Fix & Flip Financing: What Investors Need to Know

Fix & flip investing rewards speed, accuracy, and capital efficiency. The right loan structure can be the difference between a profitable exit and a project that drags into a second carry season, eating margin every month it sits.

Most fix & flip loans cover up to 90% of purchase and 100% of rehab, with 12–18 month terms and interest-only payments. Lenders underwrite to the after-repair value (ARV) — typically capping total leverage at 70–75% ARV. That ARV cap is the single most important number on the term sheet: it dictates how much cash you'll actually need to bring to close.

Rehab funds are not disbursed at closing. They're held in escrow and released in draws as work is completed and inspected. Investors who don't plan for that cash flow gap — paying contractors up front, then waiting 5–10 days for a draw reimbursement — get squeezed even on profitable deals. Line up a working-capital buffer equal to at least one full draw cycle before you break ground.

What separates seasoned operators is the ability to stack capital sources: a primary fix & flip loan for acquisition and rehab, gap funding to cover the down payment, and a clean exit plan (sale or DSCR refinance) lined up before close. The stack should be underwritten as a system, not one loan at a time.

Underwriting speed matters more than headline rate. A lender quoting 10.5% who can close in 10 days is worth more than one at 9.75% who takes 30 — because the deals worth doing don't sit on the market. Build relationships with two or three lenders before you need them, so your pre-approval is already on file when a distressed listing hits.

At UpStallion, we structure fix & flip stacks that minimize cash-in-deal so investors can run multiple projects in parallel rather than stacking equity into a single property. Capital efficiency, not leverage for its own sake, is what turns one good flip a year into a repeatable business.