Fix and flip loans
Purchase plus renovation on 1 to 4 unit residential in Texas, funded off our own balance sheet. Up to 90% of the purchase price, 100% of the rehab budget, and draws released against completed work.
Who this is for
Investors buying 1 to 4 unit residential property at a discount, renovating it, and either selling it or refinancing it into long-term debt. First deal or hundredth: the difference shows up in leverage, not in whether you get a call back.
It also fits the deals nobody else will touch on time: a wholesaler’s assignment with eleven days left on the contract, an auction buy, a probate sale, a house with a failed FHA appraisal that no conventional lender can finance in its current condition.
How the numbers work
A typical structure on a $300,000 purchase with an $80,000 renovation and a $520,000 after-repair value: we advance 90% of the purchase, which is $270,000, and hold back 100% of the $80,000 budget, for $350,000 in total loan proceeds. That is 67% of ARV, comfortably inside the 75% ceiling. You bring $30,000 plus closing costs, fees and a contingency, and you carry interest only on the $270,000 until the first draw.
Notice what constrains the deal. It is almost never the purchase advance. It is the ARV test. If that same house were bought at $380,000 with the same budget and the same ARV, total proceeds at 90/100 would be $422,000, or 81% of ARV, which does not work. The fix is a lower purchase price, more borrower equity, or a different deal.
What we need from you
- The property address, contract or current ownership, and access for the appraiser
- A line item renovation budget by trade, bids are better than estimates
- Your ARV support: comps you used and why the finished product hits that number
- A schedule of projects you have completed in the last 36 months, with addresses
- Entity documents, or a same-week plan to form one
- Proof of liquidity for the down payment, costs and a real contingency
What slows a flip file down
In order of frequency: title problems nobody checked for before contract, a budget that does not match the scope the appraiser was told about, a borrower who sends documents in batches a week apart, and an ARV that the comps do not carry. None of those is a lender problem, and all four are avoidable with one honest conversation on day one.
Fix and flip, specifically
How is the loan amount calculated?
Three constraints, and the lowest one wins. First, a percentage of the purchase price, up to 90% for an experienced sponsor. Second, the rehab budget, up to 100%, held back and released by draw. Third, and this is the one that actually binds most deals, total loan proceeds cannot exceed roughly 75% of the after-repair value. A deal that is bought too high fails the third test no matter how good the first two look.
What do you need to see in the rehab budget?
A line item budget, not a lump sum. Scope by trade, with quantities and costs that a general contractor would recognize. If you have contractor bids, send them. Budgets that are obviously light for the scope get adjusted upward in underwriting, because an underfunded project is a default waiting to happen, and we would rather argue about it now than fund a draw you cannot finish.
How do draws work?
You request a draw against completed line items. An inspection confirms the work, usually a third party inspector, sometimes photo and video verification on smaller items. Most projects run three to six draws; more are available on larger budgets. You pay interest only on funds actually disbursed, so a sensible schedule saves real money.
Can I get funds for rehab at closing?
No. Rehab dollars are always a holdback, released as work is completed. That is not a policy we invented; it is what keeps a project funded to the finish line rather than funded to month three. Plan your working capital around the first draw, and size your contingency for it.
What ARV will you use?
The appraiser’s, supported by closed comparable sales in the immediate area, with the renovation scope specified. Your ARV opinion is a useful input and we want to hear it, but the value we lend against is the one an appraisal supports. Optimistic ARVs are the single most common reason a flip deal reprices between term sheet and closing.
What if I want to keep the property instead of selling it?
Good, that is often the better outcome. We refinance you into a 30 year DSCR rental loan qualified on the property’s rent rather than your income. Tell us at the start if that is even a possibility, because it changes how we want the project scoped.
Do you lend on properties bought at auction?
Yes, with planning. Auction timelines are unforgiving and the property is usually not accessible for inspection before the hammer. Talk to us before you bid so the file is set up and the valuation path is decided; a same-week close on an auction property is very doable when it is not a surprise.
Every deal gets a real answer
Tell us the property, the plan and the number you need. A credit officer reads it and tells you what it will support.
- Texas hard money. A term sheet from the people who fund the loan.
- Commercial, all 50 states. Quotes from the desks that cover your asset.
- Outside the box? A straight reason, and usually a name that does fund it.