Why Brokers Should Recommend Fix and Flips to First-Time Investors

If you're a mortgage broker, private lender, or referral partner who serves new real estate investors, you've likely had clients ask: Where do I begin? New investors are often unsure whether to flip a house, keep it for rental cash flow, or pursue multifamily deals. As an advisor, helping them get started with a good foundation can put them—and your business—on the path to long-term success.

Perhaps the most strategic entry points to real estate investing are in fix and flip opportunities. Such deals provide clean execution, solid potential for return, and rich experience that can be used as a foundation for subsequent deals by the investor. Facilitating financing on fix and flips for your clients not only positions you as a smart advisor but also puts you in a position to be repeated as the business expands.

Let's explore why fix-and-flips are a good suggestion to first-time investors—and how wholesale lenders and brokers can benefit from taking them through it.

Fix and Flips Are Simple in Concept

In comparison to long-term rental strategies or commercial real estate investments, fix and flip projects are straightforward to comprehend. Your customers are buying undervalued houses, doing strategic improvements, and reselling them for a profit. Success does involve planning and due diligence, but these transactions don't require the same level of sophistication as large commercial developments or intricate financing arrangements.

For private lenders, referral partners, and mortgage brokers, this is a chance to teach new investors about hard money loans, bridge loans, and short-term capital solutions. These financing alternatives enable investors to quickly buy properties, efficiently rehab them, and sell out strong with a good return, while keeping their capital in motion for upcoming deals.

As an originator, having the ability to pair investors with the appropriate loan structure and lender not only makes them successful but also creates long-term relationships that can translate into repeat business and referrals.

A Strong Learning Experience for New Investors

Perhaps the largest barrier to entry for first-time investors is mastering the basics of real estate. By suggesting fix and flips, brokers can expose customers to hands-on experience with property appraisal, market analysis, budgeting for renovations, and project management—all of which are skills critical to future success as an investor.

For wholesale lenders and mortgage professionals, this learning process also provides them with a way to build a closer relationship with the customers. Through offering advice on financing options, underwriting requirements, and risk management techniques, brokers can be positioned as an expert advisor instead of being merely a transactional lender.

Attractive Returns and Market Opportunities

Fix-and-flips present strong return potential, and they are a popular strategy for newly entering investors seeking to accumulate capital in a short period of time. ATTOM's 2025 Home Flipping Report indicates that the typical gross profit on a home flip in the United States is approximately $66,000, with return on investment (ROI) ranging 30%–40% depending on the market.

To brokers, these returns ensure that investors will reinvest their earnings into future transactions, providing repeat lending opportunities. Getting clients to begin with a flip enables them to accumulate capital and experience, with the result being additional transactions—and additional commissions for brokers and lenders in the long term.

How Brokers and Wholesale Lenders Can Benefit

Transitioning clients into fix and flip investing benefits brokers and wholesale lending partners in multiple ways:

1. Increased Deal Volume – Fix and flip investors move quickly, creating more frequent lending opportunities compared to traditional buy-and-hold strategies.
2. Higher Loan Amounts – Renovation costs often require additional financing, leading to larger loan amounts and higher commissions for brokers.
3. Stronger Client Retention – Investors who successfully complete a flip are more likely to return for additional funding, creating repeat business for mortgage professionals.
4. Diverse Funding Solutions – By offering hard money loans, short-term bridge loans, and fix and flip financing, brokers can cater to a broader range of investors and expand their market presence.
5. Referral Business – Satisfied investors will refer new clients, helping brokers grow their business organically.

Identifying the Right Fix and Flip Opportunities

Not all fix and flip investments are created equal. As an intermediary, brokers can add value by helping investors identify viable deals. Key factors to consider include:

• Market Trends: Is the area experiencing appreciation, job growth, and demand for renovated homes?
• Property Condition: Does the home require cosmetic updates or major structural repairs?
• Profit Margins: Is there enough spread between purchase price, renovation costs, and resale value?
• Exit Strategy: Can the investor sell quickly, or will market conditions affect liquidity?

By guiding clients toward well-researched deals, brokers can help reduce risk and improve investor outcomes, leading to stronger relationships and future business.

Funding Fix and Flips: The Broker’s Role

Financing is always the most important element of any fix and flip transaction, and brokers are an important part of ensuring that clients secure the correct funds. Fix and flips very infrequently involve the use of conventional bank financing through strict underwriting and slow approval periods. Hard money lending, private lending, and asset-based loans are used to provide quick closings instead.

By branding yourself as a fix-and-flip financing specialist as a broker or referral partner, you can differentiate yourself from others in your field. Familiarity with the details of loan programs—LTV ratios, interest rates, and repayment terms—enables you to offer customized solutions tailored to the individual investor's specific needs.

Why Partnering with RCN Capital Makes Sense

If you’re looking to connect your clients with reliable financing for fix and flip investments, RCN Capital is your ideal lending partner. We specialize in short-term fix and flip loans, offering:

• Competitive Rates & Flexible Terms – Designed to maximize investor returns.
• Fast Approvals & Quick Closings – Helping investors move quickly on profitable deals.
• Nationwide Lending Coverage – Supporting brokers across diverse real estate markets.
• Dedicated Broker Support – Working directly with mortgage professionals to streamline loan origination.

By partnering with RCN Capital, brokers can offer clients the financing they need while earning commissions on closed deals. Whether you’re working with a first-time investor or an experienced house flipper, our loan programs provide the capital needed to succeed. Connect with us today to discuss our real estate loan solutions and how we can help you succeed in the fix and flip market.