What is fix and flip?

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You buy a distressed home under market value. You hire a professional and licensed contractor to complete the work on your home. By building equity you are able to refinance out of the Fix & flip loan or sell the home to recapture costs.

You need to know what your after reno value will be. In general the purchase price plus the reno budget should be no more then 70-75% of the ARV. 

25% of the purchase price, 10% down for seasoned investors.  Reno funded 100% in an escrow

Reno must be funded by yourself. You need to have significant capital to pay your contractor at least 1/3 of the budget. As the work is completed you request a "draw" from the escrow account to pay yourself back. Rinse and repeat.

12 month term, interest only payment. Only pay of the purchase loan amount + any amount drawn from escrow.

Example:

Identified a home for sale  that is distressed. 3 bed, 1 bath. Homes in the area are selling for $170,000. Purchase house for $50,000. Reno Budget $45,000. All in cost $95,000. Cash out refi 75% of homes new value ($170,000 * .75 = $127,500) Payoff Fix and Flip loan $127,500 - $95,000 = $32,500 in profit or funds to reinvest.