Fix-and-flip lenders aren't underwriting you the way a bank would. They're underwriting the deal. If the numbers work and the plan is credible, the rest is negotiable. Here's what they're really looking at.
The after-repair value
Everything starts with the ARV — what the property is worth once the work is done. Lenders lend against it, so they'll scrutinize your comps. Bring recent, genuinely comparable sales, not the three highest prices in the zip code. A defensible ARV is the single strongest thing you can walk in with.
The renovation budget
A budget that's too thin reads as inexperience; one that's padded reads as risk. Lenders want to see a line-item scope that matches the ARV you're claiming. If you're projecting a premium sale price, the budget has to show the finishes that justify it.
Your skin in the game
Most private lenders fund a percentage of cost and expect you to cover the rest. The more of your own capital is in the deal, the more aligned you are with the lender — and the better the terms tend to be.
The exit
Flip lenders are short-term by design. They want to know exactly how they get paid back and when:
- Sale on the open market, with a realistic days-on-market estimate
- Refinance into a rental at a supportable debt-service ratio
- A backup plan if the primary exit slips
A credible exit is worth more than a great rate. Lenders price risk, and a clear payoff is what lowers it.
When we package a flip for our network, we make sure these four numbers tell one consistent story. That's what turns a maybe into a term sheet. Get in touch and we'll pressure-test your deal.