Understanding LTC vs ARV
Lenders evaluate fix and flip deals based on Loan to Cost (LTC) and After Repair Value (ARV). Typically, funding covers up to 90% of purchase and 100% of rehab, capped by a percentage of the final value.
Experience Requirements
Your track record matters. Investors with 3+ completed flips in the last 24 months often secure more aggressive leverage and lower interest rates compared to first-time flippers.
Fix & Flip Loan Guide
Navigating the capital requirements for fix and flip projects requires a clear understanding of leverage, renovation draws, and exit strategies. This guide provides the practical framework for investors to prepare their scenarios for successful review.
Renovation Draw Process
Rehab funds are held in escrow and released via draws. Investors must complete portions of the scope of work before requesting an inspection and subsequent reimbursement for completed tasks.
The Exit Strategy
The primary exit is the sale of the property. Lenders want to see a clear absorption analysis or listing plan that supports the ARV within the typical 12-month loan term.