structured, what they cost in 2026, why Detroit price points complicate them, and the alternatives. Then it reruns a real Detroit flip, our Stansbury case study, with hypothetical hard money costs so you can see the difference financing makes. To run your own deal, use our fix-and-flip calculator.

Not financial advice. Great Lakes PMG is a licensed real estate brokerage, not a lender. We don't make loans, broker loans, or quote rates. We help investors underwrite deals, get lender-ready, and put a financing plan together. Loan terms below come from published sources as of October 2026 and change often, so confirm everything with the lender.

How are fix-and-flip loans structured?

Hard money lenders lend mainly against the property and the project, not your income. Five numbers define almost every loan.

Loan-to-cost (LTC). The share of your total project cost (purchase plus rehab) the lender will fund. A 90% LTC loan on an $87,000 project lends about $78,300, and you bring the rest.

After-repair value (ARV) cap. A ceiling on the loan as a percentage of what the house should be worth when it's done. The lender funds the lower of the LTC amount and the ARV cap. This is the lender's protection if the rehab budget is optimistic.

Draws. The lender usually funds the purchase at closing and holds the rehab money back. You (or your contractor) complete a phase, an inspector confirms it, and the lender releases that portion. You front the cost of each phase until the draw clears, so you need working cash even on a high-leverage loan.

Points. An upfront fee, where one point equals 1% of the loan amount, paid at closing.

Interest-only payments and a short term. You pay interest monthly and the whole balance at the end, usually from the sale. Terms run 6 to 24 months. If you can't sell or refinance before the term ends, you're negotiating an extension, which usually costs another fee.

What do hard money loans cost in 2026?

These are published ranges, not quotes. Your terms depend on experience, credit, the deal, and the lender.

Add appraisal, draw inspection, underwriting, and document fees on top. Ask every lender for a full fee sheet, not just the rate and points.

Why do Detroit price points complicate fix-and-flip loans?

Loan minimums

Detroit flips are often small dollars. A $35,000 house with a $50,000 renovation is an $85,000 project. At 90% LTC, the loan is about $76,500, which is below a $100,000 minimum like the one Kiavi publishes. Many national lenders simply won't do the deal, no matter how good it is. You end up with smaller local lenders and private money, whose terms vary more.

Appraisals and ARV comps

The ARV cap depends on an appraiser agreeing with your after-repair value. In Detroit, that can be hard:

• Renovated sales can be sparse on a given block. If most nearby sales are distressed or cash investor purchases, the appraiser may have few true comps for a fully renovated house.
• Values swing block to block. A comp three streets away can be in a different market entirely.
• A low appraisal shrinks the loan. If the appraised ARV comes in $15,000 under your number, a 70% ARV cap cuts the loan by $10,500, and you bring that in cash.

Bring your own comps to the conversation, and choose a lender that uses appraisers who work Detroit regularly.

Fixed costs don't shrink with the price

Lender fees for appraisals, draw inspections, and documents don't shrink with the loan. They cost about the same on a $90,000 loan as on a $300,000 one, so they take a bigger share of a cheaper flip's profit.

How does hard money change a real Detroit flip?

Here is the Stansbury case study, a Detroit flip that one investor funded and we managed under a 50/50 profit split.

The case study reports the investor's half as $17,050, a 19.5% return on $87,237. Our flat 6% and 2% estimates above land slightly lower, at about $16,770, so treat the selling-cost percentages as approximations.

The same deal with hard money (hypothetical)

Now suppose a solo investor did the same deal with a hard money loan instead of cash and without a profit split. These terms are hypothetical, chosen from the middle of the published ranges above. They are not a quote, and as noted, a loan this size would fall under some lenders' minimums.

• Loan: 90% of the $87,237 total cost = $78,513. Down payment: $8,724.
• ARV check: 70% of $134,000 = $93,800, so the loan fits under the cap.
• Rate: 12% interest-only. Points: 2 ($1,570).
• Simplification: we charge interest on the full balance for the whole hold. Real draws start lower and ramp up, so real interest would be somewhat less. We also ignore other lender fees and extra holding costs, which would push costs up.

Two lessons come out of that table:

1. Leverage magnifies the return on your cash. The hard money investor puts in about $15,000 instead of $87,000. If everything goes to plan, the percentage return is much higher.
2. Time is the enemy. Every extra three months of this hypothetical loan costs about $2,355 in interest alone, before taxes, insurance, and utilities on a vacant house. Going from 6 to 12 months cuts the profit by about $4,700.

Now add a weaker sale. If the house sold for 10% less ($120,600) and took 12 months, the same math leaves about $10,223 of profit on roughly $19,700 of cash. Still positive, but a further price drop or a cost overrun would erase it. Leverage works in both directions.

Run your own version, with your rate, points, and timeline, in the fix-and-flip calculator.

How does holding time eat flip profits?

Every month a flip isn't sold, you pay for it. On a Detroit flip, those costs include:

• Loan interest, if you financed it
• Property taxes. Michigan uncaps a property's taxable value the year after a sale, per the City of Detroit Office of the Assessor, so a long hold can catch the higher bill. Our Detroit property tax guide explains how to estimate it.
• Vacant property insurance, which typically costs more than a standard policy
• Utilities and winterization, especially if the hold runs through a Michigan winter (see our winterizing guide)
• Security and lawn care on a vacant house

The biggest causes of a long hold are slow contractors, scope changes after the walls open, permit and inspection delays, and a listing that doesn't sell at the price you planned. A renovation team that controls its own schedule is the most direct way to shorten the first three. Before you hire anyone, read about who's allowed to do the work under Michigan's residential builder license rules.

What happens if the flip doesn't sell?

This is the risk that turns a flip loan into a problem. A hard money loan has to be paid off at the end of its term. If the house doesn't sell, the usual Plan B is to rent it and refinance into a long-term DSCR loan. That only works if three things line up.

1. The house has to be legally rentable. Detroit requires a Certificate of Compliance before you can collect rent, which means registering the property and passing a city inspection. See our rental registration guide. A flip renovated for resale usually passes easily, but build in the time.

2. The rent has to support the payment. Using Stansbury's numbers as a hypothetical, a 75% cash-out refinance on a $134,000 appraisal is a $100,500 loan. At a hypothetical 7.5% over 30 years, with illustrative taxes of $300 and insurance of $150 a month, the payment is about $1,153.

At $1,100 rent, the full cash-out refinance fails at lenders with a 1.0 floor. Borrowing only enough to pay off the hard money loan passes, but leaves your down payment and profit tied up in the house.

3. The loan has to clear the lender's minimum. That smaller $78,513 refinance is below the $100,000 minimum some DSCR lenders publish. Our DSCR loans in Detroit guide covers loan minimums and seasoning in detail.

If all three fail, you're left with extensions, a price cut, or a sale at a loss. That's why we run the rental numbers on every flip before buying it. Our post on whether to flip or rent in Detroit walks through that decision.

What are the alternatives to hard money in Detroit?

The last row is how Stansbury was done. The investor put in cash, didn't carry a loan or manage contractors, and received half of the profit. It isn't the right fit for everyone. Some investors would rather borrow and keep the whole profit, and the hard money table above shows why that can be attractive when the timeline holds.

Other flips in our case studies include Prairie, which sold for $95,000, and Marborough. For a broader read on the market, see is it a good time to flip houses in Detroit and the questions to ask before flipping a house in Detroit.

How Great Lakes PMG helps flippers get lender-ready

We're not a lender, and we don't arrange loans. What we do is produce the numbers a hard money lender underwrites, and make sure they hold up.

• Rehab budget and scope. Our in-house renovation team is led by Managing Member Clarence Archibald III, who has completed more than 250 rehabs. Budgets are line-itemed by the people who will do the work.
• ARV comps. As a licensed Michigan real estate brokerage working in Detroit since 2006, we pull sold comps for renovated homes on the blocks that actually match yours.
• Timeline. Because we control the crew, we can give a lender (and you) a realistic schedule for draws and completion.
• Plan B. In-house property management means we can tell you what the house will rent for and run it if the exit changes.

Start by running your own deal in the fix-and-flip calculator. If you'd like help pressure-testing the result, our investment consulting (a flat $2,500 per property) covers sourcing, acquisition guidance, and rehab strategy, and you can book a call to talk through a specific house.

Frequently asked questions

How much down payment do I need for a fix-and-flip loan?

With a lender funding 85% to 90% of total cost, you bring 10% to 15% of purchase plus rehab, plus points, fees, and cash to cover each renovation phase until the draw is released. Newer investors usually get less leverage than experienced ones.

What interest rate do hard money lenders charge in 2026?

Published ranges in September 2026 ran from 8% to 15%, with 9% to 12% most common, plus 1 to 5 points. Your rate depends on experience, credit, leverage, and the deal. Get a written term sheet with all fees.

Can I get a hard money loan for a cheap Detroit house?

Sometimes. Some national lenders have $100,000 minimum loans, which rules out many Detroit flips. Local lenders and private money are more flexible on size. Ask about the minimum loan amount before you apply.

What is the 70% rule in house flipping?

It's a rule of thumb that purchase plus rehab should not exceed about 70% of the after-repair value, leaving room for financing, holding, and selling costs and profit. Many hard money lenders cap loans at 70% to 75% of ARV for the same reason.

What happens if my flip doesn't sell before the hard money loan is due?

You can ask for an extension (usually for a fee), cut the price, or rent the house and refinance into a long-term DSCR loan. The refinance only works if the house can be legally rented, the rent covers the new payment, and the loan clears the lender's minimum.

Does Great Lakes PMG lend money for flips?

No. We're a licensed brokerage with in-house renovation and property management. We help investors underwrite flips, produce the rehab budget, ARV comps, and timeline lenders ask for, and put a financing plan together. We also manage flips for investors who fund them, with a 50/50 profit split.