Fix & Flip Financing: LTC, ARV, and What Lenders Actually Look At
Flip financing looks simple from the outside — borrow, renovate, sell. In practice, three ratios run your file, and understanding them before you write an offer is the difference between a smooth closing and a dead deal.
LTC — loan to cost
LTC measures the loan against your total project cost (purchase price + rehab budget). Strong programs reach 85–90% LTC for experienced flippers. Higher LTC means less cash in — and more scrutiny on the rest of the file.
ARV — after repair value
Lenders cap the loan against the finished value too, commonly at 70–75% of ARV. Your ARV is only as good as your comps: the lender's appraiser will use renovated sales nearby, not your best-case Zillow estimate. Bring conservative comps and you'll never be surprised.
The third leg: you
- Experience — completed flips in the last 3 years move you up pricing tiers; first-timers still get done, with a bit less leverage.
- Liquidity — lenders want to see the down payment, closing costs, several months of payments, and a rehab cushion in the bank after closing.
- Credit — many programs work down to the low-600s, with the best pricing at 700+.
How draws work
The rehab portion is held back and released in draws as work is completed and inspected. Budget your contractor payments around inspections, keep the scope tight, and finish cosmetic-heavy rehabs inside the 12-month term most loans carry (extensions exist, but they're not free).
We place flip loans from $100K to $10M — single-family, multifamily, even mixed-use — including structures at 90% LTC and 75% ARV for qualified borrowers. Bring the address, the scope, and your exit price; we'll pressure-test the numbers before you sign.
NEWLOANCO Commercial is a division of NEWLOANCO (NMLS #1369124). Jorge R. Regalado, CEO — NMLS #1243458. Content is educational only and is not a loan offer, quote, or commitment to lend. All loans are subject to lender approval. SBA loans are made by SBA-approved lenders; NEWLOANCO is not affiliated with the U.S. Small Business Administration or any government agency.