Selling a fix and flip loan is mostly a documentation exercise. The loan either has the support a buyer needs to price it, or it does not. Lenders who sell regularly build the file from the day they close. This article walks through what a whole-loan buyer looks for and how to prepare a fix and flip loan so the bid you accept holds through diligence and purchase.
Start with what the buyer is actually buying
A whole-loan buyer is buying payments secured by a property, plus the risk that the business plan behind it fails. On a fix and flip loan, that plan is the whole story. The borrower is buying a property in one condition and betting it will be worth more after renovation. So the buyer wants to understand three things: what the property is worth today, what it should be worth after the work, and whether the borrower and the budget can get it there.
The bid is priced on your tape or the data you register in the CorrFirst seller portal. Once you accept, diligence checks the file against that data, and everything in the file should answer one of those three questions. A file that answers all three clears diligence quickly. A file that leaves one open draws conditions, questions or a kick-out.
The core documents
You deliver the loan file after you accept a bid, but have it ready before you ask for one. Most buyers ask for a similar core package:
- Executed loan documents: note, deed of trust or mortgage, guaranty, loan agreement, and any construction or rehab rider.
- Closing documents: the settlement statement, title policy or commitment, and evidence of insurance with the lender named correctly.
- Valuation: the appraisal with both as-is and after-repair values where the loan relied on both.
- Borrower file: the application, credit, entity documents, experience track record and any background checks you ran.
- Rehab package: the scope of work, the line-item budget and the draw schedule.
- Payment and servicing history: the payment ledger, any modifications or extensions, and the current servicer.
Your tape, or your seller portal registration, should tie to these documents line by line. The bid is priced on that data, so a mismatch that surfaces in diligence is one of the most common reasons a trade slows down.
Valuation support is where most questions start
The appraisal carries more weight on a fix and flip loan than on almost any other product, because the after-repair value is a forecast. Buyers look at whether the comparables support a renovated property of the kind the scope describes, whether the as-is value is reasonable for the purchase price, and whether the appraiser was independent of the lender and borrower.
At CorrFirst, appraisals need to come through an appraisal management company using a local appraiser, and every unit needs to be inspected. A file built that way avoids a whole category of diligence questions before they start.
The rehab budget and draw history
If the loan is partially drawn, the buyer is stepping into a project that is already underway. That makes the draw history as important as the original budget. Send the budget, the draw schedule, every draw request you funded, the inspection reports behind each draw, and the remaining holdback balance. A buyer wants to see that money went out in step with work completed, not ahead of it.
CorrFirst buys partially drawn rehab loans. After purchase, CorrFirst funds the remaining draws: the borrower or the seller requests a draw, we order a third-party inspection, and once it is reviewed and approved we release the draw to the borrower.
Property types that sell cleanly
Fix and flip and bridge loans on 1-4 family properties are the most common, but the category is wider. CorrFirst also buys these loans on multifamily properties up to 25 units and mixed-use properties up to 10 units. If your book includes larger or more specialized collateral, say so up front.
Common gaps that slow a trade down
- An appraisal with an after-repair value but no support for the renovation assumptions.
- A budget that does not match the scope of work in the appraisal.
- Draws funded without an inspection report on file.
- Insurance that lapsed, or that names the wrong loss payee.
- Subordinate financing on the property. Buyers generally will not purchase a loan with a junior lien behind it, and CorrFirst does not.
Most of these can be fixed before you sell. Find them yourself rather than have diligence find them.
What to expect when you sell
- Submit. Upload a loan tape, or register your loans in the CorrFirst seller portal.
- Get a bid. We send a price on each loan or the pool within 24 hours.
- Accept and deliver. If you accept, you deliver the loan file.
- Diligence. Our AI underwriting reviews the entire file, including the valuation, the rehab budget and feasibility, and every loan condition, and our underwriters clear it.
- Purchase. Once diligence is cleared, we buy the loan when the collateral documents are received and cleared.
- Servicing transfer. Servicing moves after purchase.
There is no minimum: you can sell one loan or the whole book, servicing-released or retained. Our bid holds through the commitment period unless diligence finds a material defect, which is why the file you deliver matters so much. A complete, consistent file is what keeps the bid from changing between acceptance and purchase.
If you are not yet approved as a seller, approval runs alongside submission, the bid and acceptance, so it does not hold up the trade.
A simple way to prepare
Pull one loan you would like to sell and walk it through the questions above. Can you show today's value, the after-repair value and the path between them? Does every draw have an inspection behind it? Does the tape match the documents? Then you are ready.
When you have a loan or a tape ready, send us your tape or register the loan in the CorrFirst seller portal, and we will come back with a bid.
