Question 1

Does California make me disclose the rehab when I sell the flip?

Accepted Answer

Yes, if you resell a 1-4 unit property within 18 months of taking title. Civil Code section 1102.6h, added by AB 968, applies to a seller of a single-family property of one to four units who accepts an offer within 18 months of taking title. That seller must disclose any room additions, structural modifications, other alterations or repairs done by contractors, along with the contractor names and contact information, and may attach the permits. It applies to offers accepted on or after July 1, 2024, which means it applies to essentially every California flip we finance. The practical read: keep a clean file from day one. Licensed contractors, signed contracts, pulled permits and a running scope log are not just good practice here, they are the document set you hand the buyer. Unpermitted work you cannot explain becomes a price negotiation at best. Have your California real estate attorney review your disclosure package before you list.

Question 2

How does California tax a flip gain?

Accepted Answer

As ordinary income, at the highest state rates in the country. California runs nine brackets topping out at 12.3%, plus the 1% mental health services tax on taxable income above $1,000,000, for a 13.3% top marginal rate. There is no lower state capital gains rate, so a flip gain is taxed the same as wage income to California regardless of how it is characterized federally. If you hold title in an LLC there are two more lines. Every LLC doing business in California owes the $800 annual tax under Revenue and Taxation Code sections 17941 and 23153(d), and section 17942 adds a gross receipts fee on total California income: $900 from $250,000 to under $500,000, $2,500 from $500,000 to under $1,000,000, $6,000 from $1,000,000 to under $5,000,000, and $11,790 at $5,000,000 or more. Total income is gross income plus cost of goods sold, so for a flipper it keys off sale prices, not profit. One $1M sale through an LLC triggers the $6,000 tier plus the $800. Price that into the deal and talk to your California CPA.

Question 3

What does the transfer tax cost me on a California flip exit?

Accepted Answer

The state base is small. The city on top of it is the story. Revenue and Taxation Code section 11911 lets counties impose a documentary transfer tax of 55 cents per $500 of consideration, which is $1.10 per $1,000, and general-law cities may take half with a credit so the combined base stays there. On a $600,000 sale that is $660 (600 x 1.10 = 660). Charter cities stack their own rate on top. The City of Los Angeles adds $4.50 per $1,000 to the $1.10 county rate for a $5.60 per $1,000 combined base, and Measure ULA sits above that at 4% of the entire price over the lower threshold and 5.5% over the upper one, thresholds inflation-adjusted each year. San Francisco runs a tiered tax reaching 5.5% and 6% at the top brackets. Rates in other cities vary and we do not publish a table we have not verified, so confirm the city rate before you underwrite the exit. Market detail sits on the metro pages: Los Angeles fix and flip and San Francisco.

Question 4

Will insurance be a problem on a California flip?

Accepted Answer

Get the quote before you go hard, especially in a wildfire zone. The California FAIR Plan has grown to roughly 573,739 policies in force as of March 2025, up 23% from September 2024 and 74% from September 2023, with residential exposure passing $600B by mid-2025. It matters to a flipper for one reason: the FAIR Plan writes basic named-peril dwelling fire coverage only, meaning fire, lightning, internal explosion and smoke, so a property placed there still needs a companion policy for liability and other perils. Meanwhile the Sustainable Insurance Strategy lets carriers use forward-looking wildfire catastrophe models in rate filings in exchange for writing at least 85% of their statewide market share in wildfire-distressed ZIP codes. Availability is improving slowly and premiums are repricing upward. On a 6-month hold that is a carry line, not a footnote. Bring a real quote for the specific address to underwriting.

Question 5

Can you fund a California trustee sale purchase?

Accepted Answer

Yes, and the statute gives you a readable calendar. California forecloses non-judicially under Civil Code section 2924. A notice of default is recorded first, and not less than three months must pass before the notice of sale can be given. The notice of sale is then published once a week for three consecutive weeks with first publication at least 20 days before the sale, posted on the property at least 20 days before, and recorded at least 20 days before. So from recorded default to sale the floor is roughly 111 to 120 days, and the postings tell you what is coming well ahead of the date. We issue a term sheet the same day and most fix and flip files fund in 5 to 7 days once title and insurance come together. Watch the recorder, not the auction calendar, and apply when the notice of default posts. Subject to underwriting.

Question 6

What credit score do I need for a California fix and flip loan?

Accepted Answer

There is no minimum score on this program. We do run credit, but on an asset-based loan it carries far less weight than it would at a bank. The file turns on the property, the rehab budget and the after repair value. Weaker credit is usually answered with lower leverage rather than a decline, and there is no hard credit pull to start. California basis is high enough that the buy and the budget decide the deal long before the score does. Subject to underwriting.

Question 7

How much cash do I need to bring to a California flip?

Accepted Answer

Roughly 10% of the purchase, plus closing costs and a contingency. We fund up to 90% of the purchase price and up to 100% of the rehab budget, capped to ARV. On a $600,000 purchase that is up to $540,000 from us and $60,000 from you (600,000 x 90% = 540,000), with rehab drawn against the schedule rather than paid up front. On top of your 10%, budget escrow and title, the city and county transfer tax on the exit, and a property tax bill reassessed at your purchase price. Subject to underwriting.

Question 8

What is the smallest and largest California flip you can fund?

Accepted Answer

$100,000 is the floor and $5,000,000 is the ceiling. Below $100,000 the fixed cost of a closing eats the deal for both of us. In practice the floor almost never binds on the coast and does come up in the interior, which is one reason a Bakersfield fix and flip and a Westside Los Angeles deal are underwritten so differently. The term is 6 months, interest-only, which has to cover rehab, listing and a price reduction. Subject to underwriting.

Question 9

Can I get a California fix and flip loan on my first deal?

Accepted Answer

Yes. First-time flippers are welcome on this program. The file is underwritten on the property, the budget and the exit, so a thin track record is not a decline by itself. Expect it to show up in leverage rather than in a yes or no, and expect harder questions about your contractor and your ARV support. In California those questions have a second life, because section 1102.6h makes you name your contractors to the buyer if you resell within 18 months. Hire people you would be comfortable disclosing. Subject to underwriting.

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