Fix and Flip Construction Loans in Maryland Now 1-4

Fix and Flip Construction Loans in Maryland: Complete 2025 Guide for 1-4 Unit Rentals

Investing in Maryland’s residential real estate remains an intelligent strategy for both seasoned and first-time investors in 2025. With shifting interest rates, rising demand for quality rental units, and growing neighborhoods from Baltimore to the Washington suburbs, the opportunity to acquire, renovate, or construct single-family homes, duplexes, triplexes, or fourplexes has never been stronger. The right financing—whether via fix and flip loans, construction loans, or hybrid options—makes all the difference between a profitable rental portfolio and missed opportunities.

Maryland Fix & Flip and Construction Loans: 2025 Market Overview

Maryland real estate is benefiting from technology sector expansion, federal employment stability, and increased renter demand near major economic centers. Construction loans and fix and flip financing are especially attractive for residential investors targeting value-add opportunities in desirable neighborhoods. In 2025, loan terms have become more flexible, with numerous lenders offering tailored products for 1-4 unit rental properties—catering specifically to the unique needs of small-scale investors.

• Loan Amounts Available: $75,000 – $2 million+, with most 1-4 unit properties financed in the $150,000 to $500,000 range.
• Eligible Property Types: Single-family, duplex, triplex, and fourplex (1-4 units). Most lenders exclude large multifamily, commercial, or owner-occupied homes.
• Loan-to-Value (LTV): Up to 90% of purchase, 100% of rehab costs in some cases (max 75-80% ARV).
• Interest Rates (2025): 7.75% to 12%, depending on experience, credit, and deal structure.
• Terms: 12 to 24 months (fix and flip); up to 30 years if refinanced into a DSCR rental loan.
• Speed: Pre-approvals in 1-3 days, closes in as little as 10-15 days.

Top Maryland Neighborhoods for Fix & Flip and Construction Investment (2025)

1. Baltimore – Remington & Hampden: Up-and-coming areas with strong rental yields in renovated row homes and duplexes.
2. Silver Spring: Proximity to DC makes this suburban enclave a high-demand rental market for updated single-family and multifamily units.
3. College Park: Home to the University of Maryland, strong student and faculty rental demand for triplexes and fourplexes.
4. Frederick – Downtown Corridor: Historic homes, growing employment centers, high appetite for rental housing following renovation.
5. Laurel: A mid-point between DC and Baltimore, with investors targeting duplex conversions and fourplex rehabs.
6. Rockville – Twinbrook: Gentrification and Metro accessibility, plus popularity with young professionals.
7. Hyattsville: Walkable, artsy neighborhoods attracting renters and strong BRRRR (Buy-Rehab-Rent-Refinance-Repeat) returns.

Popular Fix & Flip, Construction, and Hybrid Lenders in Maryland (2025)

• Lima One Capital – National lender with strong Maryland presence, known for quick closes on flips and new construction loans for 1-4 unit investors.
• RCN Capital – Flexible fix & flip and rental property loans up to $2M, including rehab funds. Fast funding and streamlined application.
• Patch Lending – Emphasizes investor-friendly draws and construction to perm products, ideal for ground-up fourplex projects and full-gut rehabs.
• Kathy Flip Funding (Local Baltimore) – Specializes in mid-sized flips in Baltimore and Montgomery counties. Fast soft-pull pre-qualifications.
• PMI Maryland – Known for 1-4 unit hard money loans with competitive fees and personalized consulting.
• Kiavi – Technology-driven national lender with attractive rates for experienced Maryland investors and repeat borrowers.

Step-by-Step: How to Secure a Construction or Fix & Flip Loan in Maryland

1. Prepare Your Investment Plan
   • Identify your target property (single-family, duplex, triplex, or fourplex) and run comps to estimate ARV (After Repair Value).
   • Itemize your scope of work and obtain contractor bids.
2. Choose the Right Lender/Product
   • Evaluate fix & flip, hard money, or construction loan options.
   • Decide if you’ll keep the property as a rental (plan for DSCR refinance) or sell after rehab.
3. Initial Application & Pre-Approval
   • Submit a basic application online or through a loan officer.
   • Provide a credit check, experience summary, and deal details.
   • Receive loan scenarios and initial terms in 24-72 hours.
4. Underwriting & Document Submission
   • Send in purchase contract, project budget, proof of funds for down payment, and entity docs.
   • Property appraisal/inspection is ordered for ARV validation.
5. Final Approval & Closing
   • Work with lender and title company to finalize terms.
   • Sign closing docs; lender funds purchase and sets up rehab/construction draw escrow.
6. Draw Management During Renovation
   • Request rehab draws as work is completed; typically 3-6 draw stages for major rehabs.
   • Lender inspects and releases funds directly to your contractor or your entity.
7. Project Completion & Exit Strategy
   • Upon completion, sell the property (paying off the bridge/flip lender), or refinance into a 30-year DSCR rental loan.

2025 Success Stories: Maryland Fix & Flip & New Construction Loans

Case Study 1: Fourplex Rehab in Hampden, Baltimore

Investor: Lisa R.
Loan Type: Fix & Flip
Loan Amount: $437,000 (85% purchase, 100% rehab)
Lender: RCN Capital
Project: Renovated a distressed fourplex, converting two units to 2BRs for higher rents. Exit was a DSCR loan with 7.25% rate.

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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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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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.

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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.

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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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• Timeline: Closed loan in 14 days. Rehab completed in 5 months. All units leased in month 6.
• Result: Property appraised at $625,000 ARV, cash-out refinance netted $85,000 in tax-free cash at closing.

Case Study 2: New Construction Duplex in Silver Spring

Investor: Darnell & Partners
Loan Type: Ground-Up Construction
Loan Amount: $528,000
Lender: Patch Lending
Project: Built a modern 2-unit townhouse facing the DC border. 75% LTC (Loan-to-Cost), 12-month term, interest-only.

• Timeline: Permits and vertical build completed in 7 months, stabilized in month 10.
• Result: Rented both units at a combined $4,000/mo. Refi into DSCR loan at 75% LTV, long-term 30-year fixed.

Case Study 3: BRRRR Duplex in College Park

Investor: Samuel G.
Loan Type: Hard Money Bridge to DSCR
Loan Amount: $179,000 at 11% (acquisition and $41K rehab)
Lender: Kiavi
Project: Duplex conversion of single-family, targeting student tenants. 6-month flip, then refi.

• Timeline: Closed purchase in 11 days. Rehab and rental in 105 days.
• Result: Refi into 7.5% DSCR loan, monthly cash flow of $670, 20% equity capture at close.

Maryland 2025 Financing Trends & Tips

• Hybrid bridge-to-rent and “construction to perm” programs are more popular, letting you keep rentals long-term.
• DSCR loans (Debt Service Coverage Ratio) now qualify at 1.0x-1.2x ratios, even with higher rates, giving value-add investors exit path certainty.
• Lenders prefer experienced investors but first-timers with strong teams can often qualify with mid-600s FICO and 10-20% down.
• Rehab budgets must be detailed—especially for 3-4 unit properties. Misestimated scopes can cause funding delays.
• Baltimore, Prince George’s, and Montgomery counties often require extra diligence with permitting and contractor licensing—choose local professionals.

FAQ: Fix & Flip and Construction Lending in Maryland (2025)

What’s the minimum credit score required for Maryland fix and flip loans?

Most lenders require a credit score of 660+, though hard money lenders may allow as low as 620 with experience and strong equity.

Can I use these loans for a property I plan to keep as a rental?

Yes! Many investors use fix & flip or construction loans to stabilize a property, then transition to a DSCR (Debt Service Coverage Ratio) rental loan for permanent financing.

How fast can I close a fix & flip or construction loan in Maryland?

Pre-approvals often arrive in 1-2 days. Closings can occur in as little as 10-15 business days, provided documents and appraisals are timely.

Are 4-unit properties eligible?

Yes. All the featured lenders actively finance single-family homes, duplexes, triplexes, and fourplexes across Maryland.

Conclusion: Maryland Remains a Top Market for 1-4 Unit Fix & Flip & Construction Financing

✅ 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.

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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.

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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%

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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.

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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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Whether you’re taking on your first Baltimore rowhome rehab or building new fourplexes in the DC suburbs, Maryland’s financing ecosystem in 2025 is ready to help you succeed. Leverage the range of fix and flip, construction, hard money, and DSCR loan options to maximize returns and build a sustainable rental portfolio across the state’s diverse neighborhoods. Act now—the combination of strong rental demand, stable property values, and lender competition won’t last forever.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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