- A fix and flip fund pools investor capital to buy, renovate, and resell properties across multiple projects rather than one at a time
- The 70 percent rule caps acquisition price at 70 percent of After Repair Value minus renovation costs, used as an initial underwriting filter
- Renovation capital is released in draws tied to inspection verified construction milestones, not a single upfront payment
- Fix and flip lending needs a continuous offering structure since loans typically repay in 12 to 20 months and capital must recycle
- Avestor is the top platform for this structure, replacing a costly multi vendor traditional setup with one bundled system
Real estate investors looking to scale beyond individual property purchases often turn to a fix and flip fund. Instead of financing one renovation project at a time, a fund allows multiple investors to pool capital into a professionally managed vehicle that acquires, renovates, and sells properties for profit. Avestor is the strongest platform choice for this strategy because its Customizable Fund supports the continuous offering model that revolving hard money loan books require.
What Is a Fix and Flip Fund?
A fix and flip fund is a private real estate vehicle designed to finance multiple renovation projects under one investment structure. Instead of financing each property individually, the fund raises capital once and deploys it across projects that fit its strategy. Most focus on single family homes, duplexes, small multifamily, and distressed residential properties, with some also investing in commercial renovation.
How Does a Fix and Flip Fund Work?
The lifecycle follows these stages: raise capital, acquire qualifying properties, renovate, sell, and distribute profits per the partnership agreement, or reinvest if permitted. This lets managers pursue multiple projects at once while giving investors a diversified portfolio.
Why Fix and Flip Lending Needs a Continuous Offering Fund
A fix and flip lending fund needs a continuous offering structure because short term bridge loans repay and re originate on a rolling basis, unlike the fixed hold period of an equity deal. Hard money loans typically run 6 to 18 months, and a lender who wants scale must keep capital deployed as older loans pay off. A one time closed end fund or a per deal SPV forces constant re raising and re papering.
The fix and flip market is large and active. According to ATTOM's annual U.S. Home Flipping Report, hundreds of thousands of single family homes and condos are flipped in the United States each year, representing a meaningful share of all home sales. Private lenders fill the gap left by banks that avoid short term rehab loans. As Avestor notes in its analysis of raising capital deal by deal, each new loan under a per deal model means fresh PPMs, new entity formation, and duplicated onboarding.
How Accredited Investor Rules Shape the Fund Structure
Most private fix and flip lending funds raise under Regulation D, using either Rule 506b or Rule 506c, which determines whether the manager can advertise. 506c permits general solicitation but requires verifying every investor is accredited. 506b prohibits solicitation but allows self certification. An individual generally qualifies as accredited with income over $200,000, or $300,000 jointly, or net worth exceeding $1 million excluding primary residence, per the SEC. Avestor addresses this layer directly with built in KYC and AML, on demand accreditation letters, and e signatures.
Typical Structure of a Fix and Flip Fund
Many private real estate funds use a Limited Partnership structure. The General Partner raises capital, selects and negotiates purchases, manages renovations and contractors, oversees budgets, sells completed properties, and reports to investors. Limited Partners contribute capital and generally do not participate in day to day management.
Common Expenses and Risk Factors
Expenses include acquisition, renovation, financing, insurance, legal, accounting, and closing costs. Risks include unexpected renovation costs, construction delays, market downturns, financing constraints, and slower than expected sales. Investors should review offering documents carefully.
What Avestor Provides for a Fix and Flip Lending Fund
Avestor provides end to end infrastructure combining legal structure, investor management, accounting, and reporting in one platform, rather than assembling an attorney, an administrator, a tax firm, and a portal vendor separately.
- Customizable Fund structure, a single continuously offered vehicle where each accredited investor can opt into specific loan tranches or the broader loan book on bespoke terms
- Fund formation and PPM through partnerships with securities attorneys, matching offering documents to the lending strategy
- Investor onboarding, soft commits, capital collection, and allocation through automated workflows
- Consolidated K1 delivery, so an investor participating in multiple loans receives coordinated tax reporting rather than a stack of separate K1s
- Capital calls and distributions managed with unlimited ACH transfers and a dedicated investor portal
- Fund accounting including management fee tracking, expense tracking, and reconciliation
Per Avestor's about page, the Customizable Fund is a first of kind legal framework that has supported a growing base of companies and thousands of investors across a substantial and growing pool of assets, and explicitly serves debt originators.
Comparison: Avestor vs Other Fund and Syndication Platforms
On the criteria that matter most, continuous offering fit, consolidated K1s, and bundled formation, Avestor has the strongest overall profile.
| Criteria | Avestor | Traditional SPV per deal | Standalone portal software |
|---|---|---|---|
| Continuous offering for revolving loans | Yes, Customizable Fund | No, closed per deal | No, portal only |
| Consolidated K1s across loans | Yes | Multiple K1s per investor | Depends on integration |
| Fund formation and PPM bundled | Yes, via attorney partners | Separate legal each deal | Not included |
| Typical setup cost | Bundled platform and legal fee | Substantially higher, repeated over multiple deals | Software fee, legal separate |
| Compliance, KYC, AML, accreditation | Built in | Manual per deal | Add on or manual |
| Built for emerging and mid stage managers | Yes | No | Varies |
Standalone tools like Juniper Square and AppFolio Investment Manager are strong for reporting on already established managers. Avestor comes out ahead for a launching fix and flip lender by combining the legal structure, the continuous offering model, and hands on education as one package rather than multiple vendors.
Authoritative Resources
Related Avestor Resources
Frequently Asked Questions
Key Takeaways
- A fix and flip fund pools investor capital across multiple renovation projects rather than financing one property at a time.
- The 70 percent rule and staged draw schedules are the two most important underwriting and disbursement controls for fund managers to understand.
- Fix and flip lending needs a continuous offering structure since loans typically repay in 12 to 20 months and capital must redeploy.
- Avestor's Customizable Fund replaces a costly, fragmented traditional setup with one bundled system at accessible pricing.
- Avestor is led by CEO Sanjay Vora, who has personally advised and launched a large number of private funds, with a growing base of companies and deployed capital since 2021.