I am currently looking at several properties to flip that have varying remodel requirements. A couple of the properties with the most potential are not eligible for a conventional loan because the properties are not "move-in ready". These homes will require a new kitchen, HVAC system, and finishes.

I'm assuming on these properties I will be required to get a construction loan. I have the following questions:

How are construction loans structured? If I buy a house at $50k and estimate the repairs to be around $30k would my loan be for $80k? I'm assuming I would still have to put down 20% or more?

Is there a time restraint on when I have to get all of the repairs completed by?

Do I have to involve the bank in collecting bids and selecting subcontractors for scopes of work? Would it be an issue if I was self-performing a majority of the work myself?

What are the pros and cons of using a construction loan for a flip?

What other options do I have to finance the project? Could I offer $80k for the home with $30k in repair escrow? Or is this essentially the same thing as a construction loan?

With a conventional loan I was planning on financing the purchase and using cash to finance the improvements. The construction loan seems somewhat advantageous because it requires less cash investment and maximizes the ROI and leverage.

Any input is much appreciated.

Thank you😊