Fix and Flip Construction Loans in Ohio 2025 Now

Ultimate Guide to Fix and Flip Construction Loans in Ohio for 1-4 Unit Rentals (2025)

Ohio’s real estate market is primed for investors seeking to renovate and rent out single-family homes, duplexes, triplexes, and fourplexes. As investment capital flows into cities like Columbus, Cleveland, and Cincinnati, demand for fix & flip and construction loans continues to rise. In this 2025 guide, discover how to secure fast, flexible financing for 1-4 unit rental properties, the best lenders serving Ohio, step-by-step processes, and real-world success stories.

Ohio Investment Property Market 2025: Trends & Hot Areas

• Columbus – Olde Towne East, Franklinton, Hilltop: Revitalization and steady rental demand make these neighborhoods attractive for rehabs and new builds.
• Cleveland – Detroit-Shoreway, Ohio City, Collinwood: Substantial value-add opportunities with rising prices and a strong rental base.
• Cincinnati – Walnut Hills, Northside, Price Hill: Affordable entry points for investors with robust cash flow potential.
• Toledo – Westmoreland, Old West End: Historic districts with distressed property supply ideal for fix and flip or long-term rental projects.
• Akron – Highland Square, Firestone Park: Gentrifying neighborhoods attracting young professionals and families.
• Dayton & Suburbs – Historic South Park, Belmont: Solid rental yields backed by employment recovery in the region.
• Youngstown – Cornersburg, Boardman: Low acquisition costs, ideal for value-add rental strategies with strong ROI.

Types of Loans for 1-4 Unit Properties in Ohio

Ohio investors can access several financing options for acquiring, renovating, or building 1-4 unit rentals:

• Fix and Flip Loans: Short-term loans for experienced and new investors to purchase and rehab houses.
• Construction Loans: For ground-up construction of single-family, duplex, triplex, or fourplex units.
• Rehab Loans: Specialized for properties needing significant repairs—includes 100% of renovation budgets.
• Hard Money Loans: Asset-based lending for fast, flexible funding, especially on distressed or value-add deals.
• DSCR Rental Loans: Long-term financing based on rental income, ideal for refinancing post-renovation or holding as rentals.

Top Ohio Lenders for Fix and Flip & Construction Loans (2025)

1. Lima One Capital
   Offers fix & flip, construction, and DSCR rental loans statewide. Fast closings, up to 90% LTC, 12-24 month terms. Offices in Columbus and Cleveland.
2. Kiavi (formerly LendingHome)
   Online platform providing bridge loans and long-term rental loans. Serves all major Ohio metros, quick approvals, competitive pricing.
3. Do Hard Money
   Focuses on fix & flip loans for distressed properties in Ohio. Offers up to 100% of rehab costs, special programs for new investors.
4. Patch of Land
   Marketplace lender with construction loan and fix & flip products for 1-4 unit properties. Serves Cleveland, Cincinnati, and Dayton markets.
5. Intrust Funding Ohio
   Ohio-based hard money lender specializing in quick-close bridge and rehab loans. Local expertise, 6–18 month terms.
6. RCN Capital
   National lender active in Ohio, competitive rates on fix & flip and DSCR rental loans, supports single-family and 2-4 unit projects.

Key Loan Terms and Requirements (2025)

Note: Leverage and rates may vary by borrower experience, property condition, and lender.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Page 1 of 5

Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

Page 3 of 5

What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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Step-By-Step Application Process for Fix and Flip Construction Loans

1. Pre-Qualification: Submit basic information (credit score, experience, project overview) for a soft credit pull and eligibility check.
2. Deal Analysis: Lender reviews property value, scope of work, exit strategy, and ARV (After Repair Value). Submit purchase contract and contractor bids.
3. Application Submission: Complete lender’s secure online or PDF application. Provide financials, LLC docs, and any necessary rental pro forma.
4. Appraisal & Underwriting: Third-party appraisal or BPO conducted. Lender evaluates borrower, market, and project feasibility.
5. Conditional Approval: Receive loan terms—LTV, rates, fees, timeline—and approval subject to final underwriting.
6. Closing & Funding: Sign documents at a title company. Lender wires funds for purchase (and initial rehab/construction draws if applicable).
7. Construction/Rehab & Draws: Funds disbursed via draws as renovations progress. Submit inspection reports/draw requests.
8. Project Completion & Exit: Sell (flip), refinance to a DSCR rental loan, or retain as a rental property.

Success Stories: Ohio Fix & Flip and Construction Loan Scenarios (2025)

• Columbus Duplex Flip – $245,000 Loan (Lima One Capital): Investor acquired a distressed duplex in Franklinton for $130K, invested $80K in rehab, leveraged a 12-month fix & flip loan at 10.2%. Sold for $312K, netting a strong profit after expenses and repaying the lender in full within 8 months.
• Cleveland Triplex Ground-Up – $415,000 Construction Loan (RCN Capital): Developer used a new construction loan to build a triplex in Ohio City. 75% LTC, 12% interest-only, draw schedule tied to construction milestones. Fully leased post-completion and refinanced to a DSCR rental loan at 8% for 30 years.
• Dayton Single-Family Rehab – $110,000 Hard Money Loan (Intrust Funding Ohio): First-time flipper bought a 3-bed home in Belmont for $65K. $45K in renovations, funded via hard money, 13% interest, 2 points. Completed in 5 months, rented for $1,350/month, refinanced to a long-term fixed DSCR loan at 7.9%.
• Akron Fourplex Value-Add – $315,000 Fix & Flip (Do Hard Money): Experienced investor tackled a fourplex in Highland Square. 85% acquisition, 100% renovation financed. Exit: refinanced at new appraised value, cash-out proceeds reinvested into another property.

Ohio-Specific Considerations for 1-4 Unit Investment Loans

• Local Codes & Permits: Be aware of Cincinnati, Cleveland, and Columbus local rehab/construction requirements—especially for multifamily.
• Tenant-Friendly Laws: Ohio laws generally favor landlords, but urban areas may have additional requirements for rental registration.
• Property Management: Growing demand for 1-4 unit rentals makes reliable property managers highly valuable.
• Insurance: Make sure lender’s policy requirements are clear—especially during construction and vacancy periods.

Frequently Asked Questions

What’s the minimum down payment for Ohio fix & flip/construction loans?

Typically 10-20% of purchase price or project cost; some lenders finance 100% of rehab with 10-15% down on acquisition.

How quick is funding?

Experienced investors can close in 7-14 days; new borrowers allow 2-3 weeks for underwriting and appraisal.

Can I use these loans for Airbnb/short-term rentals?

Many lenders allow this within legal and zoning constraints—always disclose your intended use.

Are there prepayment penalties?

Fix & flip and construction loans typically do not have prepayment penalties. Some DSCR rental loans may have 3-year declining penalties.

Conclusion: Take Action on Ohio’s 2025 Investment Opportunity

Ohio’s mix of affordable inventory, favorable landlord laws, and strong rental demand make it a top state for 1-4 unit fix and flip, renovation, and ground-up construction investments. By partnering with experienced, Ohio-friendly lenders and keeping your projects moving efficiently, you can unlock equity, build a cash-flowing portfolio, and capitalize on 2025’s dynamic market.

Ready to start your next project? Reach out to Ohio’s top lenders, analyze your next investment area, and take the first step toward profitable rental property construction or renovation today.

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✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

Page 2 of 5

Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

Page 3 of 5

Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

Page 4 of 5

For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

Page 5 of 5

What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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What's the most appealing aspect of a DSCR loan for your investment property financing needs?

A) No personal income verification (no W-2s or tax returns needed!)B) Approval based on the property's cash flow (DSCR)C) Faster closing times compared to traditional mortgagesD) Flexibility for self-employed investors and complex financial situations

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